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Business News/ Companies / News/  JioSpaceFiber to target global mkts after India
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JioSpaceFiber to target global mkts after India

Tariffs for retail and enterprise users in India and abroad “to be affordable”

Reliance Jio president Mathew Oommen.Premium
Reliance Jio president Mathew Oommen.

New Delhi: JioSpaceFiber, launched on Friday as India’s first satellite-based gigabit broadband service, aims to go global following its commercial launch in India, said Reliance Jio president Mathew Oommen. Tariffs for retail and enterprise consumers in India as well as its global clientele will be attractive and affordable, he added.

“We think the opportunity for India to go global is big and Reliance will continue to review options to see how best to represent India globally and offer value to customers, leveraging the technology, capabilities we have already operationalized in India. We will be extremely competitive in any market, in any service we get into," the top executive said in an interview.

JioSpaceFiber is being piloted across four locations from its gateway at Kadapa, Andhra Pradesh, and the company plans to launch it commercially next year.

Jio will be the first company to provide 1 gigabit speeds in India and will be able to provide high-speed internet connectivity to mobile phone users in remotest areas using its 5G outdoor small cell, which acts like a 5G base station to distribute satellite connectivity signal to either a 2G, 3G, 4G, 5G, or Wi-Fi device.

The availability of the service will depend on satellite spectrum, which the government allocates. It is, however, awaiting clarity from the Telecom Regulatory Authority of India on whether it should be assigned administratively, or via auctions at a predetermined price.

Oommen said the airwaves for satellite broadband must be auctioned, since the service will compete with terrestrial telecom services. Markets such as the UAE, Thailand, and New Zealand, have set a precedent by adopting the auction route, and India must keep its interest at heart since airwaves were a scarce natural resource that should not be given out without attaching the right value through auctions.

“We believe since it is the same services, same devices, same customers, and same standards, why should it be any different. Anything other than auctions will distort the market significantly."

Oommen said the government should allow the 75,700 crore universal service obligation (USO) fund to be used for telcos’ capex or investments on networks, which is 5% of the telcos’ overall adjusted gross revenue, and is part of the 8% licence fee they pay to the government. The fund is used for ensuring connectivity in places where there is none, primarily in far flung areas with tough terrains and poor access.

“That 5% should be zero because the government should let the telcos use that for investments, give it as incentive rather than parking it in the fund that is giving no benefit. Why should the government subsidize? Well, because it’s the same government that’s asking operators to go ahead to put technology and services in different markets across the country."

The firm which launched its Jio Bharat 5G phones for 999 as a bundled plan with the device, said the USO fund should be used to subsidize the cost of smartphones and tariff plans for individual users, to drive more digital inclusion among the 250 million feature phone users.

“Anyone who cannot afford connectivity or monthly rent must be given a device and service model by leveraging the USO funds," Oommen said.

While starting price for 5G smartphone is down to 10,000 from about 15,000, this step can reduce even further, he said.

While adoption will depend on the tariffs, baseline tariffs been increased by nearly 50-70% by all carriers, and some like Airtel and Vodafone Idea have said that tariffs must rise for telco Arpus to become sustainable. Jio’s Oommen however said that the industry should look at the right pricing in order to elevate 2G users to 4G or 5G, instead of thwarting the upgrades by raising tariffs.

“Whatever tariffs that we do, we have to make sure that induce inclusive strategy that needs to be part of that, that digital empowerment should not be left behind. Increasing the tariff is the easiest thing one can but having the right tariff that takes all of India together is what I think as an industry we need to continue," he said.

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Gulveen Aulakh
Gulveen Aulakh is Senior Assistant Editor at Mint, serving dual roles covering the disinvestment landscape out of New Delhi, and the telecom & IT sectors as part of the corporate bureau. She had been tracking several government ministries for the last ten years in her previous stint at The Economic Times. An IIM Calcutta alumnus, Gulveen is fluent in French, a keen learner of new languages and avid foodie.
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Updated: 29 Oct 2023, 10:30 PM IST
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