Cable TV players feel Jio GigaFiber will bring a heavy but healthy competition
With Jio GigaFiber, video consumption will grow exponentially but linear TV will remain unaffected
With a target of reaching out to 50 million homes across 1100 cities through a fixed-line broadband service, Reliance Jio certainly has some big plans in the coming months to disrupt the Cable TV industry. On July 5, at Reliance Industries Limited's 41st AGM, Mukesh D Ambani announced the launch of Jio Giga Fiber, an ultra-high speed fixed line broadband service, for homes and enterprises and registrations for the same will start on August 15, 2018.
Rivals companies such as Airtel and MTNL are now gearing themselves up for cut-throat competition. As a result, Bharti Airtel has already reduced its prices for broadband services and is even offering customers unlimited data. In Hyderabad, Airtel has removed its fair usage policy (FUP) limits for its broadband customers, which means they get unlimited data. So far, most broadband plans had been providing unlimited data to users but with a certain cap.
Mahanagar Telephone Nigam Limited (MTNL) is now offering free 3G connection and data up to 10 GB with its broadband connection.
Existing players in the cable industry admit that it's going bring in heavy but healthy competition in the domain. Also, it will bring true value to the players who are currently undervalued.
“Jio has been in the wireless space earlier, and that has always been the focus area in the Indian market whereas wired broadband service has been out of focus both from the consumers' as well as the investors' side,” said Kerala Communicators Cable Ltd (KCCL) CEO, Shaji Mathews. "A company like Reliance considering this as a focus area makes wired broadband and cable TV important, which is good for the sector. The government and the financial institutions have been neglecting this sector for a long time," he added.
He believes that Reliance Jio has successfully been able to increase the appetite of consumers as far as data is concerned. “Now the fruit of that is going to be people moving to the wired broadband service (Jio GigaFiber) which will provide them much higher data as compared to wireless. We see more of video consumption going to happen. When it comes to the competition of Jio with existing MSOs, I think that existing players have a headstart because of the fiber already laid across length and breadth of the country. I foresee serious growth for the wired line.”
Another senior media executive believes that the challenge is for the existing MSOs having broadband services as the Jio GigaFiber set up box is offering broadband as well as the Cable TV services to consumers. “They are talking about a Gigabit fiber, which is obviously a tremendous amount of bandwidth coming to your house. The challenge for MSOs is how they will look at cross-selling. Every MSO has a broadband service, they are actually sitting on an opportunity of cross-selling and of going to their existing customers and bundling their broadband service along with cable TV which is where you will see the challenge coming in the next three-four months. How they will meet that challenge is the thing to look out for.”
Another MSO player, who did not wish to be named, said that Jio entering the space will bring in heavy competition in broadband services but linear TV will have its own space. “Jio GigaFiber will increase awareness and broadband consumption will increase. The bar will be raised and existing players will have to do much more to match competition. Jio's new offering will also increase opportunities in this space and bring back investors' focus on the sector," he said.
Jio GigaFibre will offer ultra high-definition entertainment on large screen TVs, multi-party video conferencing from living rooms, voice-activated virtual assistants, virtual reality gaming, digital shopping and immersive experiences. The new service will offer a router, set-top box, and fixed-line phone, among other things.
Beta trials for the new service began at selected locations in six cities — Mumbai, Delhi-NCR, Ahmedabad, Jamnagar, Surat, and Vadodara in May 2017.
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