What does Reliance JioFiber mean for DTH, cable operators and OTT sector?

RIL Chairman Mukesh Ambani on Monday announced that the group plans to reach 20 mn residences and 15 mn business establishments to roll out optical fiber-based fixedline broadband service JioFiber

by Tasmayee Laha Roy & Moumita Bhattacharjee
Published - Aug 13, 2019 7:46 AM Updated: Aug 13, 2019 10:38 AM

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Reliance

Marketing is all about innovations and disruptions and no one seems to have mastered this art better than Reliance Industries Ltd (RIL). In the group’s 42nd annual general meeting on Monday, Chairman Mukesh Ambani said they have drawn up a plan to reach 20 million residences and 15 million business establishments to roll out Jio's plan for optical fiber-based fixedline broadband service JioFiber.

So what impact will JioFiber have on DTH & cable operators, the OTT industry and the advertisers? Industry experts have mixed opinion on it.

Mahesh Uppal, Director at communications consulting firm ComFirst India, feels that the announcements made by Mukesh Ambani will have different kinds of impact on players in the market. “If Reliance Jio starts broadband service in an area where BSNL is providing the service, it would be a very difficult challenge for the beleaguered PSU to compete against the behemoth,” elaborated Uppal.

“As internet becomes the favoured medium for entertainment, DTH and cable players will face a more serious threat. However, this is good news for OTT players who would get more eyeballs, more money and hence more room for expansion,” Uppal added.

OTT players are no doubt happy with the development. More data for them is directly proportional to more subscribers. OTT players foresee growth in the sector as OTT watching would shift from mobile screens to television, thanks to Reliance.

Karan Bedi, CEO, MX Player, believes that India’s appetite for premium on-demand entertainment will continue to rise with more affordable high-speed broadband, which in turn will boost engagement for OTT players. “As the only Indian online entertainment platform that offers viewers premium content to binge for free, MX Player users stand to benefit significantly from the announcements made by Jio today,” he said.

The new entrants in the data & cable network market from the house of Reliance include a host of products and services. “With JioFiber, you get lightning fast broadband speed of up to 1 GBPS. You get a landline phone connection at no additional cost. And you get a digital set-top box that opens up unparalleled digital experiences within your home: ultrahigh definition entertainment, virtual reality content , multi-party video conferencing, voice-enabled virtual assistants, interactive gaming home security and many other smart-home solutions,” Ambani said in the speech.

He added, “The digital possibilities are endless. Television services in India is a classic small-businesses success story, where Local Cable Operators (LCOs) played a pioneering role. In recent years, competition from DTH operators have threatened the viability of nearly 1 lakh LCOs who still operate across India. As firm supporters of local and small businesses, Jio wanted to ensure that these LCOs continued to serve their communities. Earlier this year, RIL acquired controlling stakes in three leading cable MSOs – Hathway, DEN and GTPL-- who have direct relationships with over 30,000 LCOs. Over the past months, we have worked with our MSOs to upgrade their infrastructure to world-class standards. After these upgrades, our LCO partners will now be able to offer the largest bouquet of high-definition channels to customers with better features, reliability and customer experience than even DTH. But now we have gone one step further. We have designed our Jio set-top box to accept the broadcast cable TV signals from our LCO partners. So that with every JioFiber home, all our LCO partners will continue to have a steady stream of revenue for their broadcast TV business.”

According to Ambani, JioFiber would enable a powerful combination of fixed-line connectivity and cloud applications, leapfrogging them from no technology to having a complete line-up of cutting-edge, plug-and-play technology-enabled tools.

JioFiber will launch with a line-up of simple and easy to understand tariff plans. Elaborating on tariff plans, Ambani in his speech, said, “In India, even the most basic JioFiber plan starts with 100 Mbps speed and we have plans all the way up to 1 Gbps or 1000 Mbps. This will disproportionately improve the quality of fixed-line data in India. And we are pricing our plans at less than 1/10th of the global rates to make it accessible for all. JioFiber plans will be priced between Rs 700 and Rs 10,000 per month to suit every budget and every need.”

JioFiber plans will come bundled with subscriptions to most leading premium OTT applications. Alongside other offers, JioFiber customers who opt for annual plans will get an HD or 4K LED televisions and a 4K set-top-box absolutely free.

So, what more can the nation ask for after all.

Nitin Sharma, Executive Vice President- Distribution, 9X Media Pvt. Ltd, feels that the kind of pricing Reliance has come up with for the bundled services is very lucrative.

“They have been waiting to launch it for quite some time. That's because most of the cable operators were also worried that people have already invested in broadband services. There has been a sense of anxiety,” he says.

But what about advertisers? Are they also going the digital way?

“There has been a lot of discussions going on about how advertisers should react. Should they go to television or digital? In the last couple of years, we have seen the way digital has grown. Television is definitely the Number 1 medium, but over a period of time, digital will be at par. It will be a win-win for advertisers also. They will be able to tap consumer homes easily,” added Sharma. 

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