HIGHLIGHTS
- JioFiber broadband plans to start from Rs 700 with bundled services
- JioFiber will also have a Welcome offer on September 5 after commercial launch
Reliance Jio’s bundled broadband servicesplans may leave DTH firms “most vulnerable”, and work out to be “neutral to slight negative” for Bharti Airtel, as it raises competitive heat in corporate and home internet space, a Bank of America Merrill Lynch report said on Tuesday. The view comes after Reliance Industries on Monday revealed its plans for fixed-line broadband services ‘JioFiber’ that will offer optical fibre-based ultra-high-speed internet bundled with HD television viewing at less than one-tenth of global rates.
DTH Operators Could Be Most Vulnerable to JioFiber Bundled Plans
Bank of America Merrill Lynch said that direct-to-home (DTH) companies could be “most vulnerable” to Reliance Industries’ bundled broadband and cable services as they are unlikely to offer dual services. It did not anticipate a direct impact on broadcasters but said that indirect impact on subscription revenue could be felt if DTH/MSOs (multiple-system operator) revenue are affected.
“Long-term impact would be on ad spends if advertisers focus more on advertising on Over-The-Top (OTT) and spend more on producing quality content to compete with Amazon, Netflix etc.,” it said.
The report did not rule some pressure on Bharti’s broadband revenue triggered by Jio’s entry in the space. However, it said, the impact is likely to be limited as overall fixed broadband penetration remains low (at less than eight per cent) and large greenfield opportunities remain.
Bharti Airtel did not respond to an e-mail query on the issue.
Jio with over 340 million mobile subscribers has become the country’s largest operator in revenue terms within three years of launching its mobile services and now hopes to pull off the feat in fixed-line broadband services.
JioFiber to Offer 100 Mbps Broadband Plans Starting at Rs 700
JioFiber will offer free voice calls for life from landlines, 100 Mbps minimum broadband speed at subscription starting from Rs 700 a month and free HD TV set on a commitment to an annual plan. It has declared that the landline rates for international calling will be the “lowest”, and its plans will come bundled with subscriptions to most leading premium OTT applications.
JioFiber’s plans will be priced between Rs 700-10,000 per month. HSBC, however, said RIL seemed to be targeting only a gradual addition of subscribers.
“In its wireless offering, it was easier for subscribers to switch operator but given the low penetration of wireline internet in India, RIL will have to attract new subscribers,” it said.
The report further said that Hathway, Den, GTPL Hathway(owned or investee companies of RIL) also offer home broadband at price of Rs 350-400 per month but offering lower speeds of 50 Mbps, whereas RIL is promising a minimum speed of 100 Mbps at a minimum rate of Rs 700.
“We expect the adoption of this offering to be gradual with a long term view of 4-5 years,” the report said. Compared to wireless where prices were at a discount to prevalent rates, JioFiber consumers will have to pay more for new technologies, it added.
“On Cable TV, RIL has opened a platform for collaboration with LCOs (Local Cable Operators) rather than announcing any disruptive pricing,” the brokerage report.
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