Reliance Jio announced its Jio Fiber plans on Thursday evening. Its interesting that the company has opted for a "no free offer" strategy, unlike the telecom launch when they had given six months free service. How has Dalal Street taken to the news and how will it impact competition? Reliance Industries closed 1.8 percent in the green on Friday. Here is a deep dive.
The focus seems to be on average revenue per users (ARPUs) and trying to get customers to stay on with their business. However, this could result in a gradual subscriber ramp-up. According to Kotak, Jio Fiber strikes a good balance between leveraging its capacity, and enhancing the customer potential revenues as well as profitability.
Speaking about the impact on Bharti Airtel, Jio Fiber plans should not be as disruptive for the company as it was in the case of telecom. Reliance Jio’s base plan stands at Rs 699 whereas Bharti Airtel’s plan stands at Rs 799. However, in terms of speed, Reliance Jio’s speed for broadband is going to be more than that of Bharti Airtel.
There is a possibility that subscribers from BSNL and MTNL will shift to Reliance Jio. BSNL and MTNL plans are cheaper – BSNL has monthly plans starting at Rs 400 per month but BSNL and MTNL speed stands at 6-8 mbps versus Reliance Jio’s base minimum speed of 100 mbps. Hence, if customers are willing to pay the Rs 100-200 extra they could get a much better offering and which is why its estimated that 9-10 million subscribers may migrate from BSNL.
The Jio Fiber plans are seen positive for Dish TV and DTH and cable operators as cable TV is not provided as a part of these plans. It is also positive for PVR because the ‘first day first show’ premium content is only available on higher priced plans. It starts for plans starting with Rs 2,499 and more.
Reliance Industries, the parent company of Reliance Jio, owns Network 18 that publishes CNBCTV18.com.