Posted On September 18, 2016 By In Business And 410 Views

Jio to expand capacity, targets 250 mn users

Reliance Jio is planning to expand its network capacity to accommodate more than double the number of subscribers it is currently targetting or, over 250 million users from the planned 100 million users. This follows the the market response to its Jio Welcome offer, sources in the know of the development said. The company is planning to spend “another couple of billion dollars” to expand its network and has informed vendors about its network expansion plans. It is likely to award the contract soon, said the sources. The company currently has capacity to serve in excess of 100 million wireless broadband and 20 million Fibre-to-Home customers, according to its website. The telecom industry has a wireless subscriber base of a little more than 1 billion subscribers as of June, as per the numbers released by regulator TRAI. Bharti Airtel leads the pack with about 260 million subscribers. In the race for the network expansion contract from Reliance Jio are Samsung, Juniper Networks, Ericsson and Cisco, amongst others, the sources added. Samsung is learnt to have been awarded a contract to add 48,000 telecommunication towers to the company’s current network of 1.3 lakh telecom towers. Idea Cellular and Vodafone have close to two lakh telecom tower each.

“The idea is to multi-fold our transmission capacity to 250 terabits per second (tbps) from 2 tbps now, as Jio is getting enormous response from data users who are using data at an average of 26 GB per month compared to the industry average of less than 1 GB per month,” said one of the sources. “The average monthly consumption per user is in excess of 26 GB and is increasing rapidly,” said Reliance Industries in a statement after the first quarter results. “Average voice usage per month is over 355 minutes,” it added. Reliance Jio has built close to half-a-million square feet of cloud data centres and an international network with multi-terabit capacity, according to Reliance Jio’s website. Jio’s current customer base of over five million is choking network capacity of other operators due to high traffic and this (evolving scenario) has necessitated the expansion, said another of the sources. Besides, the company is planning to launch its fibre broadband offering speed of 100 MBPS, which will consume more data. However, analysts have felt that the current growth of the 4G-enabled handset market would allow Reliance Jio to reach its target of 100 million customers only by March 2018, well after its own deadline of December 2016.

Asked if this wasn’t a dampener to the network expansion plans, one of the above sources said that the network for 100 million subscribers had been created in the last five years and that creating a network is a time-consuming process. The plan now was to make “Jio future-ready and is able to scale up its subscriber base without facing network constraints,” the source said. A Reliance Jio spokesperson declined to offer any comments. Meanwhile, Reliance Jio has made the highest earnest money deposit — about Rs.6,500 crore, which comes about equal to the combined deposits made by Bharti Airtel, Vodafone and Idea, an indication of the compny’s intent to bid for spectrum to further expand its network.

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