Mukesh Ambani, India's richest man, has extended his cheap data war to everyone from internet services providers to cable TV operators as he unveiled a plan to roll out fibre-to-home broadband network across India.
“We will now use fiber connectivity to offer fixed line broadband,” Ambani announced at the annual general meeting of his flagship Reliance Industries Ltd. Called JioGigaFiber, Reliance Jio Infocomm Ltd will provide the service to homes and businesses across 1,100 cities, he said.
That could unleash the next phase of disruption after Reliance Jio triggered a tariff war driving consolidation in the world's second biggest telecom market.
An average Indian telecom user now consumes 2 GB of data every month compared to 0.23 GB before Jio’s launch, according to the Telecom Regulator’s data.
A fiber network will only further boost that, delivering everything from television content to movies to users at home.
Shares of Hathway Cable & Datacom Ltd. fell 15 percent, Siti Networks Ltd. declined 3.6 percent and Den Networks Ltd. 10.3 percent. Meanwhile, Dish TV Ltd closed 0.5 percent higher after falling as much as 1.8 percent during the session.
“The content business is going to be hit because Reliance as a company understands local sentiments, local tastes extremely well. I do expect a lot of disruption for content businesses,” said Sanchit Gogia, chief executive officer at Greyhound Research.
While Amazon and Netflix have done a fantastic job in the market, what they haven’t done is target vernacular in a big way, and Reliance will guess that market innately.Sanchit Gogia, Chief Executive Officer at Greyhound Research
A JioGigaFiber connection will come with a router and a set-top box, Akash Ambani, director at Reliance Jio, said at the AGM. Jio remote will be voice activated and support multiple Indian languages, he added.
For cities like Mumbai, Bengaluru, Gurgaon and the ones having highrises, this is a good opportunity, said Jawahar Goel, managing director of direct-to-home services provider Dish TV. But fiber-to-home is “expensive” for a row of houses, he said.
Also, the cost of acquiring a subscriber will be the range of Rs 8,000-10,000, Goel said. “In our case, it’s just around Rs 1,500.” Also, the average revenue per user for a service like Netflix is $9 plus taxes, which is significant compared to cable and DTH rates, he said. “For delivering the cable and DTH services, we will always have the competitive edge, as our cost is lesser.”
Other Highlights From the AGM
- Reliance Jio has 215 million customers within just 22-months
- It has more than 25 million JioPhone users
- JioPhone 2 will have horizontal screen and full keyboard
- YouTube, WhatsApp and Facebook services will be available to JioPhone users from 15 August
- Customers can exchange existing feature phones for JioPhones for Rs 501 starting 21 July
- Existing JioPhone scheme will continue
- Effective entry cost of JioPhone reduced to Rs 501 from Rs 1,500
- JioPhone 2 will be available at an introductory price of Rs 2,999
- Targets 100 million JioPhone users
(This story was first published on BloombergQuint.)
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