Reliance Jio to invest Rs 500 bn in fibre-to-home foray; launch by year-end

Reliance Jio, which is set to disrupt the fixed broadband as well as media and content delivery platform segments with the launch of fibre-to-home (FTH) services, will invest Rs 500 billion on last-mile connectivity of 50 million homes with fibre over the next two to three years, according to sources close to the company. 

A team of around 10,000 people was being put in place for the FTH roll-out, said sources, adding this would be one of the largest and fastest deployments of FTH broadband services anywhere in the world. 

Jio’s target is to ensure that customers use an average of 500 GB a month, nearly 200 times more data than they currently use on their mobile devices. The network will offer customers speeds up to 1 gigabit per second. The commercial launch of these services, though not officially announced, could happen by the end of this year. At present, India has 18 million fixed broadband homes and only 1.25 million are connected with fibre broadband, though it has over 180 million TV households. On the other hand, China has over 120 million homes connected with fibre broadband.

A Reliance Jio spokesperson declined to comment on the matter.

Reliance Industries Chairman Mukesh Ambani announced during the company’s annual general meeting earlier this month that Jio would offer services in over 1,100 cities in the country.  

Jio will woo consumers with new products as well as technology, offering them quadplay services — TV, data, voice and mobile — seamlessly working across the platforms, with a single bundled offer and just one bill. Because devices will be interconnected, a consumer can take his mobile call on his smartphone or vice versa. A TV can also be used to make multiple video conferences on Jio’s 4G network. By using a cloud-based app, a Jio Cloud customer will be able to instantly broadcast photos taken on his smartphone from far away to a TV set at home. Jio will also offer services that will ensure that a consumer holidaying can view CCTV footage of his home as well answer the doorbell through a smartphone.

A quadplay offering ensures more stickiness of the customer, better pricing and easy payment. For Jio, it will mean multifold increase in data usage.

Jio is also going beyond offering media and entertainment content for which it has tied up with content partners and broadcasters. It is also planning to offer a suite of educational content as well as connect institutions. And to do so, it has recently acquired a majority stake in edutech firm Embibe for $180 million. The aim is to connect over 1.9 million schools and 58,000 universities across the country with fibre. Sources say a similar strategy is being worked out to provide healthcare content as well as connectivity, and talks are on with hospitals.

Jio is deploying the new technology with gigabit passive optical network (GPON), an IP-based optical fibre that ensures high efficiency and bandwidth use by enabling a single optic fibre to serve multiple premises, thus reducing cost of delivery. It ensures high bandwidth and enables mass market fibre deployment.

While the price of the services has not been finalised, sources and analysts in the know say it could replicate the mobile model by initially offering services free for three to six months. Discussions are on as to whether customers who want TV services should be given an offer at a fixed price, irrespective of usage of data (in India, average daily usage of TV is three hours). IDFC Securities points out that an initial basic price of Rs 500 a month (for broadband) with additional top-ups for TV or video could be attractive as it is still lower than what is offered by MSOs, which range from Rs 500 to Rs 800.

WHAT JIO WILL OFFER

- New technology with an IP-based optical fibre network, which will ensure quicker mass deployment of fibre broadband

- Quadplay services — voice, data, video and mobile — in one bill

- Educational and health services, apart from media and entertainment

- Seamless communication through various devices. For example, you will be able use your smartphone to get CCTV footage of home, answer the doorbell, and even raise an alarm from far away

- TV control on voice command; TV as a video-conference platform