Jio readies itself for fixed broadband assault

Reliance Jio is set to pile more misery on Bharti Airtel with the launch of a low-cost fixed broadband offering.

It’s no secret Reliance Jio is eyeing up the fixed broadband market, though Bharti Airtel executives thought they might have had a bit more time. According to the Economic Times, Reliance Jio has bought controlling stakes in Den Networks and Hathway Cable, giving it a ‘headstart’ on the potentially lucrative segment.

The worry regarding the fixed broadband market is the opportunity. This might sound like a daft thing to say, but the opportunity has been staring incumbents in the face for years. None have actually done anything about it. Like the mobile market prior to the chaos caused by Reliance Jio, it is slumbering due to inaction, but that might all be about to change. If Reliance Jio can carry the momentum from the mobile and value services segments into the broadband space as well, the misery could continue for market incumbents.

According to the lastest figures from the Telecom Regulatory Authority of India (TRAI),while mobile subscription is surging (and with still a lot of room for growth), the fixed broadband market is stagnent in most regions and actually shrinking in others. There are currently 22.2 million broadband subscriptions in the country, compared to roughly 250 million households. Just to put things in perspective, broadband would have to grow 50-fold to even come close to the same scale as mobile.

With the acquisitions of Den Networks and Hathway Cable, Reliance Jio has a starting point. It can begin to rollout its own branded service and undercutting the market in the same way it did for mobile. Over the coming months, expect to see the insurgent telco aggresively spending to expand this infrastructure. Details are thin on the ground at the moment, though the intentions were outlined in May at Light Reading Big Communications Event by Mathew Oommen, President of Reliance Jio Infocomm. Home and enterprise penetration is incredibly low; there are billions to be made for those who are willing to spend to capitalise on the opportunity.

For the traditional telcos in the market, inaction might prove to be the downfall once again. Reliance Jio has destroyed profits for challengers in mobile and the same gameplan could work for fixed broadband. With such low penetration, the opportunity has always been there, but if you are happy with the status quo you are nothing more than a sitting duck. The likes of Bharti Airtel have no-one but itself to blame for missing out on the potential cash bonanza.

One of the most tired phrases in the technology world is disrupt or be disrupted. It’s a cliche which people dread hearing, but it is incredibly true here.