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Mukesh Ambani’s disruptive Jio GigaFiber launch may not hurt Bharti Airtel much

FE Online

After billionaire Mukesh Ambani-led Reliance Jio announced the much awaited commercial roll-out of Jio GigaFiber, global firm CLSA noted that it may have limited impact on Bharti Airtel's estimates. Analysts say that Bharti Airtel's offerings can effectively counter Jio's disruptive plans. Yesterday, Reliance Jio made a commercial debut into India’s FTTH broadband sector with plans as low as Rs 699. Jio's latest offerings include FTTH high-speed broadband up to 1Gbps, live TV, online gaming, group video calls, and more will be available to Jio Fiber customers across 1600 cities in India. Taking stock of the development, CLSA said that while the TV smartification will adversely impact broadcasters, the new plans will not impact Bharti Airtel's offerings. Interestingly, Reliance Jio has announced that the annual subscriptions for Jio Fiber Gold, Diamond, Platinum, and Titanium packs will entitle the customers for a free 4K TV set.

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Reliance Jio's foray into the fibre-to-the-home (FTTH) comes within three years of its disruptive entry into the telecom sector. According to BNP Paribas, Airtel's products are priced competitively to counter Jio's latest move. “We believe Airtel’s current converged digital entertainment platform, Xstream is competitive on the pricing and product fronts and to a large extent tackles competition from JioFiber,” BNP Paribas said in a note. Further, the edge Bharti currently has is that it is providing free subscription of popular OTT players such as Amazon Prime and Netflix, whereas Jio does not have these at present, it noted.

Following the lauch, Reliance Industries shares are trading 1% higher at Rs 1,212.50 on BSE. Taking stock of Reliance's pricing strategy, global brokerage firm Credit Suisse said that Jio's entry level broadband pricing is competitive. Credit Suisse has maintained a nuetral rating on the shares with a target price of Rs 1,210. Credit Suisse estimates that braodband services will contribute $1.2 billion EBITDA to consolidated operations if it achieves the 20 million user target.