Observed Policies/Schemes

Did We Hear Free TVs? Check Out Reliance’s New Service Scheme!

Reliance
Reliance

3 years after nudge into the Indian wireless phone market with free calls and data, billionaire Mukesh Ambani is back at it.

This time, Asia’s richest man is delivering TVs to catch users on movies and entertainment shows via the internet. He’s trying to expand business in the world’s second-most crowded country where companies from mobile carriers to Netflix and Amazon are touching heads to offer content.

Mr. Ambani’s JioFiber broadband service, going to start from Thursday across India, appears with high-definition television and set-top boxes with zero cost for annual lifetime subscribers. 

The offer by Reliance Jio Infocomm, the tycoon’s wireless powerhouse, covers subscriptions to most premium streaming services with starting prices of 700 Rs (about $10) for a month.

The fiber-TV salvo begins days after Jio formally swept into the No. 1 spot for wireless services after free calls and cheap data attracted hundreds of millions of subscribers and left opponents Bharti Airtel and Vodafone Idea struggling under mounting debt. Airtel, upheld by tycoon Sunil Mittal, and billionaire Kumar Mangalam Birla’s Idea are also trying to attract users by offering access to TV and movie content.

According to researcher Boston Consulting Group, Country’s video-on-demand market could expand from $500 million last year to $5 billion by 2023. 

The potential for growth is stoking an intensive game among Bollywood production houses, carriers, and streaming services. Paying subscribers will grow to as many as 5 crores, while users of advertising-supported video-on-demand will strike 60 crores, BCG predicts.

The Services development with the fiber broadband network by Reliance Jio is also part of Mr. Ambani’s ambitions to govern the consumer market as he turns from energy and petrochemicals to develop an e-commerce business competing Amazon.

Shailesh Kapoor, founder and chief executive officer at Mumbai-based consultancy Ormax Media said, to get the upper hand in the streaming business against well-funded competitors like Netflix, Amazon and Walt Disney Co.’s Hotstar, Jio will require to go beyond just offering more economical access via bundled services.

On August 12, Mr.Ambani said in a speech laying out the plan that Until now, the telecommunications company has relied on alliances with TV and film producers to provide content for its service packages. JioFiber will also include movies that can be seen by subscribers on the same day they debut in cinemas. 

He also added that part of the service wouldn’t start until the middle of next year.

JioFiber, which Mr. Ambani stated is being offered at “less than one-tenth the global rates,” can also disrupt the so-called over-the-top, or OTT players — those who stream media via internet like Netflix -if Jio produces its content and signs up the best talent for that, Mr. Kapoor said.

Airtel, the brand name for Mr. Mittal’s carrier, may take the most direct competing hit from JioFiber because, along with content packages for its mobile services, it is one of the country’s largest TV service providers. The company’s digital TV segment estimated for approximately 12 % of earnings for the year ended March, data accumulated by Bloomberg show.

In a possible effort to get ahead of JioFiber’s formal introduction, On Tuesday Airtel revealed upgraded variants of its set-top box and the Airtel Xstream Stick, a USB device that allows an ordinary television to access OTT applications like Netflix, Amazon Prime Video and YouTube, accompanying with Airtel’s other content offerings.

Satellite providers such as Tata Sky and Dish TV India as well as cinema chains also face competition from Jio, which will offer fiber TV in bundles with its mobile services and free landline calls.

Shares of Dish TV have fallen 8.2 % since Mr. Ambani revealed the plans, compared with a 2.3 % drop in the benchmark S&P BSE Sensex index. INOX Leisure, a movie-hall chain, has slipped 7.2 %.

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