Jio Fibre to Home offering unlimited broadband net with 100Mbps speed

The Mukesh Ambani-owned telecom operator is currently running trials at select locations and is expected to launch the services by the end of this year

In a speech made at Reliance Industries' annual general meeting last year, Chairman Mukesh Ambani had indicated that the group's telecom venture, Reliance Jio Infocomm, was on track to offer Jio Fibre to Home services and it would be the company’s next big monetisation opportunity. Now, according to a news report in Livemint, the telecom operator is expected to launch the wired fibre-to-the-home (FTTH) broadband services by the end of this year.

Earlier last year, Reliance Jio had started testing the wired broadband services in select cities. In beta trials, the company has been offering unlimited internet data at 100Mbps speed at a security deposit of Rs 4,500. The company has also been providing a special router, which connects multiple devices, with a multi-service operator (MSO) licence in place to offer TV services.

According to an earlier report in Business Standard, Jio has been planning to leverage technology to resolve some of the problems of FTTH. For instance, it’s likely to use power-line communicators -- a small plug-and-play device that extends the strong WiFi signal to rooms far away from the router. While FTTH can get problematic in large homes and offices, and Jio has been working on a strategy to use the existing electric wiring to transmit data and TV signals across the house.

Though nothing has been officially confirmed, the wired broadband services from Jio are expected to launch with a preview offer – similar to how the company launched its Jio services -- with free access to JioFiber services for 90 days. Under the complimentary offer, the JioFibre broadband services might offer a broadband speed of up to 100 Mbps, besides free access to Jio premium applications and television services.

Reliance Jio’s competitor Bharti Airtel recently announced a new 300 Mbps FTTH broadband plan at a monthly rental of Rs 2,199. The new plan comes with up to 1200 GB of data, along with free unlimited local and STD calls. The new plan comes bundled with a free subscription to Airtel’s OTT apps -- Wynk Music and Airtel TV.

As a promotional offer, Airtel is also offering a one-year free subscription to Amazon Prime Videos and 1,000 GB of additional data per month valid until October 2018. The broadband plan comes with a data rollover facility, which allows users to carry forward unused data to the next billing cycle.

ALSO READ: Airtel to bring 300Mbps FTTH broadband plan with 1200 GB data: Details here

Reliance to invest Rs 600 bn in Jio this year, may borrow Rs 1 trn more

Subscriber additions, while suppressing incumbent telecom operators, will continue to remain top priority, say analysts

Mukesh Ambani-led Reliance Industries Ltd (RIL) is likely to invest another Rs 600 billion this year in its telecom business Reliance Jio Infocomm with an emphasis on faster rollout of broadband services and wireless expansion, Livemint reported, quoting anonymous company sources.

The sources have also been quoted as saying that Reliance Jio might borrow up to Rs 1 trillion in addition to the above-mentioned investment. Jio and RIL spokespersons did not comment on queries about the investment.

“Management made it very clear that their focus in the near term is to retain and grow their subscriber base and they would respond to market pricing. Essentially the implication was that incumbents would need to raise tariffs, but this would effectively lead to loss of market share for incumbents as JIO would offer the best 'value' to subscribers and hence continue to see large subscriber additions,” noted JP Morgan in their recent report on RIL.

The report further stated that JIO is expected to launch its broadband business with a pricing strategy similar to that of its telecom arm, given its focus is on creating a new market.

While JIO’s average revenue per user (ARPU) fell to Rs 137 from Rs 154 in the last quarter of 2017-18, it still remains better than that of Airtel and Idea cellular. JIO also managed to add almost 9 million subscribers during the quarter.

“Jio is expected to remain aggressive to gain market share, which could keep industry revenue under pressure and return ratios of incumbents suppressed,” noted an India Equity Research in a report on Monday.

JioFiber, the wired broadband arm, has started offering what they claim to be 'ultra-high-speed' fibre to home (FTTH) broadband connections with 1.1 terabytes (TB) of free data at speeds of 100 megabits per second (mbps) in select markets in the country already. However, commercial services are likely to be rolled out in the second-half of the year.

The company currently claims more than 300,000 km of optical fibre network in the country and the company is expected to target over 100 million households across the country with the service.

RCom: Will the monetisation plan work?

RCom has also talked about monetising its real estate but that is easier said than done

Anil-Ambani led Reliance Communications' offer to lenders to take control of the company by converting Rs 7,100 crore of its debt into a 51 per cent equity stake is perhaps the telecom major's best bet. If the latest rescue attempt goes through, lenders led by SBI will hold at least 51 per cent in the telco and promoters stake will be halved to around 26 per cent.

RCom has said it will get about Rs 17,000 crore by monetising its assets. The plan includes selling its tower business, fibre network, and media convergence nodes and it will estimates another Rs 10,000 crore through real estate sales in eight cities. Post debt monetisation, the company said it would have only Rs 6,000 crore of debt left. Moreover, another Rs 4,000 crore taken from unsecured creditors like Ericsson needs to be negotiated with.

So how prudent is this monetisation plan?*

Under its earlier plan, RCom had said it would cut its debt by half by December through a merger with Aircel and sale of majority stake in its tower business to Canada-based investment firm Brookfield Infrastructure for Rs 11,000 crore, valuing the business at Rs 20,000 crore. However, now that the Aircel deal is off and RCom shutting down its 2G business, which constitutes for a bulk of its subscribers, the deal valuation is likely to be revised downwards. In essence, the telecom tower deal is subject to a new valuation given that Aircel’s tenancies will not be included in the deal anymore. Moreover, RCom now runs the risk of losing at least half of its 2G subscribers.

Also Read : New Year disruption plan: Now, Reliance Jio moves to broadband, TV space

Analysts say that even if RCom sells the entire 100 per cent stake in its 43,600 tower assets to Brookfield it will not fetch them more than Rs 8,000 crore.

RCom is hoping that it will be able to rake in Rs 14,000 crore from its spectrum sale though the value of the spectrum is Rs 26,000 crore, which includes spectrum it got from the merger of MTS. However, analysts are of the view that there is already a huge oversupply of spectrum, and that the paper price might not be reflected in reality. RCom may also not find many takers for its spectrum given how things went down with Telenor and TTSL which gave their spectrum virtually free to Bharti Airtel. (more)