JioFiber Bundled Broadband and TV Plans Could Turn Out Most Vulnerable for DTH Operators: Report

Reliance Jio’s bundled broadband services plans may leave DTH firms “most vulnerable”, and work out to be “neutral to slight negative” for Bharti Airtel, as it raises competitive heat in corporate and home internet space, a Bank of America Merrill Lynch report said on Tuesday. The view comes after Reliance Industries on Monday revealed its plans for fixed-line broadband services ‘JioFiber’ that will offer optical fibre-based ultra-high-speed internet bundled with HD television viewing at less than one-tenth of global rates.

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DTH Operators Could Be Most Vulnerable to JioFiber Bundled Plans

Bank of America Merrill Lynch said that direct-to-home (DTH) companies could be “most vulnerable” to Reliance Industries’ bundled broadband and cable services as they are unlikely to offer dual services. It did not anticipate a direct impact on broadcasters but said that indirect impact on subscription revenue could be felt if DTH/MSOs (multiple-system operator) revenue are affected.

“Long-term impact would be on ad spends if advertisers focus more on advertising on Over-The-Top (OTT) and spend more on producing quality content to compete with Amazon, Netflix etc.,” it said.

The report did not rule some pressure on Bharti’s broadband revenue triggered by Jio’s entry in the space. However, it said, the impact is likely to be limited as overall fixed broadband penetration remains low (at less than eight per cent) and large greenfield opportunities remain.

Bharti Airtel did not respond to an e-mail query on the issue.

Jio with over 340 million mobile subscribers has become the country’s largest operator in revenue terms within three years of launching its mobile services and now hopes to pull off the feat in fixed-line broadband services.