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RJio Set to Disrupt India's Wired Broadband Market

Gagandeep Kaur
9/6/2019
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Three years ago, Reliance Jio stormed into India's mobile market with a low-cost deal that drove some rivals out of business and forced others to merge. Now it is hoping to pull off a similar trick in the country's fixed-line broadband market with this week's launch of the long-awaited JioFiber service. (See BBWN Bites: Jio Begins Vast Fixed Play in India, Sky's Wimpy WiFi Guarantee.)

According to details revealed this week, JioFiber comes with high-definition television and set-top boxes at no charge to annual lifetime subscribers. For prices ranging from 699 Indian rupees ($9.7) to INR8,499 ($118.27) per month, it includes include local voice calling and high-speed Internet services that are much faster than India's average.

But RJio seems to have retreated from some of its earlier steps. When RJio launched 4G operations three years ago, it promised customers free services for the first six months. That fueled interest in the offer and explained a surge in customer numbers. With RJio, however, there are no freebies. The fiber plans also seem designed to lock customers into a long-term engagement.

This change in strategy might have something to do with changing consumption patterns. At the time of the 4G launch, RJio was focused on ensuring customers could experience high-speed broadband for the first time. Now that Indian consumers are more familiar with broadband, and appreciate what it can do, they may be less resistant to paying for a broadband service.

Nevertheless, fixed-line broadband is an under-penetrated market in the country. RJio's entry could expand it and ultimately benefit other broadband players. According to recent data released by the Telecom Regulatory Authority of India (TRAI), India had just 18.4 million fixed-line broadband subscribers at the end of June. With 9.05 million users, the state-backed Bharat Sanchar Nigam Limited (BSNL) was the market leader, followed by Atria Convergence with 1.45 million, Hathway Cable and Datacom with 0.84 million and MTNL with 0.74 million customers.

What's more, there is potential for consolidation. India has more than 300 broadband providers, and most of them are small or local operators. RJio's entry is likely to spur merger activity, much as it did in mobile. In that sector, its aggressive tactics were largely responsible for Bharti Airtel's takeovers of Videocon, Tata Teleservices and Tikona, as well as the merger between Vodafone and Idea Cellular that gave rise to India's largest mobile operator.


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Light Reading.


As in mobile, Bharti Airtel is RJio's main competitor in broadband. Earlier this week, it launched a digital entertainment services platform called Airtel Xstream, allowing users to access digital content on a screen of their choice. These moves are likely to intensify the rivalry between the two players.

Besides Airtel, satellite providers including Tata Sky and Dish TV -- and possibly even Indian cinemas -- face competition from JioFiber due to its inclusion of fiber TV services with its broadband offer. In the coming year, JioFiber subscribers will be able to view movies on the same day they are released in cinemas.

For now, RJio is teaming up with TV and film producers to provide content to its customers. But it could eventually include new entertainment content in its bouquet of offerings to attract users.

— Gagandeep Kaur, contributing editor, special to Light Reading

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topwatchvn,
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