Monday, October 26, 2015

Reliance Jio – Much more than a pipe dream

Apart from the big-bang launch of its wireless 4G telecom operations by the end of CY15, wired access (optical fibre to home – FTTH) is a big play for Reliance Jio. Towards this end, Jio has also obtained an MSO (Multi-System Operator) license, to provide cable TV via fibre-connectivity as a bundled service offering along with high-speed broadband access.

Unlike global TV distribution entities, RIL is starting with an entirely clean slate. The company does not have any legacy in the telecom, cable or broadband businesses. Globally, 30% of MSO cable TV providers’ revenues come from providing broadband access, which is a lowly 10-12% in India as yet; hence MSOs are incrementally looking to bundle broadband to their established user-base. In line with the approach taken by telecom players globally, Jio’s approach to bundling is the opposite of existing Indian cable TV operators’ (MSOs), which look to provide broadband as a value-added service.

Jio’s wired-access roll-out is happening alongside the 4G wireless rampup. However, its impact will probably be more of a 2-year-horizon event given that on-ground lastmile access takes time to build up critical mass.

The benefits of having wired connectivity (in many cases in parallel with wireless) are manifold:
  • Reduced requirement for towers, since optical fibre cables are used for backhaul
  • Reduced load on airwaves as service-delivery shifts to wired channel wherever available
  • Significantly higher bandwidth availability allows rich-content like IP TV

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