Reliance’s JioGigaFiber to Disrupt Broadband in India

Article By : Sufia Tippu

Wireless and mobile networks take a back seat as Reliance gets in on the wired market

BENGALURU — Mobile telephony wars in India between telcos, tariffs and handset manufacturers are a thing of the past. Now it’s a war brewing in the fixed broadband – an area literally untouched and downplayed amidst the lucrative wireless landscape.

Earlier, fixed broadband was offered by BSNL, an Indian state-owned telecommunications company. But reliability, quality of service and speed were huge question marks. Then came Airtel. Riding on its huge success with mobile operations, it offered fixed broadband services which came bundled with higher tariffs but better speeds in urban areas.

Sizing the market and sensing the demand, Atria Convergence Technologies headquartered in Bengaluru, upended the market with its fibre-to-the-home (FTTH) technology and became one of India’s largest fibre broadband provider with over 1.4 million customers offering broadband services through fibre optic technology in 14 cities. Speeds were great and the prices too, but it didn’t have the deep pockets of other leading players and could not scale up.

Amidst these were local players like Hathway Cable and Datacom and others who were also in the market monopolising apartment complexes and individual houses with lock-in packages and pretty shoddy services in certain areas.

It did seem like the fixed line broadband in India, compared to other countries, was on an extremely slow burner and some analysts also predicted it could gradually peter out because huge investments were needed.

But now, with India’s second largest company Reliance Industries Ltd (RIL) entering the fixed line broadband market with its Jio GigaFiber broadband, an optical fibre-based broadband service, there is an unprecedented shake-up in the broadband market.

Out of the 450 million broadband subscribers, only a paltry 18 million are fixed line broadband users. The five leading wired broadband service providers are BSNL (9 million), Bharti Airtel (2 million), Atria Convergence Technologies popularly known as ACT (1.4 million), MTNL (0.83 million) and Hathway Cable & Datacom (0.75 million).

Incidentally, India has been ranked quite low at 134th in the global ranking for fixed broadband and poor fixed line infrastructure has been a key reason for this. About 80% of data consumption happens indoors through fixed line in homes, in offices and other premises. The fibre to the home (FTTH) service will enable the fibre to reach directly homes/enterprises. Till now, optical fibre reached the premises of the buildings while last mile connectivity is done through copper cable which makes network speeds slower at times. FTTH is more efficient and will offer higher speeds.

And, the JioGigaFiber is just that – FTTH to the core. Once it is launched, this 18-million figure is expected to shoot up as Reliance Jio promises to offer fixed-line fibre-based broadband services at unbelievably cheap rates. And, it promises to come bundled with a router and a set-top box for television, neatly latching on to the common man’s fetish for TV entertainment and movies. Once Reliance announced its foray into this space, the stocks of broadband firms such Hathway Cable & Datacom Ltd. fell as much as 18 percent, Siti Networks Ltd by 6.6 percent, and Den Networks declined by 15.3 percent.

Incidentally, this is a similar strategy that Reliance adopted when it entered the telecom domain and launched its mobile-phone venture Reliance Jio Infocomm – with free voice calls, large data packages and the 4G phones connectivity – all aimed at getting a critical mass. As expected service issues cropped up because of this sudden unparalleled and unprecedented volume but in time, the glitches were ironed out.

According Mukesh Ambani, Chairman, RIL, about $36.3 billion has been spent so far in creating digital infrastructure to provide mobile broadband connectivity.

“While India has made strides in mobile broadband and is globally competitive, it still lags significantly in fixed-line broadband. JioGigafiber will be the largest greenfield fixed-line broadband rollout anywhere in the world, with rollout happening in 1,100 cities of India simultaneously,” Ambani said at the company’s annual general meeting last month.

Although the launch date is not yet known, registrations are on and Jio has announced a preview offer for all its broadband customers in which they will not have to pay anything to get free 100GB data for 3 months. The 90-day offer comes with an internet speed of up to 100Mbps. Reliance is currently running beta trials of JioGigaFiber in several thousand homes.

Frenzied price cuts and data packages rain on consumers

Existing operators such as BSNL, Airtel and others are preparing for tough competition from Reliance Jio. They have already reduced their prices and have come out with fresh offers to retain customers who may be planning to switch their loyalty to the new market entrant.

Recently, ACT Fibernet announced that it would offer free 1.5 TB data to customers in Bengaluru and Coimbatore – they would be able to consume 300 GB broadband data per month till February 2019 on specific plans. Earlier in April, ACT Fibernet has announced its partnership with Google to support its Google Home smart speakers with fiber-to-the-home (FTTH) connectivity. As part of this, ACT Fibernet will offer a bundle of special plans for its customers.

Airtel on the other hand, besides its mobile operations, has been quite aggressive in the broadband space as well. It has launched its V Fiber and FTTH-based broadband services in few cities already and is expanding aggressively. The telco is strengthening its strategic partnership with US-streaming site, Netflix, in a bid to take on Reliance Jio’s upcoming fast wired broadband services bundled with internet TV. It is now offering a 3-month Netflix gift subscription to select V-Fiber home broadband and postpaid users.

Tata Sky, a dominant player in the DTH TV space, has launched its broadband plans already to compete with Jio.

Smaller players too are scrambling with price cuts in their packages and marketing gimmicks.

But with the JioGigaFiber juggernaut just around the corner, William Sherman’s words “War is hell” during the American Civil war is not applicable in this particular battlefield. It is going to be a blessing for India’s fixed broadband subscribers who had to put up poor quality and high tariffs for the past few years.

— Sufia Tippu is a freelance tech journalist based in India contributing to EE Times India

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