As per the declaration made by Reliance Jio, the newest and the fastest growing service provider in the country, is looking forward to acquiring both Den Networks and Hathway Cable and Datacom Ltd. The company is investing INR5,230 cr for the acquisition. Reliance Jio is hoping to pick up 66% stake in Den against INR2,290 cr and 51.3% in Hathway against INR2,940 cr.
Reliance Jio has already announced its Jio GigaFiber, which is a high-speed broadband of Jio with the fixed line has targeted 50 million subscribers. The company has aimed to offer its services across 1,100 cities in the country.
Now, as Reliance Jio has acquired two leading cable service providers, it is hopeful about speeding up its presence in the entertainment and media sector. As per the current statistics, Reliance Jio will surely win the race as the company will get hold of 24 million users who are connected through a home cable. According to the experts, almost 2 million of these users have a broadband connection as well.
The current data shows that approximately 18 million homes have a broadband connection and the market is ruled by BSNL, Bharti Airtel Ltd and MTNL. Reliance Jio can easily penetrate the market with the help of its local cable operators and Multi System Operators. Furthermore, the company can accelerate the launch of its Jio GigaFiber within a short time.
As Reliance Jio will notice a positive outcome from the acquisition, the broadband sector may notice a negative consequence. About 80% of the cost that the distributors get is basically the content. Reliance Jio will be one of the leading distribution platforms. Thus, the company will have the authority that is required to negotiate the cost. As a result, the distributors may not have the position to bargain for their income through subscription.