With more than a billion mobile phone users in India, millions of people are able to access the internet all the time. Not surprisingly, nearly 80 per cent of all webpage views in India are done through mobile phones.

Kenya and Nigeria are the only two countries with a higher ratio of mobile internet traffic as a percentage of total web traffic. The global average is just around 52pc, and even in China it is much less at 61pc.

A recent report by Statista, a stats portal, noted that the percentage of global pages accessed through mobile phones had shot up from a mere 0.7pc in 2009 to 52.2pc this year.

Of course, the high mobile internet traffic rates in Africa and Asia reflect the terrible landline infrastructure in many countries, including India. The three to four major operators — that include two state-owned service providers, Bharat Sanchar Nigam Ltd (BSNL) and Mahanagar Telephone Nigam Ltd (MTNL), and Bharti Airtel, which is the largest telecom player in the country — have been rather lacklustre in providing landline broadband services.

Despite having a presence in the sector for more than 20 years, the operators have been content with providing services to consumers by deploying wireless technology, instead of offering optical fibre networks.

Mukesh Ambani, chairman of the Reliance Group that entered the telecom sector just two years ago and virtually demolished the industry dominated by the likes of Bharti Airtel, Vodafone and Idea, recently noted that India ranked 134th globally in terms of fixed broadband connectivity.

Poor fixed-line infrastructure was the key factor for the sad state of affairs in the segment, he pointed out. Of course, Mr Ambani — who virtually transformed the mobile phone sector in India with the launch of his Reliance Jio about two years ago — is planning to do something similar in the broadband segment.

Mukesh Ambani’s announcement about the launch of Jio GigaFiber, a broadband network, has sent the existing operators scurrying for cover

While the existing players offer optical fibre network in a mere 100 cities, Mr Ambani has promised to transform the segment, rolling out high-tech services across 1,100 cities in India.

“Jio GigaFiber will be the largest greenfield fixed-line broadband rollout anywhere in the world, with rollout happening in 1,100 cities of India simultaneously,” said Mr Ambani.

And his announcement earlier this month about the launch of Jio GigaFiber, a broadband network, on August 15 has sent the existing operators scurrying for cover.

Bharti Airtel has announced a 15-20pc cut in prices for its broadband packages. The price for a six-month subscription has been cut by 15pc and for the annual package by a hefty 20pc.

BSNL has announced the rollout of “the most economic broadband” plan in India, offering 20 GB data a day (at a speed of 20 Mbps) in a 30-day package for less than Rs500. MTNL is offering free 3G connections and up to 10 GB of data with broadband connections.

The entry of Reliance Jio into the broadband market is expected to not only shake up the market — offering consumers affordable internet packages — but also rev up the market. Telecom experts expect the broadband segment to balloon to 50 million or more from the present figure of less than 20m.

The aggressive foray into the sector by Reliance Jio will shake up not just the existing players, but even the once-powerful cable TV and DTH (direct-to-home) operators.

The digital offering by Reliance will transform the sector, enabling viewers to watch streaming offerings.

Rajan S. Mathews, director general of the Cellular Operators Association of India, says that the entry of Reliance Jio will bring in much-needed integrity between fixed and mobile service offerings. “It will also encourage other players in the market

to roll out their fibre-to-home technology faster,” he adds.

India Ratings and Research (Ind-Ra), a leading ratings agency, points out that the launch of Jio GigaFiber could boost the broadband market in the country.

“Reliance Jio’s aggressive marketing could lead to an expansion in the broadband market, somewhat similar to the one that took place in the wireless mobile data market,” says an Ind-Ra report. “We estimate that at the current monthly broadband tariff of Rs500-Rs600 per household, the potential market size for 50m households could be Rs300-Rs360bn, a significant portion of which could be tapped by RJio.”

With the current low penetration level of fixed broadband in India — accounting for a mere 7pc of total household base of 290m and just 10pc TV household penetration — it offers good potential for growth.

According to the Ind-Ra report, the Reliance Jio target of 50m households — representing 18pc of total households in the country — is an achievable goal.

Analysts also expect Reliance Jio to come out with innovative offerings, just as it did with its mobile phone launch. Importantly, the company has invested a massive Rs2.5 trillion in setting up the digital infrastructure for mobile broadband connectivity.

“We expect Jio’s pricing to be extremely competitive and the initial three to six months could be completely ‘free’, just as it was the case during its wireless service launch,” says a report by IDFC Securities. “We believe that an entry price point of Rs500 (for basic broadband service) could lead to massive penetration and this price could be increased as more value-added services (such as TV, video calling, etc) are provided on top of this.”

The Reliance Jio foray into the broadband segment is expected to boost India’s standing in the telecom world.

A recent report by Cable.co.uk notes that India has improved its ranking on a research list brought out by Measurement Lab (M-Lab) by 31 places and now ranks 88 in terms of download speeds.

Last year, India ranked 119 with a download speed of 2.06 Mbps. This year,

download speed has gone up to 5.19 Mbps. While cities like Mumbai and Delhi have much higher download speeds, the

situation in semi-urban and rural India is vastly different with very low speeds. Hopefully, the entry of players such as Reliance Jio will transform this over the next few months.

Published in Dawn, The Business and Finance Weekly, July 16th, 2018