Live Post
China Says Area Where Road Being Built Does Not Belong To Bhutan, India
TMC not to attend GST roll-out programme: Mamata
Byculla jail inmate death: Court permits Indrani Mukerjea to lodge complaint as she alleges sexual assault threat
Mob thrashes man, suspected of slaughtering cow
62 per cent votes cast in second phase of local polls in Nepal
RIL refinances $2.3 billion loans to cut interest cost
Mallya paves way for F1 team to be a force without India
7th Pay Commission: Modi Cabinet approves revision in HRA rates, other allowances

Reliance Jio Media puts cable TV launch on slow track

MUMBAI: Reliance Jio Media has put its cable TV launch in Phase III towns of digital addressable system (DAS) on the back burner, implying that the entire focus of India’s richest man Mukesh Ambani will initially be on the fourth-generation (4G) telecom play and broadband rollout.

Changing the original plan of aggressively entering the MSO (multi-system operator) business in DAS Phase III towns ahead of the 31 December 2015 deadline, Reliance Jio in its first outing is looking at tying up with local cable operators (LCOs) for broadband only. Talks have already started with the LCOs for partnering on broadband services and a commission fee structure is being worked out.

Reliance_Jio-main_logo“Cable TV will not be the first horse out of the Reliance Jio stable. The priority is on launching 4G services while simultaneously working on the wired-access fibre-to-the-home [FTH] project. LCOs are being approached for broadband and not for digital cable TV services, ” a source familiar with the development said.

Digital cable TV is turning into a black eye for several networks. With the MSO–LCO tussle on revenue share continuing and packaging of channels for consumer selection largely absent, the business model for digital cable needs to evolve. Reliance Jio Media could be waiting for the business norms to correct before it steps into the MSO business.

“Reliance Jio Media officials have been talking to us on partnering for broadband. They have not been talking on tying up with us for cable TV services. There is no mention of digital headend or set-top boxes. . Knowing Reliance, the plan could, however, change if an opportunity arises,” several LCOs across cities told TelevisionPost.com.

Incidentally, Reliance Jio Media, a subsidiary of Reliance Jio Infocomm, has procured a pan-India MSO licence from the Ministry of Information & Broadcasting (MIB).

Mukesh_AmbaniSo, what is on offer for the LCOs? “Reliance Jio is willing to offer us a commission of 10–12 per cent on broadband revenues. We can be with them on a non-exclusive basis. What this means is that we can continue with whatever broadband services we are already offering. They will invest in infrastructure and will own it. The deal being proposed is for five years,” echoed the LCOs, preferring anonymity.

Several cable operators said that the commission on offer is not lucrative enough. “As resellers of bandwidth, we operate on higher margins. Even when we provide broadband services of MSOs, the commissions are higher,” they said.

Reliance Jio, however, believes that while margins are going to stay competitive, volumes will be the main attraction. Besides, aggressive pricing, higher speed levels and better services will put pressure on LCOs to join the Reliance Jio camp.

The 4G wireless scale-up is happening at a furious pace as the launch is expected in December. The FTH route will take longer time as physical infrastructure needs to be in place. The initial focus is on the bigger cities including Mumbai, Delhi, Bengaluru, Hyderabad and Pune. For wired connectivity, the company will take the help of the LCOs to reach homes.  The operators are also being tapped in areas where mobility requires support.

Why is Reliance Jio looking to partner LCOs? The LCOs will provide last-mile access to the consumer homes. Though Reliance Jio has already laid 250,000 km of fibre-optic network until June, it has still to connect individual homes. Cable operators will provide a faster growth route and can be construction partners by cabling and wiring up the building.

Reliance Jio has planned an FTH arrangement to offer TV channels to consumer homes. The overall plan is to be a formidable quad-play service provider. The bet is to change the landscape with internet, TV, landline and wireless provisions.

Will Reliance Jio Media miss the cable TV bus if it does not participate in Phase III of DAS before the deadline? Media analysts say that the company could look at acquiring LCOs, independent operators or MSOs once the market settles down. Sporadic launches also could happen before scaling up.

“Capital is not an issue with Reliance. It could wait for the business dynamics to change after DAS settles in. Then it can decide on whether it wants to take the acquisition route or lure consumers by bundling its multiple services at affordable prices,” said a media analyst at a broking firm.

Also read: