Reliance announces Jio AirFibre: What is this internet connectivity service, its possible impact

Why could this be the beginning of a new market?

In 2016, as Jio launched its 4G services, it also disrupted the Indian telecom market forever — bringing down the cost of mobile data significantly and leading to a boom in data consumption across the country. While the effects of that were largely felt for mobile users, with AirFibre, Jio is looking to replicate some of that success in India’s dwindling and minuscule home broadband market.

“Our extensive optical fibre presence puts us in close proximity to over 200 million premises. Yet, providing physical last-mile connectivity is a painstaking process in most parts of our country. This leaves millions of potential customers without home broadband due to complexities and delays involved in extending optical fibre to their premises. This is where JioAirFiber, our fixed-wireless broadband offering, comes in,” said Reliance Industries’ chairman Mukesh Ambani during the company’s 46th annual general meeting on Monday.

JioAirFiber will use the company’s 5G network coverage and “advanced wireless technologies” to bypass the need for last-mile fibre, Ambani said. The result could increase daily connections by nearly ten times.

“Through optical fibre, we can currently connect around 15,000 premises daily. But with JioAirFiber, we can supercharge this expansion with up to 150,000 connections per day, a 10-fold increase, expanding our addressable market over the next three years to over 200 million high-paying homes and premises,” Ambani said.

The AirFibre will launch on September 19.

What is the broadband market in India like?

Even as India has seen a significant uptake in mobile Internet users, home broadband coverage remains patchy. According to data released by the Telecom Regulatory Authority of India (TRAI), there were a little over 35 million wired broadband subscribers in the country as of June 2023. The fixed wireless broadband market is tinier — around 950,000 subscribers as of June end, TRAI’s data showed.

The current wired broadband companies are Reliance Jio (9.17 million), Bharti Airtel (6.54 million), BSNL (3.66 million), Atria Convergence (2.16 million) and Hathway (1.12 million).

What could be the AirFibre impact?

In an analyst note, Morgan Stanley said that currently, Jio Fibre reaches 10 million homes and its optical fibre cable spans over 1.5 million kilometres. With Jio AirFiber, it has the potential to connect up to 150,000 homes every day. “The company has increased its addressable market guidance for home broadband to 200 million homes versus 100 million homes earlier,” it added.

The firm Jefferies said that the expansion in the homes’ segment may open up adjacencies around smart home solutions as well.