New plans of JioFiber have done away with monthly data limits and are priced mainly on the basis of speed and access to OTT apps. The lowest priced plan has monthly rental of Rs399 (unlimited data at 30 Mbps) and should expand Fiber user base significantly. The profitability should be low on this plan but higher user base should translate into more subscribers for Jio app ecosystem, which would in turn contribute to other business segments advertisement revenues, education, health apps, etc.
The basic idea behind the introduction of new Entry level plan is to widen reach of under-penetrated broadband market where Jio has mere 1 Million FTTH subscribers. Jio’s entry level plan of Rs399/month (30 Mbps) is priced considerably lower than its peers. BSNL plans start from Rs499 (20 Mbps) per month. This would significantly expand the broadband market, where penetration is low at 6.9% (FY20 exit). Penetration of high-speed fibre connections is even lower at 0.8%, or 2.3 mn connections. This provides enough headroom for JioFiber to expand the market and this will pose tough competition to local cable operators as well.
Free trial is offered to generate significant consumer interest. Similar to the promotional offer leading up to JioFiber launch, Jio is offering a free trial currently as well. The no-cost 30-day free trial includes unlimited data usage at 150 Mbps speed and 4K Set Top Box with subscription to 10 OTT apps. The user has to just pay the refundable security deposit of Rs2,500 during the period. In order to further lower entry barrier, Jio is offering another free trial option where the refundable security deposit is Rs1,500 but the user does not get the Set Top Box and the OTT apps subscription here.
Expanding user base to benefit Jio ecosystem. However, higher JioFiber users will also result in more subscribers for Jio app ecosystem and there should be contribution to other business segments—advertisement revenues, education, health apps, etc. This should also enable bundled pricing in different Jio offerings. Access to majority of leading OTT apps in intermediate plan. In addition to the entry-level plan, another potentially popular plan can be Gold plan priced at Rs999/month (150 Mbps). The key advantage is that from this plan onwards, users get access to nearly all frequently used OTT apps—Netflix, Amazon Prime Video, Disney+ Hotstar, SonyLIV, ZeeS, Sun NXT, Voot, ALT Balaji, Hoichoi, ShemarooMe, Lionsgate Play, JioCinema.
