A few months ago, Reliance Industries Limited (RIL)—India’s most valued firm—had a big announcement to make. The veil was lifted off RIL chief Mukesh Ambani’s ambitious project—JioFiber broadband.
Announced at RIL’s August 2019 Annual General Meeting, a public showcase for the company, JioFiber came with a never-before 2X growth promise—to add 36 million subscribers when the total number of wired broadband subscribers in India was 18 million. (We wrote about JioFiber when it was rolled out.)
With 15 million registrations even before it unveiled tariffs in August, Jio sold this dream the way it knows best. With freebies. Free TVs, bluetooth speakers, the works.
Except, broadband is no easy business. And freebies aren’t a solution. Five months into the commercial launch of JioFiber, the company realises that switching from wireless to wired is no mean feat, as confirmed by various executives who spoke to The Ken. They requested anonymity for various reasons—while some aren’t authorised to speak with the media, others feared losing their jobs. Jio has not responded to a detailed questionnaire sent by The Ken.
“There are not a lot of interested buyers, the sales have come mostly by push from sales guys,” said a Jio executive from Kerala. “There have been a lot of cases where sales guys had to tell sob stories to sell and had to visit a house 10-15 times to push sales.” Jio’s ambitious sales targets are not easy to hit as the company has not shown much aggressiveness when it comes to pricing. JioFiber’s tariff starts at Rs 699 ($9.83) and goes upto Rs 8,000 ($112.5) per month, and the plans do not differ much when you compare it with competitors.
Many of the 15 million people who signed up early haven’t gotten the service. Some even backed out because they expected a free service like Jio mobile, or because the cable service never reached their homes.
While the 36 million goal comes without a promised time frame, Jio needs to top up at least 300,000 customers per month to reach anywhere near it in the next decade. Two of the biggest broadband service providers, state-owned BSNL and Sunil Mittal-led Bharti Airtel, took over 15 years to reach their respective subscriber bases of 8.51 million and 2.41 million, respectively. While Jio had an initial cohort of 500,000 customers from its one-year-old free trial run, and added close to 123,000 customers in October 2019, the month of November saw a sharp decline with sales dropping to just 43,000. The sales figures for December and January are not out yet. Meanwhile, in the month of November, Airtel added 7,793 customers, while Vodafone Idea added around 5810 customers. While Jio is clearly outperforming its rivals, their subscriber addition is nowhere close to seeing its Chairman’s vision to come true and justify the huge investment it has made.