Jio GigaFiber launch: Cable TV honchos unperturbed by grim predictions
MUMBAI: Ever since Mukesh Ambani has formally announced the launch of Reliance Jio wireline broadband service Jio GigaFiber, most analysts have made a grim prediction for the cable TV sector.
The forecast has been made on the premise that Jio GigaFiber’s twin offer of wired broadband plus 4K set top box (STB) will prove to be a mouth-watering proposition for customers, who will not think twice before ditching their pay TV service providers.
On 5 July, Ambani had announced that the long-awaited Jio GigaFiber project will commercially roll-out from 15 August across 1100 cities. Jio GigaFiber will offer 1 Gbps download speeds and 100Mbps upload speed.
Jio GigaFiber will have its own special router called Jio GigaRouter besides a set top box (STB) Jio GigaTV that will allow customers to place voice calls, and allow for media sharing as well. The company had also announced that Jio GigaTV will provide 600 TV channels.
Credit rating agency India Ratings, in its latest report, had stated that the launch of Jio GigaFiber has the potential to disrupt the retail broadband segment and open up new digital avenues for the enterprise broadband segment.
The report had noted that Reliance Jio Infocomm is well positioned to capitalise on its wide fibre optic network across India, subject to it addressing last-mile connectivity challenges.
It had also stated that JioGigaFiber would certainly increase competitive intensity among MSOs and direct-to-home (DTH) players. The extent of the impact across MSOs and DTH players would depend on their geographical diversity with regard to subscribers, the relative attractiveness of the market, and current tariffs and service offerings.
Ind-Ra had also said that RJio’s optical fibre roll-out would be positive for content generators, as demand for and consumption of digital content is likely to rise post the availability of high-speed internet.
Most cable TV head honchos feel that the launch of Jio GigaFiber will be beneficial for the industry as a whole as penetration of wireline broadband in India is pathetic. They also see the entry of Reliance Jio as a sign of the potential that this industry possesses.
They are also unperturbed by the perceived threat from Jio GigaFiber as unlike wireless broadband the implementation of wired broadband will require a lot of effort. The last mile connectivity is easier than done notwithstanding the investments being made, they claim.
DEN Networks CEO SN Sharma said that the Indian market is big enough to accommodate multiple players.
“The market size in India is huge with space for all. We welcome this development. This shows the business potential in the sector. Entry by an organised player and that too a large telco like Jio will bring lot of attention and attraction in this space,” Sharma said.
He also feels that the launch of Jio GigaFiber will accelerate the process of wired broadband roll-out in the country as other players will also spring into action to get a slice of the broadband market. “This will also mean faster roll out of Broadband Services in the country. And will also bring in latest technology. All the same, it means better systems processes for a robust business model,” he added.
Sharma feels that the wireline broadband has so far been ignored. “India just have 6% penetration level, whereas all developed economies have close to 60%+ penetration,” he noted.
DEN, Sharma said, has already announced low Capex based Broadband Plan to cover 100 cities in next 12 months. The rollout is in progress with plans at a price of Rs 550.
Echoing Sharma’s sentiments, Siti Networks chief business transformation officer feels that competition is good for the industry and will accelerate the growth of the sector. He also feels that Jio GigaFiber roll-out will ensure rapid consolidation in the industry.
Sethi feels that Siti will not see a big impact in the short-term on its business considering it is more focussed on the video business, unlike other MSOs who have a significant exposure to the broadband business.
He also stated that for Jio GigaFiber managing the complexities of last mile connectivity will be the key something which the MSOs are adept at. “In our case, we know how to manage last mile connectivity. We know how to manage last mile connectivity along with our partners in a symbiotic and mutually manner,” he averred.
Having said that, Siti will look at increasing the depth of its broadband presence rather than expanding to newer areas. “As a strategy, we are more focussed on increasing our penetration where we already have a home-pass creation to ensure better utilisation of our wired infrastructure,” he stated.
Apart from deepening its presence in existing markets, it will also work on reducing its churn besides improving direct customer connect through last mile operator to offer better service.
“We are also focussed on identifying some low hanging fruits. A few months back we launched in Nagpur. We are not going beserk. We are treading very carefully in this space so that we are able to generate RoI for all the stakeholders,” Sethi said.
Fastway Transmission CEO Peeush Mahajan said that the industry is awaiting further details on Jio GigaFiber service. He, however, believes that Jio GigaFiber will bring in the competition which will help the wired broadband market to grow. It will also lead to an improvement in service and a better choice for customers.
Mahajan is not too worried about the likely impact from Jio GigaFiber stating that the MSOs and LCOs have also been doing FTTH broadband for many years now. He also feels that the FTTH roll-out will not be an easy task for Reliance Jio.
“Jio is talking about the urban market which just contributes 30% to our business. For us, the big growth area is rural areas. We have been focussing on the broadband business for the last two years because we knew someday somebody will come. The rural market is still untapped,” Mahajan elaborated.
Having already invested Rs 150 crore in broadband roll-out in the last two years, Fastway has planned a Rs 250 crore Capex over the next one and a half years to expand its broadband footprint. “We have already invested Rs 150 crore in broadband and planning to invest Rs 250 crore more over the next 1.5 years till December 2020,” he stated.