Jio to make fibretohome its next big battleground
TESTING PHASE Operator has flagged off beta trials for its broadband service NEW DELHI:
After disrupting the wireless telecom sector, Mukesh Ambani’s Reliance Jio Infocomm Ltd is set to make fibre-to-home its next battleground with the formal commercial launch likely towards the end of this year.
“Jio’s main focus now is fibre to home...it has reached a sizeable base of wireless subscribers at 168 million...now all efforts now are to successfully deploy wired Internet to homes...the full-fledged commercial launch is likely to be announced on 28 December which happens to be Late Dhirubhai Ambani’s birthday,” a person familiar with the development said, requesting anonymity.
Jio has already initiated beta trials for its wired broadband service across a few locations in the country. It has offered free broadband across regions in New Delhi and Mumbai with unlimited internet at 100 mbps for a security deposit of ₹4,500.
“We are still deprived as a nation from a fixed mobile standpoint...we have only about 18 million connected homes in India...we would like to see at least 200 million,” Mathew Oommen, president of network, global strategy and service development at Reliance Jio had said recently at the CNBC’s Indian Business Leaders Awards.
Brokerage firm CLSA India expects a ₹4,000 crore boost to Reliance’s earnings before interest, taxes, depreciation and amortisation in three years on the back of the roll out broadband internet services, a Bloomberg report said.
The low penetration of wired internet services is another factor that could boost Jio’s efforts. According to Trai data, as on December 31, India had only 21.28 million wired internet subscribers compared to 424.67 million wireless internet subscribers. In the wired internet segment, Bharat Sanchar Nigam Ltd (BSNL) holds 52.53% market share with 9.38 million subscribers followed by Bharti Airtel with 10.12% market share and Atria Convergence Technologies Pvt. Ltd (ACT) with 6.02% share.
Jio’s focus on fibre also comes with the rise in data usage seen in the last one year.
According to data from Trai, for October-December 2017, the average data usage per subscriber per month was 1,945 MB, much higher than 878 MB in October-December 2016. To cash in on this surge in data, RIL recently announced an integration with leading music app Saavn for its digital music service JioMusic, apart from separately buying a 5% stake in film company Eros International Plc.
“Given the huge demand for content, fibre is the better bet than wireless which can provide only a fraction of the capacity of fibre. Fibre capacity can also be enhanced easily. However, fibre is a tough business: the fibre has to reach every single location physically. That is a nightmare given the challenges of installing underground fibre. Permissions for digging involve huge costs and delays. However, those who do succeed can expect huge rewards from the market,” Mahesh Uppal, director at consulting firm ComFirst India, said.
Jio’s rival Airtel provides high-speed wired broadband up to 100 mbps to 2.1 million users across 89 cities in India. As of December end, Airtel’s average revenue per user from its ‘Homes Services’ segment was ₹948. Broadband customers account for 93.5% of its ‘Homes Services’ segment.
“Wired internet is not a panIndia game, Airtel has consciously only focussed on regions where it saw good revenue coming in,” a person aware of the matter said.