Industry
Wired internet targets content, TV services to double presence
Summary
- Data from Trai showed that since the pandemic, growth in uptake of wired broadband services has risen to over 20% per year, from around 2.5% before covid.
Mumbai: The wired internet industry is betting on growing its user base two-and-a-half times to 100 million in the next five financial years as multiple-device households and an increase in streaming video content drive demand for high-speed fiber connections. It is also banking on attracting many of the 63 million subscribers of D2H television by offering internet protocol television (IPTV) and wired broadband as a bundled service.
Wired internet services experienced a rebirth of sorts during the pandemic as work-from-home mandates drove demand. Subscriber growth rose from 2.6% in FY19 to 22.9% in FY23. While growth slowed a bit to 19.6% in FY24 as workers returned to offices, the low penetration of wired broadband leaves ample growth of growth, said industry executives and analysts.
As of 31 March, wired broadband services were available to less than 3 in 100 Indians, as per the World Bank Data Catalogue. Mobile data users numbered around 850 million.
“We have increasingly become dependent on stable internet for a wide range of services such as payments, education, healthcare and more, thanks to India’s uptick in mobile data-driven services. For wired broadband, there will be an equivalent uptick too, as more and more cities beyond the metros start demanding reliable, fast internet connections at home," said Vivek Raina, chief executive of Excitel Broadband Private Limited, which has close to a million subscribers.
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The top two telecom operators — Reliance Jio and Bharti Airtel — account for more than 60% of all wired broadband usage in India. State-run Bharat Sanchar Nigam Limited (BSNL) and Mahanagar Telephone Nigam Limited (MTNL) have a 25% market share, and Tata Teleservices, 7.5%. Companies such as Fibernet and Excitel Broadband vie for a piece of the remaining pie.
Reliance Jio and Bharti Airtel did not respond to emails seeking comment. Atria Convergence Technologies, which operates ACT Fibernet, one of the largest private wired broadband services, could not be reached for comment.
“We have now also learnt how to consume data at a larger scale, driven by content at scale—and [this] is clearly reflected in the ramp-up in wired broadband subscribers in the country," said Siddhant Cally, research analyst for telecommunications in market research firm, Counterpoint India. “It is well within projections that fixed broadband users will hit 100 million users within the next three to five fiscal [years]."
Cally said telecom operators, along with for-lease internet service providers, are increasingly laying down fiber broadband cables since these are necessary to connect 5G infrastructure and data centres to cater to the enterprise market. Consequently, consumer internet services will also become available in more places, he added.
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He added that new fix-broadband customers will be mobile-first users looking for a more stable and robust connection for things like working from home. “Wired networks are considerably more stable and offer lower latency connectivity to several devices at a time. [The increase in such connections] shows India is growing as an internet consumption economy ," he said.
The TV opportunity
The other big factor is the increasing adoption of IPTV television as broadcasters offer live internet streaming of linear television content.
“We are now targeting D2H television broadcasting as a sector," said Excitel’s Raina. “This will further expand our headroom in terms of target users and revenue expansion, where we can replace old routers and optical-cable TV boxes with IPTV smart boxes powered by the Android operating system."
Analysts said Bharti Airtel and Reliance Jio have a presence in D2H television and can take advantage of this by offering IPTV and wired broadband as a bundled service.
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“Given that they are already offering a single box that operates as a router and television set, it is possible that in the next decade, Jio alone will scale up to 100 million fixed-broadband subscribers," Cally said.
Still, other firms in the industry have ample expansion potential for wired broadband, said Raina, who expects to double Excitel’s user base and revenue in the next three financial years.
“The one key challenge for wired broadband is that we ideally operate in planned cities to lay down the physical fiber and wires," said Raina. “Even if we remove half of India’s unorganised towns – tier-2 and beyond – we’re left with 150 million households to serve. Accounting for market churn and other factors, wired broadband as a sector can easily serve 100 million households in the immediate future — which leaves us with a 2.5x upside in terms of market expansion."
