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Mukesh Ambani looks to disrupt cable TV, DTH market with JioPhone TV cable

MUMBAI: Mukesh Ambani’s Reliance Jio has launched a new smartphone, the JioPhone, along with a Jio Phone TV cable, which will allow users to access the 4G service provider’s digital media services like Jio TV and Jio Cinema on their TV screens, thus intending to disrupt the cable TV and direct-to-home (DTH) markets.

Unveiling the new product at Reliance Industries Ltd’s (RIL) AGM, Ambani said JioPhone will be available at virtually no cost barring a one-time refundable security deposit of Rs 1,500.

A JioPhone user can use the JioPhone for 36 months and get a full refund of the security deposit of Rs 1,500 by returning the used JioPhone, Ambani said.

With JioPhone, Ambani’s target is the 50 crore feature phone users who do not even have access to basic internet and apps.

The JioPhone will be available for user testing in beta from 15 August and for pre-booking from 24 August. The smartphone will be physically available to those who have pre-booked, on a first-come, first-served basis, from September.

“JioPhone will be available to all Indians for an effective price of Re 0. We know that anything free can potentially be misused. To protect against misuse of the free JioPhone offer, we plan to collect a fully refundable, one-time, security deposit of Rs 1,500 with every JioPhone. A JioPhone user can use the JioPhone for 36 months, and can get a full refund of the security deposit of Rs 1,500 by returning the used JioPhone. Net-net, you pay nothing for the JioPhone,” Ambani said during the AGM.

JioPhone users will get unlimited free voice calls. They will also get unlimited data with Jio Dhan Dhana Dhan plan of Rs 153 per month. In order to ensure that bandwidth is fairly apportioned for every user, there will be a fair usage policy of half a GB per day per user.

For users who cannot pay Rs 153 upfront, the telco has introduced a weekly plan for Rs 54 and a two-day plan for Rs 24 with a 500 MB data limit per day.

Reliance Jio Digital Services has a suite of content apps like Jio TV, Jio Cinema, Jio NewsPaper and Jio Mags which offer live TV, on-demand movies, music and news content.

These services, particularly Jio TV and Jio Cinema, will allow JioPhone users to watch more than 450 live TV channels and over 1 lakh+ hours of movies, TV shows, music videos, clips, and trailers on their TV screens using the JioPhone TV cable accessory.

Without disclosing the price of JioPhone TV cable, the RIL chairman and MD said that the accessory will be affordable.

“Many JioPhone users might like to view their favourite content such as live TV, movies, education on the big screen of their television sets. This is especially true in many remote parts of India where even cable TV and high-speed internet have not reached. Our young Jio engineers have created an innovation to help them—a special and affordable ‘JioPhone TV cable’ that connects JioPhone with any TV, not just a smart TV, so that all JioPhone users can enjoy viewing on the big screen of their existing television sets,” Ambani said.

However, the data cap of 500 MB per user in Jio Dhan Dhana Dhan plan will restrict the consumption of content on bigger screens as live TV, TV shows and full-length movies consume a large amount of bandwidth.

JioPhone users can opt for the existing Jio Dhan Dhan Dhan 309 pack that allow them to watch almost 3–4 hours of videos daily, of their choice, on a large screen along with JioPhone TV cable.

This means that cable TV and DTH operators can breathe easy for now as there is no immediate threat from Ambani’s latest disruptive move. Currently, cable TV and DTH subscribers get hundreds of channels across genres for a monthly subscription fee that falls below that price range, though it moves up depending on the plan.

Cable TV and DTH subscribers also get unhindered access to TV channels without any bandwidth constraints.

Cable and DTH stocks took a beating at the stock market following Ambani’s announcement. Dish TV stock dropped 5.85% to close Friday at Rs 78 on BSE, Hathway Cable and Datacom’s fell 2.58% (Rs 34), Siti Networks saw a 0.77% (Rs25.85) dip and DEN Networks was marginally down 0.13% (Rs 78.85). GTPL Hathway’s stock was down 2.28% (Rs 163) and Ortel Communications fell 1.45% (Rs 67.95).

Reliance Jio has started hurting in a very small way the ARPUs of DTH companies by bringing down data prices, which has led to a surge in content consumption on mobile phones. The over-the-top (OTT) platforms owned by big broadcasters like Star India, ZEEL, Sony Pictures Networks India and Viacom18 are free. Alphabet’s YouTube, which has a plethora of content, is also free. The combination of free content and affordable data cost has started to marginally impact traditional TV platforms.

Ambani also noted that in just six months of Jio’s launch, data consumption in India went from 20 crore GB to 120 crore GB per month. “Jio customers alone are consuming over 125 crore GB of data every month, including 165 crore hours of high-speed video every month, making Jio the largest mobile video network. Indeed, India has overtaken the USA and China in mobile data usage. Before Jio’s launch, India was 155th in the world in mobile broadband penetration. Now India is No. 1 in mobile data consumption and well on its way to becoming No. 1 in mobile broadband penetration, in the coming months,” he stated.

He also said that Jio has proved sceptics wrong by converting 100 million free users to paying Jio Prime customers.

Talking about his media and entertainment business, Ambani said that this business has exponential growth potential in the future with digitisation of the media business and expansion of mobile broadband and fixed broadband connectivity driven by Jio.

“This business spans 53 television channels and several digital media properties, all of these housed across Network18 and Viacom 18, our joint venture with Viacom. We are also the partner of choice in India for leading global brands such as CNBC, CNN and Forbes. Last year, we launched three new regional news channels in Kerala, Tamil Nadu and Assam under the News18 brand. These channels on average reach over 500 million viewers every week, one of the highest among all TV networks in India,” he said.

Click here to read full speech of Mukesh Ambani