RIL to replicate Reliance Jio model for Jio GigaFiber
Reliance Jio is planning aggressive tariffs and a gamut of product offerings for Jio GigaFiber to disrupt India’s broadband and cable market
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.
Reliance Jio’s acquisition of Hathway Cable and Datacom Ltd and Den Networks 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 Reliance 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 speed of over 100Mbps; 1,000 plus Reliance Jio centres and a distributed presence to service 50 million-plus homes and 10 million enterprises.
RIL on Wednesday said Reliance Jio has begun onboarding Jio GigaFiber 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 with Jio GigaFiber. 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 Airtel and Vodafone Idea’s India capex guidance stands at ₹220 billion and ₹150 billion, respectively. This highlights Reliance Jio’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.
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