JioAirFiber Could Unlock $7-10 Billion Revenue Opportunity, Says Jefferies
Jio’s fixed wireless access pricing offers a 25% lower entry point compared to Bharti Airtel’s starting plan.
Reliance Jio Infocomm Ltd.'s JioAirFiber high-speed wireless broadband service could unlock up to $7–10 billion revenue opportunity by spurring adoption among 85 million pay TV homes that don't have internet access today, according to Jefferies.
The size of the addressable market is assumed to be 100 million subscribers, with Rs 500–700 in monthly average revenue per user, it said, given that India has 35 million broadband households and 120 million pay TV households.
The brokerage has a 'buy' rating on parent Reliance Industries, and raised the target price from Rs 2,950 to Rs 2,975, implying an upside return of 27%.
Reliance Jio launched JioAirFiber in eight metro cities—Ahmedabad, Bengaluru, Chennai, Delhi, Hyderabad, Kolkata, Mumbai, and Pune—to accelerate its home broadband coverage. The service is designed for both homes and offices, offering speeds of up to 1 gigabyte per second, making it ideal for smooth high-definition video streaming, online gaming, and lag-free video conferencing.
Cheaper Pricing Than Bharti Airtel
Jio has positioned JioAirfiber as a home entertainment solution, bundling in content from 550+ TV channels and 14+ OTT apps across all its plans, Jefferies said in a Sept. 27 note.
JioAirFiber is priced in line with JioFiber, suggesting that both services will offer similar experiences, according to Jefferies. But it offers a 25% lower entry point compared to Bharti Airtel’s Rs 799 FWA plan.
"Jio's fixed wireless access offering offers immense value to urban payTV homes, as they would get internet access and content at lower price points vs. what they pay (Rs 600–700 per month) for TV content currently," Jefferies said. "However, rural or semi-urban pay-TV homes paying Rs 200–400 per month for TV may need some push to switch to JioAirFiber".
Higher Speed And Scale
JioAirfiber offers speeds ranging between 30-1000 megabits per second, in line with its FTTH service. Jio's standalone 5G network enables more effective network slicing, which will help the company offer dedicated speeds to its fixed wireless access customers, Jefferies said.
"Our checks suggest that Jio has enough capacity to serve 400 million 5G mobile subscribers and 20 million fixed wireless access homes. Its recent acquisition of Mimosa Networks will also allow the use of unlicensed band radio to augment its fixed wireless access capacity," the note said.
Access to more than 30 million affluent homes will help Jio accurately ascertain content viewership patterns, making it a crucial player in the $4 billion TV ad market in India, according to the brokerage.
Cloud PC and gaming, home networking, and security and surveillance solutions may further add to the revenue opportunity, Jefferies said.
Shares of Reliance Industries were trading 0.44% lower at Rs 2,358.50 at 12:01 p.m. compared to a 0.45% decline in the benchmark NSE Nifty 50.
Of the 39 analysts tracking the company, 32 maintain a 'buy', four recommend a 'hold,' and three suggest a 'sell', according to Bloomberg data. The average of 12-month price targets implies an upside of 18.5%.
