RJio’s disruption of the broadband market is good news for consumers but raises some regulatory concerns

| Updated on August 14, 2019 Published on August 13, 2019

The move to start offering optical fibre-based broadband service is not just timely, but also extremely critical for the future of India’s digital dreams

Reliance Jio’s aggressive plans to roll out optical fibre-based broadband services could be a game-changer for the industry and consumers alike. Though the tariff plans are yet to be unveiled, the commitment to offer speeds of 100 Mbps for ₹700 per month is in itself disruptive in a market where users do not get more than 20-30 Mbps on average. Add to this freebies such as free fixed-line telephone, premium streaming video applications, video-conferencing facility, TV channels and a host of other entertainment content and it becomes a compelling proposition for the consumers. When it comes to adopting digitisation and online platforms, Indian users are among the top 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, India is well behind global benchmarks. Until recently, mobile operators adopted 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. But when one billion Indians get online and start consuming data, then the existing wireless networks will not be enough to support that demand. In this context, RJio’s move to start offering optical fibre-based broadband service is not just timely, but also extremely critical for the future of India’s digital dreams. Optical fibre networks have the capability to carry much more data than a wireless network, because the latter’s capacity is dependant on the quantum of radio spectrum. Mission-critical applications such as healthcare and education can proliferate only when there is a robust optical-fibre broadband backbone.

RJio’s move will clearly disrupt many sectors, especially the media and entertainment industry, just like it did in the telecom sector. Post RJio’s entry into telecom, there has been a massive consolidation, with most of the remaining players struggling to survive. This is where regulatory authorities should step in to ensure that RJio operates on a level-playing field with respect to other companies offering a similar type of service. For example, the recent tariff order by the TRAI bars DTH operators from offering annual pricing plans or packages where they can get all channels for a fixed fee. Users have to pick channels on a la carte basis or subscribe to bouquets. This has led to a spike in monthly payouts for most subscribers. Now, RJio is offering TV channels bundled with its broadband connection. The TRAI should make sure that the same rules apply because it should not matter whether the medium of accessing TV channels is via satellite or through the optical fibre. The regulator should also ensure that RJio honours rules related to Network Neutrality, wherein it does not misuse its position to throttle content that does not reside on its platform. The Competition Commission of India should also be watchful against the creation of a monopoly, as that could be detrimental to consumers in the long term.

Published on August 13, 2019
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