Last week, Reliance announced pricing plans for Jio, its new broadband service, ahead of commercial launch January 1 2017.
According to MPA analysts, Reliance Jio services will be more disruptive for incumbent telco voice revenues rather than their data businesses.
Jio’s base pack, at Rs149 (US$2.2) for 28 days, does not appear to have a mass proposition.
Although the plan offers 300 MB worth of data, Arpu comes at a premium to the industry average.
Moreover, most new subscribers will have to buy new phones, as more than 90% of handsets in India are unable to access 4G.
Jio’s Rs499 4GB pack however, next up in terms of pricing, targets major data users.
The effective price for this offer comes in at Rs125 per GB, although Jio claims a lower Rs50 per GB price when WiFi access is included.
Impact On Broadband
Nonetheless, India’s data market looks set to expand meaningfully, with free data in the near term from Jio and cheaper data from the entire industry. Currently around 200-250 million mobile subscriptions in India use data services.
Mass commercial launch for Reliance Jio’s fixed broadband services, meanwhile, are at least six to nine months away.
Unlike the key incumbents Airtel, Vodafone and Idea, Jio does not have 3G or 2G networks to rely on.
As a result, it will take a few months for its mobile network to stabilize. Fiber allocation, to roll out FTTH services, will only follow once this occurs.
Impact On Pay-TV
Reliance is also offering free access to its content apps up for its 4G subs until the end of 2017. This includes live TV service, Jio Play, which offers over 300 channels (40 in HD) from India’s biggest broadcasters, including the likes of Star and Zee.
The company is also talking to international content and OTT operators to integrate and further strengthen its offering for Jio Play.
Nonetheless, Jio’s current pricing – combined with additional purchases for handsets, as well as dongles that can stream video onto TV sets – still makes it a relatively costly form of entertainment for many Indians, at least in the medium term.