Why JioFiber’s speed based pricing gives it an upper hand against rivals

When Jio started its 4G services, the key proposition that allured most of the consumers, was price. In fact, at that point of time, Jio was synonymous to a free meal. This perception is still there to a certain extent. Although nobody gets it for free now, a general perception is that Jio is spreading like wildfire because of its affordable pricing. Well, that might not be the case always.

After its successful journey in 4G to become the No.1 4G cellular operator in India, Jio is all set to make ‘fiber’ internet mainstream in India. India’s gap with global markets with regards to fiber was only widening until Reliance announced its broadband ISP JioFiber. India hardly had any organised FTTx (a broadband network) presence. With work, in fact, life from home, internet has become all too important for families and, people are looking for better and stable connectivity options.

Before JioFiber, there weren’t many, other than in metros. Majority of towns and cities across the country had a monopolised market where customers had no option but to choose the locally available ISP even if it were inefficient.

Jio announced new plans on August 31st for its JioFiber services. Well, its usual for any operator to announce new plans. So what’s so different in these plans that needs some attention?

Firstly, these plans may not be the cheapest available in the market. So, the whole premise of Jio being the cheapest is no longer valid. For example, in many smaller towns and cities, BSNL and local ISPs are offering plans cheaper to what Jio has announced.

The second and most important thing which I see on these plans is, Jio has made speed as the differential factor for pricing. Faster speeds are pricier. Of course for higher plans, there are premium apps bundled as well determining the price. Now that’s a very bold take.

Speed has always been controversial and a bone of contention between a user and the operator. Users have never been able to get the speed which is promised by the operator. Then, there is an issue measurement – Which tool to use? How credible is the tool? Is it influenced or managed?

If Jio is keeping speed as the factor to determine the price, that means it needs to ensure that it is delivering exactly the speed for which it charges. Otherwise, there will be a multitude of customer disputes to be handled.

Personally, Jio seems to have evolved to a certain level that it can take this risk of having plans as per speed and not the amount of data being consumed. This is based on the experience and facts to support with. Compared to this, other operators are still hiding behind the matrix of speed and the amount of data allowed to be consumed in a month.

This matrix always confuses the consumer. Many a times, the consumer is unable to find the right plan, which means most of the times, a user pays more than what is required. With Jio’s new plans, it becomes easy for a user to decide just on what kind of speed is required. Now the speed requirement will not be determined just by the type of content the user is going to consume, but also by the number of concurrent users expected at home or office.

To support my argument of Jio’s platform and technology maturity, below I share screenshots of JioFiber’s consistent speed test results on two very popular testing apps and compare it with a competitor (Airtel’s) fiber service which has substantially varying results for speed.

(The author is founder and chief analyst, techARC. Material reproduced from author’s personal blog.)