Info-tech

RJio eyes new markets to fire its optical fibre dreams

Our Bureau Mumbai | Updated on September 06, 2019 Published on September 06, 2019

The company looks to focus on infrastructure to gain customers, analysts say

Reliance Jio’s new optical fibre broadband service is not the cheapest in the country, it but offers a slew of added services and hardware bundled with a connection.

RJio’s lowest tariff plan starts at Rs 699 a month. There are many local players such as ACT Fibre which offers broadband services at lower price points. Even state-owned BSNL offers plans that are cheaper.

OperatorRental/monthSpeedData
RjioRs 699100Mbps100 GB
Act FibreRs 749100 Mbps500 GB 
Tata SkyRs 99925 MbpsUnlimited
BSNLRs 69910 Mbps5GB/day
Tata TeleRs 123440 Mbps300 GB

 

However, there is no other operator that can match Reliance Jio’s coverage of 1,600 cities. Most of the other private players are focused on the top urban areas. Airtel, which is RJio’s top rival, offers fibre broadband in about 90 cities. BSNL’s national network primarily runs on copper wires, which has a lesser capacity compared to optical fibre cables.

“Unlike mobile services where RJio disrupted the market by dropping data tariffs, in the case of broadband services, RJio’s disruption is in creating infrastructure,” said a market analyst.

When it comes to adopting digitisation and online platforms, Indian users are among the top consumers globally. The growth in consumption of video and online content has been growing exponentially over the last two years.

However, when it comes to network quality, Indian consumers are behind global benchmarks. Until recently, mobile operators were adopting a piecemeal approach in establishing a high-speed broadband infrastructure.

The scenario changed in 2016 after RJio launched 4G services at price points that were drastically lower than the prevailing tariffs. Since then, data consumption has shot through the roof, with over 500 million users having access to data services. But when more Indians come online and start consuming data, then the existing wireless networks will not be enough to support that demand.

Optical fibre networks have the capability to carry more data than a wireless network because the latter’s capacity is dependent on the quantum of radio spectrum. Spectrum, being a finite resource, can only be useful for carrying applications that do not require large bandwidth. Mission-critical applications such as healthcare and education can proliferate only when there is a robust optical fibre broadband backbone.

The pricing game

Analysts said that the company could not have played the pricing game, given the pressure on its balancesheet. Recently, Mukesh Ambani, Chairman, Reliance Industries, announced his mission to cut down debt to zero in 18 months. “Given that RJio has already leaked money on its mobile services, it would not have been wise to play the pricing game in broadband,” said a former executive of a top telecom company.

Unlike in mobile services, where competition is high, the market for fixed broadband is very small. Therefore, RJio’s focus seems to be on growing the market, rather than fighting for the existing pie.

The other big disruption that could come about with RJio’s launch is the way consumers watch TV content. By offering bundled TV channels and OTT applications, RJio is hoping that viewers of DTH and cable TV will switch to broadband-based entertainment.

To drive this shift, RJio is bundling a host of services with the broadband connection. Every user gets a fixed line phone, which can be used to make free voice calls anywhere within the country. Also available for free are video-conferencing facilities on TV and gaming and security services. Tariff plans above ₹3,999 offer access to virtual reality experiences. High-end users also get to watch movies on the same day they are released in theatres.

As an introductory offer, RJio is giving away its 4K set-top box worth ₹6,400 and Jio Home Gateway worth ₹5,000 bundled with all tariff plans. It has also bundled three-month subscriptions of OTT platforms with each connection though it is not clear which applications will be made available.

Published on September 06, 2019
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