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Ortel Communications slashes broadband tariff as Reliance Jio threat looms

With the prospect of the entry of Reliance Jio into the cable and broadband market, Ortel Communications — the largest cable network in Orissa and an emerging player in neighboring states, has slashed its broadband rates.

The company has removed all its sub-1 Mbps plans and replaced them with plans having speeds of 1 Mbps or more.

The monthly quotas have also been increased “manifold”, the company said without going into specifics.

The minimum download allocation has been upgraded to 10 GB per month, while the maximum allocation will be 1 terabyte (1024 GB) for its Rs 4,999 plan.

The bandwidth for its entry-level 10-GB plan is 1 Mbps and it will cost Rs 299 per month.

The high-end Rs 4,999 ‘terabyte’ plan will offer a bandwidth of 100 Mbps. Cable services will be free along with terabyte plan, Ortel Communications said.

Ortel, which is listed on the stock exchanges, is known for its unique business model that ensures end-to-end quality control.

Unlike other cable players like Hathway and Siti Networks, Ortel does not depend on ‘local cable operators’ for access to customers. Nearly all its customers are ‘direct’ customers — with the company owning the last mile as well.

This has helped the company move up in the value chain from a mere cable provider to a cable + broadband provider, even as others struggle with the transition. It has also helped it remain relevant in the face of relentless and fierce competition from DTH providers, who cannot offer broadband.

Despite its more expensive and time-consuming business model, the company has its cable signals crossing around 5 mln households in the eastern parts of India.

JIO THREAT

Ortel’s move comes even as reports indicate that Reliance Jio is conducting trial operations for a cable TV launch.

Jio has already announced massive plans to roll-out fiber-to-the-home services in 100 top cities of the country.

It is likely that India’s wired services market could undergo a consolidation similar to what happened in the US market in the 1990s. Today, the US wired services market is dominated by Comcast, which bought out most of the smaller players.

India has tens of thousands, if not lakhs of wired services providers. Some provide only cable, while many provide both cable and high-speed Internet.

The largest operator of wired broadband services is BSNL, followed by Bharti Airtel, and both rely on copper wires.

The largest operators of fiber-based services include Hathway Cable & Datacom, Act Fibernet, Spectranet and You Broadband.

Some of these players are seen as likely acquisition candidates for the Mukesh Ambani firm as it expands its FTTH network. You Broadband has already been acquired by Vodafone India.

Bharti Airtel too could enter the fiber-to-the-home business in the future.

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