Reliance Jio Phase 2.0 Disruption

In last three years, Jio has disrupted mobile services, Cable TV services and mobile handset industry and in the second phase, the plan is to disrupt broadband services, DTH services, cloud services and TV brands

Reliance Jio is the biggest disruptor in the market. In the past, the company has disrupted mobile services, cable TV services and mobile handset industry in a big way and in the second phase, the focus is on broadband services, DTH services, cloud services and TV industry. Let’s look at how Reliance Jio will disrupt these industries and its likely impact in the market. 

Broadband Services: Reliance Jio is planning to provide JioFiber plans priced between Rs. 700 to Rs. 10,000 per month depending upon individuals requirement. The Rs. 700 plan starts with 100 Mbps speed, free voice calls from fixed line to any Indian operators and bundled with subscriptions to most leading premium OTT applications. All this will be a win-win for broadband consumers as they will get assured bandwidth as well as premium content at affordable prices. BSNL, MTNL, Bharti Airtel, Atria Convergence and Hathway will be the biggest loser with the commercial launch of JioFiber.    

India’s Wireline Market Share (as on May 31, 2019)  

BSNL – 50.46%

Bharti Airtel – 19.99%

MTNL – 15.14%

Tata Teleservices – 8.55%

Others – 5.86%   

Source: TRAI  

Top 5 Wired Broadband Service Providers (as on May 31, 2019) 

BSNL – 9.09 mn 

Bharti Airtel – 2.39 mn 

Atria Convergence – 1.44 mn 

Hathaway Cable & Datacom – 0.83 mn 

MTNL – 0.75 mn  

Source: TRAI  

DTH Services: The company is planning to launch JioFiber on September 5, 2019 and is planning to partner LCOs (local cable operator) for providing broadcast TV business. The company is planning to launch JIO-FOREVER Plans where one will get HD or 4K LED TV and 4K Set Top Box (STB) absolutely free and this is going to be a game changer for broadcast industry consumers. Dish TV, Tata Sky, Bharti Airtel and Sun Direct will be the biggest loser with the coming of Reliance Jio in broadcast TV business.     

India’s DTH Market Share: 

DishTV – 40%

Tata Sky – 25%

Bharti Airtel – 22%

Sun Direct – 12%

Reliance – 1%

Source: TRAI The Indian Telecom Services Performance Indicators (Oct – Dec 2018)    

Reliance Jio Phase 2.0 Disruption:

Broadband Services: BSNL, Bharti Airtel, Atria Convergence and Hathway will be the biggest loser 

DTH Services: Dish TV, Tata Sky, Bharti Airtel and Sun Direct will be the biggest loser 

Cloud Services: Amazon Web Services (AWS) and Google will be the biggest loser   

TV Industry: Indian brands like Micromax, VU & Sansui and low end foreign brands will be the biggest loser 

Source: DigiAnalysys

Cloud Services: Google and Amazon Web Services are presently strong in the Indian market for all categories of customers – SMB, startups and large enterprises. Initially, Reliance Jio with its partnership with Microsoft is targeting startups and SMBs in big way. Jio has also announced that it will provide connectivity and cloud infrastructure absolutely free for budding startups. For SMBs, the cost for connectivity, productivity and automation tools will start at Rs. 1,500 per month which includes unlimited enterprise grade voice and data services, video conferencing, security solutions, marketing & sales solutions and many more productivity tools. The biggest loser in cloud services will be Amazon Webs Services (AWS) and Google.     

TV Industry: Reliance Jio is planning to launch JIO-FOREVER Plans where one will get HD or 4K LED TV and 4K Set Top Box absolutely free. This will be a game changer for TV industry as the consumers will get connectivity, TV and content by just paying a monthly fees. In this case, Indian brands like Micromax, VU & Sansui and low end foreign brands will be the biggest loser as the company will also launch TV catering to bundled solution. 

The launch of broadband and cloud services by Reliance Jio on September 5, 2019 will not only help in accruing additional revenue for the company but also help the company to increase its EBITDA which is presently at 40%. Not only this, Mukesh Ambani is banking a lot on consumer business i.e. Reliance Retail and Reliance Jio as in future the two will contribute around 50 percent of the group EBITDA from present 32 percent.     

           

 

 

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