Mukesh Ambani’s JioFiber to bite MTNL, BSNL; customers may move to Jio

Mukesh Ambani’s JioFiber is out now and the ambitious broadband network is likely to sway customers of PSU telecom firms MTNL and BSNL away. “There could be a churn, especially for customers who are paying in the range of Rs 500-600 a month,” Nitin Soni, director at Fitch Ratings, said in an interview to CNBC TV18. While Reliance Jio’s starting plan may not be disruptive, the company is focusing more on average revenue per user and consumer stickiness, he added. Nonetheless, Reliance Jio offer is very lucrative and will be a gamechanger in India’s broadcast services.

In India, BSNL with over 9 million users, Bharti Airtel with over 2 million users, Atria Convergence Technologies (1.45 million), Hathway Cable & Datacom (0.84 million) and MTNL (0.74 million) are the top five wired broadband service providers, according to TRAI’s latest report on Telecom Subscription Data. Further, top five Wireless Broadband Service providers were Reliance Jio Infocomm Ltd with about 331 million users, Bharti Airtel with 119.09 million, Vodafone Idea (110.50 million), BSNL (12.87 million) and Tata Teleservices (1.40 million), according to the same report.

However, this time, “Reliance Jio seems to be targeting higher, denser broadband coverage,” Rajiv Sharma, Co-head, Institutional Equity Research, SBICAP Securities, told CNBC TV-18. JioFiber is launched in 1,600 Indian cities.

While Reliance Jio has already disrupted the domestic telecom services, leaving behind the erstwhile dominant players including Bharti Airtel and Vodafone-Idea, the company’s JioFiber services are also likely to bring revolution in India’s internet services. JioFiber launch was announced by RIL chairman Mukesh Ambani, on the same day as the company’s Annual General Met. JioFiber is offering a plethora of services such as high-speed broadband, free domestic video calling, TV-video calling, entertainment OTT apps and freebies like 4k televisions to annual subscribers. Reliance Jio launched the service on 5 September 2019, coinciding with the company’s 3rd year anniversary.

Bharat Sanchar Nigam Limited (BSNL)