JioGigaFiber effect: Airtel comes up with different broadband strategy

Despite the fact Mukesh Ambani-owned Reliance Jio has aggressive plans for its JioGigaFiber, India's leading telecom player Bharti Airtel will only focus on premium customers in the top 100 cities, Mint reported.

"Airtel's plan is clear...to stay focused on the top 100 cities... stay focused on the high income, stay focused on high-rise buildings rather than horizontal deployment, as this business model is more economical and logical," Mint quoted a person aware of the matter.

Meanwhile, the report said that the commercial launch of Reliance Jio GigaFiber is all set to disrupt the sector in a similar way it disrupted the telecom space.

Furthermore, Jio has already started work on connecting 50 million homes across 1,100 cities and it plans to work together with Hathway and DEN to offer a quick and affordable upgrade to a world-class line-up of JioGigaFiber.

For those who are not aware research firm India Ratings estimates that at the current monthly broadband tariff of Rs.500 to Rs.600 per household, the potential market size for 50 million households could be Rs. 300 billion to Rs.360 billion, a significant portion of which could be tapped by RJio. New service offerings in the enterprise broadband segment could provide additional market opportunities.

The impact of RJio's entry in the broadband and cable business would be varied across MSOs and DTH players based on (a) their geographical diversity with regard to subscribers, (b) the relative attractiveness of the market (e.g. densely populated cities with a large number of multi-story buildings and (c) current tariffs and service offerings.

During FY19-FY20, high-density markets are likely to witness stiff competition, as the overall ecosystem is already in place for RJio to start providing its offerings. Regional players operating in third- and fourth-tier towns may not be an immediate competition threat, albeit long-term risk beyond FY20 remains.