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Wireline Broadband Subscriber Base Can Increase 100 Million In India

According to ICRA, the wireline broadband subscriber base can increase to 100 million households by FY2024, and the revenue generated from these segments could expand to Rs. 80,000 crore as against Rs. 14,500 crore now.

Harsh Jagnani, Sector Head & Vice President – Corporate Ratings, ICRA, says, “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.

” ICRA said that the penetration of wireline broadband is low in the country as of now and the subscriber base has not seen any meaningful traction over the years.

As of September 2018, the subscriber base was only 18 million, accounting for less than 7 percent of the total households which is much lower than 44 percent in Brazil and 99 percent in France.

The report also pointed out that internationally, in order to monetize the wired broadband networks (copper or FTTH) better, players in many mature markets like USA, UK, Germany offer integrated services – television, wireline services, and home broadband through a single tariff plan, at a significant discount to the individual services. A similar trend is expected to play out in India as well.

ICRA also said that at present, the telecom industry generates revenues of Rs. 14,500 crore from wireline voice, home broadband, and DTH services, with the combined ARPU of Rs. 875.

With bundling and higher competition, the pricing is expected to reduce significantly, by as much as 40-50 percent. High price elasticity and expanding demand for data mean wireline broadband subscriber base can witness strong growth, similar to what was observed for wireless broadband.

Jagnani further said, “Even at a penetration level of 30 percent of the households, this could translate into subscriber base of 100 million by FY2024, generating revenues to the tune of Rs. 80,000 crore. Correspondingly the revenue contribution from these services is expected to increase from current 8 percent to around 30 percent on an expanded revenue base.”

But the key watch-outs for the industry would be the extent of competitive intensity, and the need for capex. As in case of wireless where the pricing levels have become non-remunerative, a similar impact on the wireline broadband remains a risk. Also, as of now, the industry has a fiber network of 17,20,000 route km. Much deeper and wider penetration is required to be able to meet the envisaged FTTH demand, which will encumber the financials of the telcos.―Gizbot

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