Can India's RJio Succeed in Broadband?
Having already overturned India's mobile market, India's Reliance Jio is now poised to attempt the same feat in the country's residential broadband market with the launch of its Jio Fiber service later this year. (See RJio Onslaught Makes Going Tough for Indian Telcos.)
The operator, whose disruptive pricing plans attracted about 100 million customers in just a few months, is planning to introduce the home broadband services in October around the time of Diwali, the Hindu festival of lights, according to media reports.
It will charge about 500 Indian rupees ($7.76) for 100 gigabytes of usage each month, reports say. That compares with the fee of INR999 ($15.50) charged by arch-rival Bharti Airtel Ltd. (Mumbai: BHARTIARTL) for a fiber Internet service providing 50 gigabytes per month. The RJio service is likely to support a connection speed of about 100 Mbit/s, which will probably fall to about 1 Mbit/s once a customer hits the data usage threshold.
While RJio's service prices are low, a customer would also need to buy a router for a one-off fee of about INR4,500 ($69.90).
RJio was initially conducting a pilot in the state of Maharashtra, but this appears to have been extended to other cities including Ahmedabad, Chennai, Surat and Jamnagar. It is likely to be taken into other cities in the so-called National Capital Region, such as Gurugram and Noida, before a commercial launch. The plan is to offer home broadband services in 100 cities by the end of this year, it is assumed.
As in the mobile market, RJio seems to think it can attract consumers in lower income brackets by offering broadband services at rock-bottom rates. What's more, while RJio faces a number of rivals in mobile, Airtel is the only serious competitor in the fiber-to-the-home market.
Right now, that market is small, comprising just 20 million broadband customers. But monthly average revenue per user is more than INR1,000 ($15.50), making it an important segment. What's surprising is that in spite of the publicity surrounding RJio's plans, Airtel has not made a serious effort to acquire more customers in this space.
All of that should make it easier for RJio to attract new customers to its broadband network. A range of other services and applications can then be marketed to this customer base.
Gagandeep Kaur, contributing editor, special to Light Reading