JioAirFiber to unlock a $7-10 billion revenue opportunity: Jefferies

Foreign brokerage Jefferies expects JioAirFiber to unlock a $7-10 billion revenue opportunity as it could spur broadband adoption among 85 million Pay-TV homes that don't have internet access today.

“We see Jio as well positioned to scale its fixed wireless access offering to 35 million homes by March 2026 given its hefty network investments, standalone 5G setup which enables it to offer dedicated speeds, and investments in unlicensed band radio,” the foreign brokerage says.

Jefferies in a note raised its consolidated Ebitda (earnings before interest, taxes, depreciation, and amortisation) estimates for Reliance Industries by 1-2%. The brokerage also raised its target price to ₹2,975 with a ‘BUY’ rating.

JioAirFiber was launched last week in eight key cities in India. Jio has positioned JioAirfiber as a home entertainment solution given that it has bundled content from 550+ TV channels and 14+ OTT apps across all its plans with no plans with just internet connectivity option.

JioAirfiber offers speeds ranging from 30-1000Mbps, in line with its fibre to the home service. “Jio's standalone 5G network enables a more effective network slicing which will help Jio offer dedicated speeds to its FWA (fixed wireless access) customers. Our checks suggest that Jio has enough capacity to serve 400m 5G mobile subscribers and 20m FWA homes. Its recent acquisition of Mimosa Networks will also allow the use of unlicensed band radio for augmenting its FWA capacity,” says Jefferies.

JioAirFiber is priced in line with JioFiber, suggesting that both services will offer similar experience, according to Jefferies. Jio’s fixed wireless access pricing offers a 25% lower entry point compared with Bharti Airtel’s ₹799 plan, the brokerage notes. “Jio's FWA offering offers immense value to urban PayTV homes as they would get internet access and content at lower price points vs. what they pay (₹600-700/month) for TV content currently,” it says.

However, rural or semi-urban Pay-TV homes paying ₹200-400 per month for TV, may need some push to switch to JioAirFiber, the brokerage adds.

India has 35 million broadband households, 120 million pay-TV households as against total households at 319 million. “We believe, JioAirFiber (FWA) can spur broadband adoption among 85m households that pay for TV but don’t have a broadband connection. We estimate FWA's direct addressable market could range between US$7-10bn assuming 100m subscribers at Rs500-700 monthly ARPU,” the brokerage says.

Access to over 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, the brokerage says. “Additionally, cloud PC and gaming, home networking and security and surveillance solutions may further add to the revenue opportunity,” it adds.

On September 19, Reliance Jio launched Jio AirFiber services across eight cities, including Ahmedabad, Bengaluru, Chennai, Delhi, Hyderabad, Kolkata, Mumbai and Pune on Ganesh Chaturthi. Jio AirFiber will use Jio's pan-India 5G network and wireless technologies to bypass the need for last-mile fibre.

The Jio AirFiber plans start from ₹599 for 30 Mbps internet speed and will go up to ₹1,199 for 100 Mbps data speed. The AirFiber Max plan starts from ₹1,499 for 300 Mbps speed; ₹2,499 for 500 Mbps speed; and ₹3,999 for 1,000 Mbps speed.

JioFiber, the company's wired broadband service, has crossed 10 million subscribers across the country, RIL chairman Mukesh Ambani said at RIL's 46th annual general meeting.