What Former Heads Of Reliance Jio, Airtel Think Of The Broadband Showdown
Former heads of telecom service providers said the spotlight has now shifted on customer experience.
As Mukesh Ambani extends the predatory pricing war into broadband services with the roll-out of Reliance JioFiber tariff plans, former heads of telecom service providers said the spotlight has now shifted on customer experience.
“Reliance Jio has very clearly chosen to play on customer experience than pricing,” said Sanjay Kapoor, former chief executive officer of Bharti Airtel Ltd. “The access [to broadband] will get cheaper as there is going to be a big battle between three to four players, with Bharti Airtel having a virtual monopoly so far.”
The Sunil Mittal-controlled operator has about 19 percent share in the broadband market, according to the latest data available with the Telecom Regulatory Authority of India.
Sandip Das, former CEO and managing director of Reliance Jio Infocomm Ltd., said the current strategy could be a “game-changer” as Reliance Jio’s foray into the telecom segment cannot be under-estimated. “If Reliance Jio’s experience doesn’t throw up the richness in content as offered its by rivals today, there will be a hesitation in adopting. But they [Reliance Jio] will make market corrections if such adoption is sluggish.”
The telecom operator owned by Asia’s richest man offered six plans to users in the range of Rs 699 to Rs 8,499. If customers opt for Reliance Jio’s annual subscription plan, they will get a broadband router, 4K set-top box, television set, first-day first-show movies and special sports content on selected plans and subscription to over-the-top apps—the details of which are yet to be announced.
Reliance Jio’s Advantage
Reliance Jio has an “upper-hand” as it has plans to offer fixed-line broadband services only through fiber cables, Kapoor said. Incumbents such as Bharti Airtel and Bharat Sanchar Nigam Ltd. still operate a large part of their connections through copper cable lines.
When you look at copper cables versus fiber cables, its almost the same game as 3G versus 4G connections. Fiber will win hands down as the experience through superior customer experience.
While aggressive pricing will be key to Reliance Jio cracking the broadband space, research firm Jefferies cautioned that the subscriber base in the fixed broadband space has remained largely stagnant due to expensive pricing and lack of focus and execution among incumbents.
The market is dominated by two state-run firms and has five major service providers.
Shares of parent Reliance Industries Ltd. rose for the first time in the week, gaining 1.6 percent. Bharti Airtel’s stock, too, gained 1.8 percent. That compares with a 0.71 percent gain in the benchmark NSE Nifty 50 Index.
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