If at all, there’s any major disruption by the launch of Jio’s wireline FTTH services JioFiber, it will be for the state-owned Bharat Sanchar Nigam (BSNL), which is currently the market leader in this segment.

Just for perspective — the total user base of wireline broadband services in the country stands at just 18.45 million. Of this, the largest share is of BSNL’s at 9.09 million, followed by Bharti Airtel, which has 2.39 million subscribers. The other players are very small.

Unlike mobile services, expansion of wired broadband services is a time-consuming process as it involves laying of fibre. Here too, Jio’s strategy is that of wiring with fibre up to the home as opposed to providing the last-mile linkage through copper, so the time consumed will be higher and a nationwide launch at one go is not possible.

As far as presence is concerned, RJio has announced a target to reach 20 million residences and 15 million business establishments in 1,600 towns in the next 12 months.

Currently, only BSNL is a pan-India player for wired broadband with presence in all the cities and towns of the country, barring Delhi and Mumbai where MTNL is present. Quite in contrast, Bharti Airtel has a very segmented approach and has presence in only 99 cities, though it started the services way back in the year 2000. Even in these 99 cities, its presence is only in limited areas.

Let’s take a look at the revenues that wired broadband services contribute to the overall revenues of BSNL and Bharti. In case of BSNL, broadband services revenues in FY19 stood around `4,000 crore, which is 21% of its overall revenues of `19,308 crore during the year. In case of Bharti, the broadband and DTH services together contributed `6,339.2 crore in FY19, which was 10.5% of the company’s overall revenues of `59,858.9 crore from the India business.

However, during the April-June quarter of the current fiscal, since the share of mobile revenues increased, the share of broadband and DTH revenues came down to 9% of the total India business revenues.

Also, in terms of tariffs, Jio hasn’t indicated any major disruption. The company has hinted that the tariff for Jio Fiber will be one-tenth of the global tariffs and that its plans will start from `700 per month and go up to `10,000 per month.

Bharti Airtel’s current tariffs range from `799 to `1,999 per month. BSNL’s average tariffs are lower than that of Bharti’s.

The limited impact on Bharti Airtel’s business due to Jio’s launch has been noted by Bank of America Merrill Lynch in its report. “We do not rule out some pressure on Bharti’s broadband revenues led by Jio’s entry in the space. However, impact is expected to be limited as overall fixed broadband penetration remains low (<8%) and large greenfield opportunities remain. We do not expect much pressure on Bharti’s enterprise revenues as Jio is unlikely to gain material traction for the next 18-24 months given sticky nature,” the brokerage noted in its report after Jio’s announcement on August 12 to enter this space.

Prior to the announcement of the launch, Kotak Institutional Equities had observed in its report on BSNL’s dwindling prospects that going forward, Jio’s foray into fibre-based broadband services will impact BSNL’s wireline business – this business has been the only growing segment for BSNL for the past few years.