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Jio Gigafiber plans will be 50% cheaper than existing broadband rates: Report

Jio's broadband service JioGigaFiber will launch with plans priced as low as around Rs 500 a month.

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Jio Gigafiber plans will be 50% cheaper than existing broadband rates: Report

In 2016, India's richest man Mukesh Ambani had made a dramatic entry into the telecom sector with Reliance Jio Infocomm and shook up the industry with his disruptive pricing. Now he is reportedly readying for an encore, in the broadband market as well as the cable TV and direct-to-home market this time round.

According to The Economic Times, JioGigaFiber will launch with plans priced as low as around Rs 500 a month. That's 50 per cent lower than the current rates charged by cable operators for similar services. To remind you, the high-speed fibre-to-the-home (FTTH) broadband service announced by Reliance earlier this year includes a JioGigaTV set top box for 4K enabled media connectivity and streaming services on the idiot box.

The report added that home broadband packs promising around 100GB of data per month at 100 Mbps speed are currently offered by cable operators at Rs 700-1,000 a month per household, plus an additional Rs 250-300 per home for TV services. Jio has effectively halved the pricing for a similar bundled offer as it focuses on volumes to drive demand.

Better still, Jio Gigafiber's pricing is reportedly expected to be 25-30 per cent cheaper than current 4G mobile data rates, which are in the Rs 2.7-5 per GB range. But this is unlikely to hurt Jio's 4G mobile data business. "There can be very limited cannibalisation even if Jio prices fixed broadband (with bundled internet TV services) at 30 per cent below 4G mobile broadband rates as the two data products are very different - one meant for the home user and the other for the person on-the move," Naveen Kulkarni, telecom analyst at PhillipCapital, told the daily. He also pointed out that the quality of video streaming in a fibre-based home broadband scenario would be far more reliable and consistent than 4G mobile broadband.

"Starting this Independence Day, August 15, you can start registering your interest for JioGigaFiber through both MyJio and Jio.com," Ambani had announced at Reliance Industries' 41st AGM meeting last month, adding, "We will prioritize our JioGigaFiber rollout to those localities from where we receive the highest number of registrations".

A source in the know told the daily that the company is sticking to this plan and is looking at a commercial rollout of Jio GigaFiber before Diwali (November 7), initially in the metros and about 80 top tier 1 and 2 markets. The report added that Jio may rely on IP multicast - a bandwidth-conserving technology that reduces traffic by delivering a single stream of information simultaneously to a large group of recipients - to offer internet-based TV services so that home broadband customers don't use up their data for TV.

According to Rajiv Sharma, HSBC director and telecom analyst, IP multicasting makes sense because "without such a technology, Jio would have had to provide each home a data allowance of over 500-600 GB per month for delivering TV services alone, which would limit the company's ability to price home broadband with bundled TV services at an attractive Rs 500 per month".

In many Western countries, consumers are increasingly opting for multiple telecom products in a single "bundled" package from a single company in order to save money. For instance, telecoms giants like Verizon in the US and Vodafone Plc in the UK have already moved towards quad-play packages that bundle up fixed line, broadband, mobile and TV, since they not only increase sales - and market share - but also help with customer retention. Jio clearly has similar plans.

Edited By Sushmita Choudhury Agarwal

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