April 2015

UNRAVELLING RELIANCE JIO


We Have Pieced Together, From Reports & Discussions, What Reliance Jio Is Probably Planning To Offer


It is well over 2 years now since Mukesh Ambani declared his intentions to enter into telecom, and launch Reliance Jio, a quadruple play service that will offer Television, Very High Speed Wired & Wireless Broadband & Mobile telephony. The first concrete step was probably when Mukesh Ambani's Reliance Industries Ltd. bought out Swan Telecom, a day after Swan bid and received a pan India license for 4G services @ 2,300 MHz. Since then, the country has been waiting with baited breadth, for Reliance Industries' telecom service to unfold.

Mukesh Ambani reportedly has ` 60,000 Crores in Reliance Industries Ltd, available for a new business venture that will serve as a growth engine to its stagnant fortunes currently centered on petroleum refining.


TECNICAL BASICS

Let's take a closer look, first at the technical facts, related to Reliance's probable quadruple play solution.


2300 MHz Earlier Licensed To Reliance Cannot Provide Service Indoors




FREQUENCY

Reliance, through Swan Telecom, has an All India license to deploy 4G only over 2,300 MHz.

♣ 2,300 MHz can be transmitted and received only over Line-Of-Sight.

♣ 2,300 MHz signals cannot penetrate walls. Hence it cannot directly provide any service (TV, Broadband Or Telephony) indoors.

♣ Prior to the March 2015 Spectrum auction, Reliance Jio only had 2,300 MHz Spectrum.


WHAT IS 4G

4G is the fourth generation of wireless transmission, that provides speeds of at least 100 Mbits/sec to fast moving (e.g. cars and trains) receivers and 1,000 Mbits/sec to stationary users.

4G carries Internet protocol (IP) data packets only. 4G does not carry voice signals or TV signals directly.

4G carries only IPTV signals for video & VoIP (Voice Over Internet Protocol) for voice telephony.


4G Networks Carry Only IPTV, Not CATV Signals.


Hence, Reliance Jio's 4G network cannot carry Digital Cable TV signals.



NO DIGITAL CATV ON RELIANCE 4G

There has been speculation for the past 2 years that Reliance Jio will buy out Cable TV networks countrywide, and become a major Cable TV MSO, pan India. Several small MSOs have reportedly stalled their plans to setup Digital Cable TV Headends, fearing (or hoping) that Reliance will buy out their cable TV network.

As explained above, Reliance cannot directly connect a Cable TV network to its infrastructure, which actually runs on IP. They will have to convert the 4G IP signal to Digital Cable TV, (e.g. with an Edge QAM Modulator) before it can be distributed as a digital Cable TV Signal. However, even that is not practically possible, because the DAS Headend's signals are encrypted specific to the Headend, and all the subscriber's STBs will only operate with the local Headend's encryption. All STBs would have to be replaced, implying a huge secondary expense.


Reliance Jio Cannot Carry Digital CATV Signals


3 TIER SERVICE

Piecing together reports and discussions SCaT speculates that Reliance Jio's service will consist of 3 delivery modes to the same customer. The customer will ideally receive his service seamlessly shifting from one delivery mode to the other, often even without his knowledge. The 3 delivery modes are Fiber, Public Wi-Fi and 4G Mobile.


FIBER

Reliance Jio plans to bring an extremely high bandwidth pipe to the consumers' home or office via Fiber. The Fiber connection has practically an infinite bandwidth and therefore capable of delivering a huge number of IPTV channels along with extremely high speed broadband data services and VoIP telephony. 300 or even 500 TV channels can be streamed via multicasting of the Reliance Jio IPTV service.

Indications are that at least 100 Mb/s broadband connectivity will be provided to all broadband subscribers. Telephony will be delivered via the internet as a VOIP service.

In the consumers' home or office, the Reliance Fiber will probably be terminated on a Hybrid STB which will receive the optical signals and convert them to electrical signals for a TV set plus a data stream that will be broadcast using an inbuilt Wi-Fi router built into the Hybrid STB. The Wi-Fi router will provide wireless connectivity in the consumer's home or office.

The Wi-Fi signal will be picked up by smartphones, all of which are capable of receiving Wi-Fi signals.

Hence, Wi-Fi connectivity through the smartphone will deliver streaming video plus high speed broadband plus VoIP to the consumer's mobile phone.

Fiber being the widest data pipe, will carry a huge number of TV channels (both FTA and Pay Channels) into the home. At least theoretically, the picture quality and user experience for the IPTV service should be good. However, switching of TV channels on an IPTV STB almost always takes much longer than channel switching on a digital CATV STB.

Since the entire home will be covered by transmissions from Reliance Jio's STB/Wi-Fi Router, the entire home will receive high speed broadband which will not only support wireless internet throughout the home but also VoIP calls via the consumer's mobile phone.


PUBLIC WIFI

Reliance Jio will set up a very large number of Public Wi-Fi spots where its customers' mobile phones will automatically log-in and receive the Reliance Jio Wi-Fi signal.

This mode of transmission will not have the almost infinite bandwidth of Fiber to the home. However the bandwidth available at the Public Wi-Fi spots would be adequate to provide a good user experience on the mobile phone for streaming video (select TV channels), high speed wireless broadband and VoIP telephony. Press reports indicate that Reliance Jio is in the process of setting up more than 3200 Public Wi-Fi Hotspots & 4G nodes in New Delhi alone. A similar number of Public Wi- Fi Hotspots will have to be set up in each of the major cities throughout the country. This will of course be a huge logistic issue.


WIRELESS 4G

Mobile Phone spectrum is exorbitantly priced @ ` 3600 crore for 1 MHz. Clearly this spectrum will be used sparingly to provide connectivity outside the user's home/office where there is no reach even from the Public Wi-Fi Hotspots.

To conserve 4G bandwidth it is most unlikely that Video Streaming (IPTV) for a large number of channels will be made available via 4G Wireless Connectivity. Broadband will of course be delivered. Theoretically 4G should be capable of delivering 100 Mb/s speeds even to users in moving trains. However, the LTE standard currently being implemented by Reliance Jio will not be able to deliver these speeds. Possibly in the future, the company will upgrade to LTE-A (LTE Advanced) which will deliver the full speeds promised by the 4G specification.


CONVERGED DELIVERY

SCaT speculates that the Reliance Jio consumer will be seamlessly be switched between Fiber (feeding his home Wi-Fi), Public Wi-Fi and 4G mobile services, without him even being aware of any transition.

Non 4G mobile phones can still be used in the home and within the range of Public Wi-Fi hotspots, for Streamed video and high speed broadband, both of which will be received using regular Wi-Fi connectivity available on all smartphones.


WHY MSO LICENCE?

In January 2015, Press reports prominently declared that Reliance Jio had applied to the Government for a DAS MSO License. The immediate (and probably not entirely correct) conclusion was that Reliance planned to launch a national level MSO operation that would rival or exceed those of the largest cable MSO. This is probably not entirely true.

It is rumored that Reliance Jio aggressively approached Pay Channels for their feeds for its IPTV service. The Pay broadcasters apparently flatly refused to negotiate with Reliance which is rumored to have demanded extremely low pay TV rates.

In fact the pay channels even refused to provide their content at the compulsory RIO rates, since Reliance Jio did not have a DAS MSO license.

Reliance Jio's DAS MSO License application (which is still pending with the I&B Ministry) is aimed primarily at ensuring that the company receives pay channel content at least at the RIO rates.

As we speculate below, Reliance Jio also has plans to buy out only very few, select, Cable TV networks countrywide.


WILL JIO BUY CABLE NETWORKS?

As pointed out earlier, Reliance Jio's TV service is an IPTV streaming service and not digital cable TV. Further, due to the unique encryption used at each DAS Headend, Reliance Jio's IPTV signals cannot be delivered via an Edge QAM modulator to existing digital Cable STBs.

Clearly existing DAS cable networks are quite useless for integration into Reliance Jio's scheme of things.

However reports are that Reliance Jio plans to buy out only a select few cable TV networks that are located in prime localities that will provide Jio's new service, a high level of visibility quickly amongst the general population. At least initially Reliance will operate these networks as cable TV networks under the Reliance Jio brand name.

Jio's DAS MSO license will also enable the operation of these initial few digital Headends.

Since Reliance Jio has no long term use for cable TV networks and cannot fully utilise these assets, it is most unlikely that Reliance Jio will embark on widespread purchases of cable TV networks as a primary means of operation.


It Is Most Unlikely That Reliance Jio Will Embark On Widespread Purchases Of Cable TV Networks


CONTENT LICENCING ISSUES

It is rumored that Reliance Jio is already facing issues in procuring content. Pay Channel broadcasters have taken a tough stand against the new industry Goliath.

The RIO price as the compulsory maximum price at which a pay channel must be offered, currently applies to cable TV and DTH. It is not clear whether the RIO price also applies to IPTV. Maybe Reliance may have to get the law suitably amended to cover its IPTV operations.

Since Reliance Jio's grand plan includes providing pay channels/streaming video to its consumers' mobile phones, TV channel rights and pay channel prices which are applicable for TV sets may not cover providing the same content to mobile devices. Like any other technology pioneer, Reliance Jio will have to address and cross these non-technology barriers.

PRICE

Reliance had shaken up the mobile telephony market almost a decade ago when it offered mobile phones at ` 500 each and a talk time of 1 paise per second. The Indian mobile industry is still reeling from this predatory pricing.

Consumers have expectations that Reliance Jio will offer similar predatory pricing for its Broadband and Voice service.

Unconfirmed rumors are that High Speed Broadband will be offered at just ` 10 per GB compared to ` 99 per GB that mobile phone companies currently offer. Initial wired Broadband maybe offered with a free 3 month trial.

Telephony via VoIP maybe offered at a flat monthly fee for unlimited calls.

Of course all this is mere speculation.


WHEN?

The million dollar question on everyone's mind is "When will Reliance Jio roll out its service?" The company itself has consistently refrained from making any public statements on a specific time frame. For the past two years or more, Reliance Jio's service was rumored for a scheduled roll out on 28th December, the late Dhirubhai Ambani's birthday.

However, unconfirmed press reports indicate that Reliance will almost certainly roll out some service, first in Jamnagar (where its petroleum refinery is located) and Mumbai, in June 2015.

Fiber Optic cable is being laid at break-neck speed along Mumbai's roads, hinting that they are working towards a tight deadline.

Reliance Jio's 3 tier (Fiber, Wi-Fi and 4G) service deploying full quadruple play (IPTV + Wired + Wireless Broadband + Telephony) may be difficult to roll out seamlessly on a wide scale in a large metro city like Mumbai. It is possible that initially Broadband and VoIP/Voice services could be rolled out initially in Mumbai. Cable TV networks maybe bought out in select pockets to provide enhanced visibility. Of course, the entire quadruple play plan detailed above is pure speculation. It remains to be seen if this will be the shape of Reliance Jio's service. However, if and when Reliance Jio does roll out a converged service as outlined above, it would be a technology feat practically unrivalled anywhere in the world. n



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