Stocks of Den Network, Hathway Cable and GTPL Hathway fell to new 52-week lows on Friday, with the counters witnessing a sharp selloff, after Reliance Industries Ltd (RIL) unveiled its fiber broadband system in a push to make further inroads into India’s wireless and fixed-line internet industry.

The Siti Networks counter, though not at a new 52-week low, too saw selling pressure.

On Thursday, RIL chairman, Mukesh Ambani, announced the plan to roll out JioGigaFiber at the 41st annual general meeting in Mumbai.

JioGigaFiber is a fibre-to-the-Home (FTTH) broadband service that will be rolled out for users in 1,100 cities across India.

Registrations for the service will start from August 15 on the MyJio app and the Reliance Jio Infocomm website.

Users need to make a one-time investment of Rs 4,500 as security deposit towards the router.

The roll-out will be driven by the concentration of registrations — first in areas of higher registration density.

Most noteworthy about JioGigaFiber is that, it isn’t just a broadband service but a total connected home solution.

Given how RIL has disrupted the telecom services market with Reliance Jio Infocomm, the street is clearly wary about what lies ahead for broadband and cable operators.

Analysts believe that JioGigaFiber has the potential to disrupt pricing in the fixed broadband space.

Also, they expect margins to shrink for existing broadband players and distributors like Den and Hathway.

But the move will be positive for the content owners such as Zee, Sun TV etc. as content consumption is bound to go up with the further laying of pipe.

The launch of JioGigaFiber is expected to begin from the end of CY2019 on the complex basis for housing complexes.

Analysts believe that an entry price point of Rs 500 for basic broadband service, which is lower than that charged by existing players, can put pressure on the earnings of the incumbents.

Fixed broadband ARPU comparison across key players as:

2018 Broadband ARPU (Rs Per month)

Den Network Rs 632

Hathway Rs 710

GTPL Hathway Rs 480

However, this price could be higher for more value-added services (such as TV, video calling, etc.) are provided on top of this.

IDFC Securities remains neutral on Hathway Cable, while it has an underperformer rating on Den Networks.

In an exclusive interview with CNBC TV18, SN Sharma, Chief Executive Officer, Den Networks, said the JioGigaFiber launch will push players like our company to adopt a robust business model.

Sharma also indicated that tariffs had already been declining due to competition from players like Airtel and the company was cost-competitive.

He added that the size of the market was large enough for several players to co-exist, and the entry of Reliance Jio Infocomm will likely lead to faster expansion of the segment.

Sharma also said that he expects Den Network to be in the black by end FY19.

Disclosure: RIL, the promoter of Reliance Jio, also controls Network18, the parent company of CNBCTV18.com.

First Published:Jul 6, 2018 1:02 PM IST