RIL to replicate Jio model in broadband
MARKET DISRUPTION Reliance Industries plans to use aggressive pricing for broadband and cable services, similar to what it did with Jio
MUMBAI: Reliance Jio Infocomm Ltd which disrupted mobile telephony in India with rock-bottom tariffs two years ago is set to do an encore in the broadband and cable market, through an aggressive pricing strategy and a gamut of product offerings.
“From our point of view, the tariff needs to make sense for the customer. The customer needs to see value in what they are paying and we will make sure they see value in it. I will not comment on the prevalent tariffs as most customers do not have a choice today as they are subscribing to services because there is a service provider that they need and an alternative is just to not have that service,” said Anshuman Thakur, Reliance Jio’s strategy and planning head, post the company’s second quarter earnings conference on Wednesday.
Jio’s acquisition of Hathway Cable & Datacom Ltd and DEN Broadband Pvt. Ltd are only seen as facilitators in the process.
“I think the right tariff to compare is to look at tariff with regard to the high-speed internet, getting the cable through the dish or otherwise and a landline. When you look at tariff, all these three come into play for relevant tariff comparison. Because the opportunities for fibre to home addresses all these in a single shot,” said V Srikanth, joint chief financial officer, Reliance Industries Ltd (RIL), of which Jio is a wholly-owned subsidiary.
In a presentation to analysts post its second-quarter earnings, RIL said it is in an exclusive position to connect homes and boost digital activity.
The company is banking on its all-IP, pan India fibre, 1 Gbps ready network with average
JIO’S ACQUISITION OF HATHWAY CABLE & DATACOM AND DEN BROADBAND ARE ONLY SEEN AS FACILITATORS IN THE PROCESS
speed of over 100 Mbps; 1,000 plus Jio centres and a distributed presence to service 50 millionplus homes and 10 million enterprises.
RIL on Wednesday said Jio has begun onboarding GigaFibre customers and is ramping up resources wherever there is demand, connecting customers in all of these areas.
RIL plans to connect 50 million homes across 1,100 cities in the country.
Its latest investments mean it will now be able to utilize the 27,000 strong local cable operators’ (LCOs) network of Hathway and Den broadband connections. The LCOs provide RIL with direct access to 24 million homes, across 750 cities where Hathway and Den offer broadband connections.
Currently, the digital platforms for home broadband are largely people-dependent and inconsistent.
RIL plans to revamp it with its digital platform for execution and performance, online ticket generation and support and provide an online platform for all field activities and services. “Management maintained that FY19 will continue witnessing heavy capex to complete mobility capex to increase network capacity and coverage to 99%. Post that, the focus will shift toward FTTH capex. We have increased our capex estimate to ₹ 600 billion (v/s ₹ 400bn earlier). Bharti and Vodafone-Idea’s India capex guidance stands at ₹220bn and ₹150bn, respectively. This highlights RJio’s capex intensity, which is nearly 3-4x compared to incumbents,” said Motilal Oswal Financial Services, a Mumbai-based brokerage, in its report dated 18 October.