In the past few days, the news of Reliance Jio buying a substantial stake in the two most prominent cable companies of India, DEN Networks and Hathway cable have been circling the internet. It is no doubt that this buyout of the companies has positioned Reliance Jio much more advantageously as compared to its closest competitor Bharti Airtel when it comes to Direct to Home (DTH) services. It’s worth noting that after this move, Reliance Jio has gained direct access to 24 million subscribers of these two cable companies combined. Swiss brokerage firm, Credit Suisse also issued a note, which was spotted by ET clarifying that Reliance Jio GigaFiber will indeed be surpassing Bharti Airtel in terms of accessibility of customers after this buyout.
Reliance Jio Races Ahead of Airtel In DTH
Even before the rollout of services in the country, the Mukesh Ambani led telco has gained significant margin over Bharti Airtel in terms of reachability to the consumer. While Bharti Airtel has access to only 2 million homes across the nation, Reliance Jio now boasts of having access to 24 million subscribers owing to its recent buyout of DEN Networks and Hathway Cable. Reliance Jio has also opened registrations for its service since August 15 and has invested a total of Rs 5,230 crore in both of these companies. Although it’s evident that Airtel is not just going to sit back, and the telco has likely plans to strike back in the market, the major lead that Reliance Jio has over Bharti Airtel tells us that we will see many more homes adapt to Reliance Jio’s new GigaFiber service than Bharti Airtel. The challenge, right now, for the telco is to upgrade these subscribers from cable connections, or fixed line connections to FTTH service.
On the other hand, the Sunil Bharti Mittal led telco is not planning to remain mum. The telco plans to add 10 million more subscribers to its existing base by 2021 across 100 cities. In the year 2018 and 2019, Airtel will spend approximately Rs 24,000 crore only for its DTH business to expand operations rapidly.
Reliance Jio Will Have Better Offerings
Given that Reliance Jio is being backed by its massive subscriber base of 250 million Jio 4G customers, the telco is going to have the upper hand when it comes to striking deals with the content broadcasters. Also, Reliance Jio’s portfolio of content distribution applications like Jio Mags, Jio TV, Jio Cinema, Jio Music, Jio NewsPaper and Jio Cloud make it one of the most strong candidates for receiving the attention of content broadcasters. Further, Reliance Jio is likely to take the support of free services in the initial days as it did for Jio 4G to amass subscribers at a fast rate. Looking at all of these factors, Reliance Jio will stand ahead of Bharti Airtel when it is about service integrations and offerings. Further, ET’s report on Kotak Institutional Equities’s statement made it clear that it will be a tough climb for Airtel against Reliance Jio, however, TataSky is expected to have it much worse.