Reliance Jio targets 100 million homes through its 5G fixed wireless capability | Techno Glob


Reliance Jio may turn its aggressive target of reaching 100 million households by launching 5G fixed wireless access (FWA) to make it one of the world’s largest players in this space.

But it also represents a change from the previous strategy of offering fiber-to-the-home (FTTH) broadband to households. Despite its best efforts, within two years, Jio was able to connect only 7 million households with FTTH, as last-mile right-of-way permits became a major hurdle and the process of laying channels for lease was slow and cumbersome. .

Last mile FTTH will now be replaced by 5G wireless access, which will make its deployment scale faster. It also aligns with what consumers want from global 5G. A GSMA Intelligence survey last year of smartphone users in 10 countries, including India, China, the US and the UK, found that 42 percent found FWA to be the most attractive service.

The 100 million households set by Reliance Jio is an ambitious target as it represents one-third of the country’s 300 million households (paid and free). This number also corresponds to the entire universe of pay TV subscribers in the country (just over 100 million). Of course, there are 100 million households without a TV.

According to a June 2022 GSMA Intelligence report, 5G FWA connections in 52 countries are expected to reach only 40 million households by 2025. In fact, FWA penetration as a percentage of total households in 2021 was only 1 percent in the US. Poland has the highest rate at 16%.

Clearly, Mukesh Ambani is eyeing a much bigger share of the pie for 5G FWA in India.

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If Jio achieves the target, it could see a significant increase in its mixed (mobile and broadband) average revenue per user (ARPU), which analysts say could rise to Rs 250-300 from Rs 170 currently. any increase in ARPU from mobile customers). This is because the ARPUs of direct-to-home customers are three to four times higher than the average ARPU of mobile customers.

The strategy makes sense. Although Jio has announced that it will go for 5G on its own, it will take some time to develop large, monetized use cases. Until then, no noticeable growth in mobile ARPUs is expected. However, by acquiring FWA customers, the blended ARPU will benefit greatly.

A study by Vodafone Idea Limited (VIL) found that the 23 countries that launched 5G saw only 1 percent growth in weighted ARPU in the first 6-10 quarters. In India, telecom firms have said they are not looking at any significant rate hikes from 4G to 5G. They see ARPUs increasing due to increased data usage.

Jio’s reason for choosing the FTTH route was simple: laying fiber is a one-time investment and thus more cost-effective, unlike last-mile wireless connectivity, where the telco has to buy additional spectrum as the number of customers increases. However, the GSMA notes that the deployment of 5G FWA could result in cost savings of between 30 percent and 60 percent, depending on which 5G band is used.

PUTTING IT IN CONTEXT

  1. 100 million households is equivalent to the country’s entire pay TV subscriber base
  2. According to a GSMA Intelligence report, 5G fixed wireless access (FWA) is expected to reach only 40 million households in 52 countries.
  3. GSMA projects FWA household penetration to exceed 4% in 52 countries by 2025
  4. According to Jio, its penetration will be double that of India
  5. If Jio achieves the target, its blended (mobile and broadband) ARPU could rise to Rs 250-300 crore from the current Rs 170 (with no change in ARPU from mobile customers)
  6. The ARPU of direct-to-home customers is 3-4 times higher than the average ARPU of mobile customers



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