Mukesh Ambani-led telecom operator Reliance Jio is sweetening the content offering for its fiber-to-the-home customers in India with the launch of Jio TV+ service, which will now aggregate content from over 12 global OTT providers, including Amazon Prime, Netflix, Disney Hotstar.
The move is being seen as the major push to the company’s JioFiber service, which comes bundled with smart set-top-box (STB). The telco is offering a triple-play service –telephony, broadband, and video – through its JioFiber service.
As part of the service, Jio will offer Live TV channels, shows, and movies from various other apps and services.
Media reports suggest that Reliance Jio through its Jio TV+ will offer deep discounts of 50-75% on the monthly subscription price from some of the global OTT content players. This will be done by offering massive minimum guarantees (MG) to their services for the first three years.
“The subscriber acquisition cost comes to around 20-25% for new customers. Jio came with huge MG, including one million users in the first year, 4-5 million in second, and close to 20 million in third. Standalone, many of the long tail players will never be able to reach that number, so they agreed to take a price cut,” a senior OTT executive who was involved in negotiations with Jio was quoted as saying by the Economic Times.
Jio TV+ comes with a unified interface to allow users to search content across different OTT apps based, which experts believe will appeal more subscribers to opt for the service.
Analysts suggest that JioFiber is one of the five growth accelerators for Jio Platforms’ digital connectivity in India. The other four accelerators are mobile broadband, Enterprise Broadband, Broadband for SMEs and Narrowband Internet-of-Things or NBIoT.
The telecom operator has claimed to have connected over 1 million homes with its fiber-to-the-home broadband service, and is now looking to aggressively add more customers with the help of its content offering. It aims to connect over 50 million homes and business establishments through JioFiber.
India is an under-penetrated wired market for both telephony and broadband. Fixed broadband penetration in India is currently very low at 6.1%, and this can easily more than double in the next few years.
Comparatively, China has a fixed broadband penetration of 86%.
In India, fixed broadband subscribers have grown at a CAGR of 4% to 19 million against mobile broadband subscriber growth of 53.9% to 606 million in the past six years. Fixed broadband penetration (% of households) is just 6.1% as compared to 80-95% for many developed countries, ICICI Securities said.
ICICI Securities, in its research report, said that fixed broadband can be a winner in the evolving post-COVID world and will benefit from work-from-home (WFH) culture. “Fixed broadband, which today is considered an alternate entertainment medium, would turn into utility.”
One of the main reasons behind the low penetration of fixed broadband is the cost of mobile data, which the lowest in the world. “In India, subscribers use mobile data to access all content on the internet due to generous allocation of 45GB a month in base packs; and fixed broadband is considered an alternate entertainment medium,” ICICI Securities said.