Mukesh Ambani’s on September 5 announced the much-awaited JioFiber, the fiber-to-home (FTH) service in 1,600 cities across the country. The company has bundled the broadband service fiber TV, postpaid mobile services and free landline calling. With the entry in postpaid, broadband, landline and Direct to Home service, Reliance Jio’s war with Airtel has intensified and diversified. Sunil Mittal led Bharti Airtel is the only company which has a major presence in all the sectors Reliance Jio aims to disrupt.
JioFiber aims to reach to 2 crore customers in the next 12 months. Its plans range from 699 rupees per month- for the most basic services to 8,499 rupees per month- highest end which includes free 4k TV. “The launch of JioFiber with its revolutionary services is just the beginning of a new and exciting journey,” said Akash Ambani, Director, Reliance Jio Infocomm.
Airtel is carrying out major overhaul in the packaging of services to take on Jio. It launched a new hardware Xstream box and Xstream smart stick and renamed Airtel TV app as Airtel Xstream. Its plans start from 799 rupees per month for basic services to 1,999 rupees per month which includes Over The Top (OTT) services supported by Xstream box.
Airtel is a major player in the more lucrative postpaid market. The postpaid users constitute merely 5 per cent of total users but contribute 25 per cent in revenue. Most of the postpaid users are from the upper strata of society and are more concerned about services than the cost of the subscription.
“Jio remains hungry for customers and revenue share, and having dominated the prepaid platform, it will try to replicate that success in the postpaid segment and also leverage its upcoming enterprise offerings to further boost postpaid business gains,” said Rohan Dhamija, Partner & Head of India & Middle East, Analysys Mason.
Airtel digital TV is the third-largest player in Direct to Home service after Dish TV and Tata Sky. It controls more than 20 per cent market share of paid direct-to-home service. With the entry of Jio, all the players direct to home service face a major threat. The shares of Dish TV fell by 12 per cent since Ambani unveiled plan to enter in the market.
In the broadband market, Bharti Airtel is the second largest players after BSNL (91.7 lakh) with 22.7 lakh customers. Given the fact, Reliance Jio’s major focus in on the broadband market, the existing players like BSNL and Airtel have to give it all to survive. Otherwise, Reliance Jio will succeed in monopolizing the market.
Mukesh Ambani is known to work towards a monopoly in the markets, a style similar to his father’s. In the early days of the business, his father monopolized the thread-making business, and now he is doing the same in the telecommunication market. Friends and rivals use two words to describe Mukesh: obsessive and ruthless.
The entry of Mukesh Ambani-led Jio forced many small players out of business and the merger of Vodafone and Idea, two of the largest independent telecom operators. The data tariff rate in India is the lowest in the world, all credits to Mukesh Ambani. Since his company entered the market with a 1GB free data and unlimited free calling package throughout India, the prices of calling and data services have crashed. The existing players like Vodafone and Airtel have been forced to cut the rates in fear of being thrown out of the market.
