In Business Model, Internet Access, Mobile, Spectrum

Some observers are relatively unconcerned about the potential impact of 5G and other untethered access offers on fixed internet take rates and subscriber volume. Reliance Jio’s massive disruption of the mobile industry might also suggest that untethered access is subject to mobile and wireless substitution.

Reliance Jio’s average usage levels of around 10 gigabytes per customer are much lower than the 56 GB per month that buyers of fixed broadband connections in India consume,  according to Analysys Mason estimates.

In that sense, there is–with existing offers–a natural limit of the substitution effects. Reliance Jio has fair use limits of 4 GB per day, and arguably does not always operate at speeds that are functionally comparable to fixed access offers.

However, Reliance Jio also offers JioFi MiFi devices, the users of which are likely to represent a single percentage point figure of its overall subscriber base.

On the other hand, Reliance Jio does offer usage plans offering 112 GB per month worth of usage, selling for about $8 a month. So long as typical usage does not exceed close to 4GB each day, that can make such a plan a reasonable substitute for fixed service.

The evidence for growing mobile substitution is that fixed internet accounts have dipped since mid-2017, as Reliance Jio gained mobile market share.

Fixed broadband subscribers, India, November 2015–November 2017

Figure 1: Fixed broadband subscribers, India, November 2015–November 2017

source: Analysys Mason

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