Reliance Broadband: Services Coming......But When?

The endless wait for Reliance's retail broadband and IPTV services
continue. There has been no formal announcement of the launch of consumer
broadband services, renamed Broadnet. There is also confusion whether the
services are available or not. It
is a pity for Reliance Communication the way the entire project was
envisioned-with claims to offer speeds of up to 100 mbps to millions of users.
The ground reality after four years is that Reliance has around 65,000 broadband
customers as of March 2006!

Broadnet Services

There are no visible signs of the services' launch (Enterprise broadband
services are, however, available) even when Airtel and BSNL have lined up
aggressive expansion plans. Some prospective broadband customers Voice&Data
spoke to were clueless about the existence of Reliance's broadband services,
or Broadnet. The most shocking (and ridiculous) was the fact that prospective
customers were supposed to call up Mumbai customer care (022-30337777) to get
services anywhere in the country. Even customer care representatives were
clueless about the locations where Broadnet services are available. All Web
Worlds, renamed Reliance World, were equally clueless. (Reliance Worlds have all
the services being offered by Reliance Communications, and can, to some extent
be equated to Sify's dedicated chain of cyber cafes, but with a variety of
services like conferencing, e-ticketing etc).

IPTV Services

Apart from retail broadband, there is no clarity in the status of
Reliance's tie up with Microsoft to offer Next-Generation IPTV services.
Microsoft had offered its software platform combined with Alcatel's network
infrastructure, services integration and operational support. This was announced
exactly three years ago in 2003 but the trial, or pilot, continues without any
outcome. Part of the blame also
lies with Microsoft who promised to provide the software solution for IPTV
services to Reliance Communication. Bill Gates, during his last visit to India,
avoided a direct question asking about the status of Reliance's IPTV trials
and about the launch of services. Globally,
IPTV is far from being accepted as a mature technology. The total subscriber
numbers is below 3 mn and is mostly concentrated in Europe. Out of Microsoft's
12 partners, only Cablevision Mexico and Comcast have been able to launch IPTV
services till now. In a setback to Microsoft's IPTV plans, Telstra canceled
the field test in Australia. Last year, Swiscomm, on the other hand, also
postponed the commercial launch of its Bluewin TV service which was a major
blow.

The Reasons

According to the company's own admission in the investor presentation of
March 2006, the “initial focus will be enterprise,” probably seeing little
profitability in the retail business, given the low tariff and stiff competition
from BSNL who are offering services at a dirt cheap price. Clearly, lack of a
viable business model appears to be one of the most important reasons for the
delay in going all out with its broadband services.

The dilemma of whether to continue with a mix of CDMA and GSM, or to entirely
shift to GSM also had a role to play. As is obvious, all energies at Reliance
appear to be directed towards mobile services. If current news reports are
anything to go by, Reliance is planning to apply for license to operate GSM
services. Added to all this was the
split between the Ambani brothers, an important reason for delay due to the
transition time lost in handing over the communications business to ADAG.
According to sources, Reliance is looking at 2007 to launch its broadband
services. So it is time to wait for yet another year.

Sudesh Prasad

sudeshp@cybermedia.co.in