After acquiring controlling stakes in DEN Networks and Hathway Cable and Datacom earlier this month, Reliance Jio is reportedly trying to add to its 19% stake in GTPL Hathway, a prominent multi-systems operator (MSO) in the Gujarat market. (See RJio Snaps Up Broadband Assets in Spending Spree.)
Reliance Jio acquired a stake in the MSO when it recently bought 51.3% of Hathway Cable and Datacom, which already owned 37.3% of GTPL Hathway. If RJio can increase its stake, it could further strengthen its ambitious GigaFiber initiative to disrupt the home broadband segment.
GigaFiber was launched earlier this year, but RJio faced some resistance from local cable operators providing last-mile connectivity. Its takeover moves should help it to overcome that opposition. Through GigaFiber, its goal is to connect as many as 50 million homes across 1,100 cities in India.
GTPL has a major presence in the Indian broadband market, with about 7.6 million cable subscribers. It is active in more than 500 cities across 11 Indian states and claims partnerships with as many as 20,000 local cable operators. It is especially prominent in Gujarat and West Bengal, with market shares of 67% in the former and 24% in the latter. Last year, GTPL recorded revenues of 11.1 billion Indian rupees ($152 million) and had a net profit of INR614 million ($8.3 million). A takeover, then, would give RJio a substantial business and customer base for its own services.
RJio is trying to carry its success in the mobile market into India's broadband sector. Takeovers of companies such as GTPL should certainly help it to grow faster. Given the impact RJio has already had in the mobile market, they will also be a major source of concern to RJio's competitors.
— Gagandeep Kaur, contributing editor, special to Light Reading