Jio plans to do to satellite what it did to mobile – disrupt cost structures

cost structures satellite
Image by naratrip | Bigstockphoto

Reliance Jio said that it is aiming to crack India’s satellite-based communications market by disrupting satellite cost structures, underlining its strategy to emerge as a formidable player in the segment.

Jio is seeking to disrupt not only terminal costs, but also the raw satellite capacity cost per MHz of bandwidth as it has done in mobile telephony in the country.

Reliance Jio president Mathew Oommen said that before Jio arrived on the mobile scene, the cost per GB was Rs250. That dropped drastically after Jio launched its all-IP 4G network. Meanwhile, Oommen added, Jio’s entry also resulted in prices falling to the lowest in the world, and India is now the largest data consumer in the world.

Oommen suggested that a similar model can be replicated in satellite-based communications as well.

He also asserted that India must auction satellite spectrum rather than simply handing it to them.

“The dearth of spectrum that we have in India should be factored in. Let us (India) lead from the front in satellite and in spectrum transformation rather than stating just because it was allocated for 30 years or 15 years, we should continue that process … it is something that I’m finding it difficult to comprehend, because I sincerely believe it is not right for India,” he was quoted as saying by the Economic Times.

Earlier this week, OneWeb and Bharti chairman Sunil Mittal said satellite spectrum has never been auctioned anywhere in the world, and doing so would end any chance of satellite broadband services in India because no one would bid for the spectrum.

Oommen disagreed, saying that just because such spectrum has not been auctioned ever didn’t mean that this should contimue to be the norm going forward. 

Jio recently announced a joint venture with Luxembourg’s SES to offer satellite-based services to deliver “affordable connectivity”.

“We are looking forward to working with SES in disrupting the cost structures by leveraging our technology along with SES’ technology to deliver that affordable connectivity, which will translate into that rich experience,” Oommen told the publication.

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