Airtel Creates Fiber Subsidiary, Jio Giga Fiber Looking for Major Disruption in the Market

The next phase of Indian telecom war lands as Jio is not abating its plan of disruption with the announcement of Giga Fiber - the fiber to home broadband connectivity on 15th of August, 2018. Immediate effect went on Den Networks, Hathway Cable and Datacom - whose shares went down by upto 18% post announcement of Jio's Giga Fiber. Another big fiber player in the country, ACT Broadband has revised their broadband plans with more data on most of the plans. Delhi-NCR based pure play fiber player, Spectra is all set to do the same. 

As Jio goes direct to home with fiber, it will make toughest competition against existing fiber/cable based broadband operators as well as DTH service providers. With the power of fiber at last mile, Jio will offer broadband, TV and other infotainment packages at a great competitive package to hurt the other players. A similar quad play package - a trend has already been practiced by Verizon in US and Vodafone in different countries. 

Like its previous entry into mobile space, Jio's Giga Fiber will have a preview offer - buy the device at Rs 4500 and you will get 100GB data per month for 3 months at the speed of 100Mbps to 1Gbps. Not only that you will get top ups of 40GB free of cost during that period, as well as free subscription to GigaTV, other infotainment services and smart home solutions. As told by Mukesh Ambani at 41st AGM of the company, '' Jio Gigafiber will be the largest greenfield fixed-line broadband rollout anywhere in the world, with rollout happening in 1,100 cities of India simultaneously.''

With very low latency Giga Fiber would be the automatic choice for online gamers too. Launched in 2015 Nvidia GeForce Now recommends 50Mbps for full-HD 60fps gaming, and 25Mbps for HD 60fps, and over 10Mbps for HD 30fps. But as the nearest server stands at Europe you need continuous great speed otherwise you will find undersirable lag duiring gaming. 

Already cloud based gaming services are a reality in India - Nvidia GeForce Now and Vortex has been launched and you can play Assassin’s Creed, Arma 3, Borderlands 2, Call of Duty, Counter Strike, Dota, F1 2017, PUBG and many more at Rs 690 per month on Vortex, while Geforce Now is in beta phase and invite based. 

Airtel, who got hurt by Jio's entry into mobile voice and data business, has now got a new big competitor - the merged Vodafone-Idea group. The merged entity, as it is to be called Vodafone Idea Ltd has its own good grip on fiber space with You Broadband, which was acquired by Vodafone in April 2016. Airtel is operating its fiber optic based broadband under V-Fiber branding. 

Airtel is not sitting idle - they revamped their subsidiary Telesonic Networks Ltd which was founded in 2009. Now Telesonic will turn into a optic fiber infra provider company and Abhay Savargaonkar will head it as CEO. 

Regarding the new development on Telesonic, Gopal Mittal, CEO of Airtel (India and South Asia) said, “Given the significant growth in data consumption in recent years, we believe a robust and independent infrastructure company that serves the growing need of fibre in the telecom industry is critical,” This development will help Airtel to cut down CAPEX as well as they will earn revenue by leasing out the OFC network to other providers.

In mobile space Jio made voice calls to be virtually free and high speed data price goes at 200% cut, I am expecting similar severe disruption at broadband market too. BSNL, the leader of wired broadband market can have the worst time in coming days with their foolish unpreparedness. While smaller regional players with good customer rapport can survive with wide array of services other than simple internet as well as revising the tariffs.

Spectra, earlier known as SpectraNet has fiber broadband in Delhi-NCR region.

However many analysts believe in longer timeframe, say in 2-3 years the fixed broadband market will see many acquisitions and consolidations like in telecom market. 

“In the next two to three years, I certainly see fewer players in the (broadband) market. In a sense, the broadband market will mirror the trend seen in the telecom market, which Jio entered two years ago, bringing about consolidation. But the good news is that the overall market will expand in terms of number of (broadband) users. That is exciting,” S N Sharma, chief executive officer, DEN Networks, said. 

Presently in India has more than 300 internet service providers (ISP) listed on TRAI website. Many of them are very smaller player - with a market of selected neighberhoods of a metro, while some are spread over a metro or tier II cities. But these players being smaller can be a customer's friend in terms of services as well as on affordable tariff plans. These players have quite good cable reaching last mile and good fiber under main roads. They are can be easily targeted by larger players like Spectra, ACT, Hathway, DEN and others. 

Anyway the fixed broadband in the country is gonna be fixed for sure ! 

Telecom infra and equipment providers are quite happy as the investment on fiber will open up many opportunities for them. In an interview to Economics Times, Sam Bucci, the head of optical networks for Nokia shares his excitement, “India is at the start of the cycle of building of fiberizing broadband for the purposes of delivering broadband to the home. We do see that pace quickening, and as a market, the growth of residential broadband in India will probably outpace the other markets simply because of where you are in the cycle, in the growth cycle,”