Reliance Jio has entered the broadband market with the Jio GigaFiber a few months back. The company has already launched the preview offers for its broadband service, and we are expecting it to announce the pricing details soon. The preview offering for the Jio GigaFibertakes back to the time where the telecom operator started with a purpose of bringing 4G to the masses. From what we know so far, the Jio GigaFiber plans will be priced aggressively and it’s going to be the Jio 4G model all over again.
Replicating the Jio 4G Strategy
Reliance Industries Limited has recently released Q2 reports for Reliance Jio. The telecommunication branch of the group has recorded a profit of Rs. 681 crores the with a rise of 11.3% on a sequential basis. The telecom company is performing exceedingly well and there is no reason to change the marketing strategy for now. Instead, the model needs to make its way to the upcoming ventures, and Reliance Jio is going to do exactly that. The company will follow the same model it uses for strewing 4G to establish territory in the broadband market.
After the Q2 earnings conference of the company, Anshuman Thakur, Reliance Jio’s Strategy and Planning head said, “From our point of view, the tariff needs to make sense for the customer. The customer needs to see value in what they are paying and we will make sure they see value in it. I will not comment on the prevalent tariffs as most customers do not have a choice today as they are subscribing to services because there is a service provider that they need and an alternative is just to not have that service.”
Adding to the statement, V. Srikanth, Joint Chief Financial Officer at RIL said, “I think the right tariff to compare is to look at tariff with regard to the high-speed internet, getting the cable through the dish or otherwise and a landline. When you look at tariff, all these three come into play for relevant tariff comparison. Because the opportunities for fiber to home addresses all these in a single shot.”
RIL said it aims to boost the digital activity and connect homes with its broadband services. The company has already started onboarding the Jio GigaFiber customers and the process of providing resources with higher demands has begun. With Jio GigaFiber, the company aims to connect 50 million homes across 1,100 cities in India.
Reliance Jio Goes All Out with its Network Capacity
Reliance Jio has always been aggressive with its prepaid plan pricing and it plans on living up to its nature with the broadband services. When most of the digital services for home broadband are inconsistent and people-dependant, RIL aims to make it more consistent with one digital platform for all field activities and services. The company plans on revamping the situation with increased network capacity and we have statistics to support the claim.
Motilal Oswal Financial Services, a Mumbai-based brokerage mentioned, “Management maintained that FY19 will continue witnessing heavy capex to complete mobility capex to increase network capacity and coverage to 99%. Post that, the focus will shift toward FTTH capex. We have increased our capex estimate to Rs. 600 billion (v/s Rs. 400bn earlier). Bharti Airtel and Vodafone Idea’s India capex guidance stands at Rs. 220 billion and Rs. 150 billion, respectively. This highlights Reliance Jio’s capex intensity, which is nearly 3-4x compared to incumbents.”