After a Stagnant Growth, Is The Indian Wireline Broadband Heading For A Stronger Revenue Opportunity?

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With all the buzz being garnered in by internet-savvy population of India, one may think that wireline broadband subscriber base in India has stalled. However, dramatically enough, the broadband service in India may have stayed back under the shades for long, but hasn’t yet diminished! In fact, even with a slower growth pace, Indian broadband services are moonwalking back into this space, with stronger revenue opportunities.

According to recent reports, that follows suit with ICRA notes, the home broadband and DTH market would see a greater role of the telecom operators with a higher subscriber base and revenue generation. Apparently, the wireline broadband subscriber base in India can see a growth of 100 million households by the financial year of 2024. This also hints at an increased revenue being generated that amounts up to Rs. 80,000 crore, as against the current figure that stands at Rs. 14,500 crores. Few things that may stall its most anticipated pace would be some factors such as competitive grounds or the need for capital expenditure.

The Resurrection of Broadband Services in India

The fact of the matter that still remains the same is that broadband adoption rate hasn’t really been in great shape, worse, has not kept its pace. In fact, the broadband subscriber base in 2016 was comparatively better than the present scenario. With the slice of factual truth right on the table, it is still remarkable how India’s broadband service could breach the 500 million milestones last year. Apparently, the broadband subscriber base has grown at a Compound Annual Growth Rate of 43.7 per cent in the past five years. That led to the current spectacle of 525 million subscribers!

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It’s a know-know thing that the Indian telecom space of the country hasn’t been quite stable over the past few years. Reasons vary from competition to intense decline in tariffs and much more. That being said, the active user base has somehow plateaued leaving the revenues at a declining space. This somehow hints at wireline broadband becoming the most adjacent respite that can be considered, in case, no overnight miracles are taken into account. Wireline broadband can drive next-level growth by amalgamating television and DTH services. Additionally, it can also provide diversification from revenues generated from mobile services.

Can Wireline Broadband Meet the Envisaged FTTH Demand?

“The wireline broadband penetration in India is much lower as compared to international standards and presents a significant opportunity for telcos. In India, the wireline broadband coverage would largely expand through the Fibre to the Home (FTTH) networks which have the capability to deliver high speeds with stability in the network. This will allow it to be the bedrock for content delivery to homes, thereby encompassing an umbrella of services including wireline voice, wireline broadband and television. Increasingly, the television industry is shifting towards content on demand and high-quality videos/content.” -Harsh Jagnani, Sector Head & Vice President – Corporate Ratings, ICRA.

To come to terms with expectations of ICRA, the Indian market needs to move forward to integrate wireline voice, home broadband and telephone services. With a combined ARPU of Rs. 875, the Telecom industry in India generates revenue of Rs. 14,500 Cr from bundled services that includes wireline voice, home broadband and DTH services. With bundling and such intense competition, the pricing can be expected to decline by nearly 40-50 per cent.

Mr Jagnani adds that at a penetration level of 30 per cent of households, one can expect the revenue contribution from such services to increase from 8 per cent to about 30 per cent.

The industry, including the supply chain, has somehow been able to cater to more people, more like, freshers joining in the digital parade.

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