Contrary to the earlier perception that 5G rollout by the new spectrum buyers will be mainly targeted at enterprise users, Reliance Jio Infocomm Ltd has declared its grand ambition to revolutionise the home broadband market in the country with 5G wireless services in the same way it upended the mobile data market with 4G services.
While the higher cost of fibre connectivity limited the scope of expansion of the home broadband market with 4G, Reliance Jio’s plan to use 5G as an alternative to fibre broadband in areas where it is unviable due to price sensitivity makes it more strategic.
“Jio’s extensive fibre-based offering, now supplemented by wireless home offering, will catapult India to leadership in home broadband services in the same way that Jio took India to global leadership in mobility services,” the company said while announcing its Rs 800-billion acquisition of 5G spectrum on Monday.
The newly acquired band of 26 GHz will be used to provide high-quality streaming services, besides addressing the enterprise market, the company said.
The problem, as far as home broadband is concerned, is less of price and more of infrastructure. Digging the ground to lay 100 or 200 metres of fibre for a connection that yields only Rs 300 or Rs 400 a month in a village or a small town is considered non-viable in telecom circles in India.
The cost of acquisition of a fibre customer in such a place runs into Rs 3,000-4,000, out of which only around Rs 1,000 can be reliably collected as an upfront payment from the customer, given the price sensitivity of the market.
However, 5G offers a way for Ambani to halve this as wireless networks are much cheaper to operate and maintain than wired networks.
