Three years after the wireless phone came to market with free calls and data, billionaire Mukesh Ambani is back.
At this time, Asia’s richest man is handing out TV via Internet to hook users on movies and entertainment shows. The tycoon is promising to do business with players from rival mobile carriers with Netflix Inc. and Amazon.com Inc.
Ambani’s JioFiber broadband service, starting Thursday across India, comes with a high-definition television and set-top box for annual lifetime subscribers at no charge. Reliance Jio Infocomm Limited, the tycoon’s wireless powerhouse offering, includes subscriptions to most premium streaming services, starting at Rs 700 per month.
The fiber-TV salvo comes days after Jio formally swept into the No. 1 spot for wireless services after free calls and cheap data lured hundreds of millions of subscribers and left rivals Bharti Airtel Ltd. and Vodafone Idea Ltd. struggling under mounting debt. Airtel, backed by tycoon Sunil Mittal, and billionaire Kumar Mangalam Birla’s Idea are also trying to lure users by offering access to TV and movie content.
Telecom carriers around the world are adding entertainment content to their offerings as a way to compete for users and add revenue, especially in markets where the number of mobile subscriptions has reached saturation. In India, video-on-demand growth itself is explosive, according to researcher Boston Consulting Group.
The market could leap to $5 billion by 2023 from $500 million last year, BCG estimates. The boom has set Bollywood production houses, carriers and streaming services racing to feed demand for TV shows and movies and compete for users. Paying subscribers will probably rise to as many as 50 million, while users of advertising-supported video-on-demand will reach 600 million, BCG predicts.
To gain the upper hand in the streaming business against well-funded competitors like Netflix, Amazon.com and Walt Disney Co.’s Hotstar, Jio will need to go beyond just offering cheaper access via bundled services, said Shailesh Kapoor, founder and chief executive officer at Mumbai-based consultancy Ormax Media Pvt.
So far, the telecommunications company has relied on alliances with TV and film producers to provide content for its service bundles. JioFiber will also include movies that can be seen by subscribers on the same day they debut in cinemas, Ambani said in a speech laying out the plan on Aug. 12. That part of the service won’t start until the middle of next year, he said.
Own Content
Kapoor said that JioFiber, which Ambani said was being offered “at less than a tenth of global rates” if Jio produces its content and showcases the best talent for it, Kapoor said.
Airtel, the brand name for Mittal’s carrier, could take the most direct competitive hit from JioFiber, because with its content bundle for mobile services, it is one of the largest TV service providers in the country. Data compiled by Bloomberg show the company’s digital TV segment had earnings of about 12% as of the end of March.
In a possible attempt to get ahead of JioFiber’s formal introduction, Airtel on Tuesday unveiled upgraded versions 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, along with Airtel’s other content offerings.
Satellite providers such as Tata Sky Ltd. and Dish TV India Ltd. as well as cinema chains also face competition from Jio, which will offer fiber TV in bundles with its mobile services and free landline calling.
Shares of Dish TV fell 1% on Thursday in early Mumbai business, while their decline reached 12% after Ambani unveiled the plans. This compared with a decline of 2.1% in the benchmark S&P BSE SENSEX index. Inox Leisure Ltd., a movie-hall chain. Declined by 11% over the period.