In late March, India’s largest telecom company Reliance Jio dropped a fresh broadband deal priced at Rs 198 (US$2.5). This data plan, which offers subscribers unlimited data at 10 Mbps, was not a run-of-the-mill announcement. The move was designed to coincide with the 16th edition of the Indian Premier League (IPL), the highly anticipated annual T20 franchise cricket tournament.
By undercutting the previous minimum price of Rs 399 (US$5) and introducing JioCinema as the IPL host—offering free streaming free streaming The Ken JioCinema’s $2.7B gamble to stream IPL for free has advertisers worried Read more for all–Jio was pulling out all the stops.
With an expected half-a-billion viewership over the next 60 days, Jio wanted to win over Indian households. The results were to be seen soon. “Students, hostels, shop owners are opting for this plan,” an executive with a rival internet-service provider (ISP), based in the northern Indian city of Varanasi, told The Ken.
Then, in a bold response, Bharti Airtel—Jio’s rival-in-chief—introduced a similar plan priced at Rs 219 ($2.7).
This Jio-Airtel skirmish is just the war drum to a much larger, bloodied battle between the titans. At stake is the crown of the go-to service provider for not only broadband but also a suite of entertainment, gaming, and home-surveillance services.
The battle lines have been drawn, and the gloves are off.
Jio’s initial strategy is to scrape the bottom of the barrel, said Vivekanand Subbaraman, senior analyst, Ambit, a Mumbai-based brokerage firm. Rival telcos, too, are primarily focused on expanding the subscriber base; a tariff correction may follow later.
Telcos—Jio in particular—seem to be harbouring ambitions to go beyond connectivity services and wield control over content and content distribution in the next five to seven years. It’s an outturn of the industry witnessing a gradual shift in customer segmentation.
Historically, telcos have targeted retail customers and lucrative enterprise clients. However, the Covid-19 pandemic introduced a fresh cohort: home-internet subscribers. At present, India has 32 million households with a fixed-broadband connection. And the telcos are fighting to capture the lion’s share of the wallets of such subscribers.
Unlike their retail counterparts, these home subscribers offer a potential average revenue per user (Arpu) of over Rs 1,000 (~US$12). For contrast, Bharti’s average revenue per account from the home segment currently stands stands Bharti Airtel Investor presentation Read more at Rs 650.
