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March 2019

INDIAN WIRED BROADBAND MARKET


TRAI has released its telecom market report for the quarter ending December 2018.

The regulator continues to define a Broadband Connection, as a permanently active connection delivering at least 512 KBps.


USER GROWTH

The number of wired broadband subscribers rose marginally to 18.17 million (end Dec 2018) from 18.09 million during end Nov-18 - growth rate of just 0.4% a month.

Clearly, the market is flat and going nowhere, despite the very low installed base, of less than 4% of the wireless broadband subscribers.

Table 1 indicates the relative market sizes for Wired, Wireless & Wi-Fi Broadband subscribers.









MAJOR PLAYERS

As on 31st December, 2018, the top 5 Wired Broadband Service providers were BSNL (9.17 million), Bharti Airtel (2.27 million), Atria Convergence Technologies (1.39 million), MTNL (0.78 million) and Hathway Cable & Datacom (0.78 million).


FRAGMENTED MARKET

The wired broadband market is highly fragmented. Local & regional players hold a significant market share ... almost as much as all the other players put together, excluding the leader - BSNL.



HATHWAY

The surprise entrant in the big 5 club, is Hathway, who has equalled MTNL's market share, and now controlled by Reliance JIO, is likely to surpass MTNL in the next report.

For the same (Q-3) quarter, Hathway's broadband subscription income increased 3% to ₹ 134.9 crore.

Hathway added 15,000 Homes Passed in Q3, taking its total Homes Passed to 5.54 million.

It added active 15,000 subscribers QoQ basis taking the total subscriber base to 780,000.

ARPU declined to ₹ 662 from ₹ 672 a quarter ago. The new customer ARPU is slightly higher at ₹ 700 excluding taxes.

Since Hathway (and DEN) continue to operate as separate companies with distinctly different public share holdings, Hathway will continue to operate independently, and even compete with JIO in all its markets.




NERVOUS MARKET

Despite the fragmented and local nature of the wired broadband service providers, existing operators refuse to invest in their business, preferring to first understand JIO's entry strategy.

JIO's entry is expected not only to crash ARPUs, but also offer free Wireline telephony - a service that smaller Broadband ISPs cannot provide.


GROWTH

An ICRA (formerly Investment Information and Credit Rating Agency of India Limited) report says India's wireline broadband subscribers can increase to 100 million (30% penetration) households by 2024 (5 years), expanding revenues to ₹ 80,000 crore against ₹ 14,500 crore currently.

In 2024 combined APRUs for an umbrella service of a wired Phone line + home broadband + TV could be ₹ 875.


TECHNOLOGY

DoT has effectively killed Broadband delivery through Cable TV networks, thanks to its years old, skewed order, levying an additional 8% AGR broadband tax, even on Cable TV revenues of any CATV + Broadband composite network.

Wired broadband coverage will now largely be via Fibre To The Home (FTTH) networks, delivering 100 MBps+ speeds.

This will make FTTH the universal enabler for wired voice, wired broadband & TV. n