Cable operators boost Bharti Airtel’s broadband growth

Monthly broadband additions by operator

Bharti Airtel’s new strategy of tying up with cable operators has helped the company significantly speed up subscriber acquisitions in its wired broadband business and narrow the gap with Reliance Jio, which continues to be India’s fastest growing provider.

Since introducing a new, collaborative model of joint roll-out with cable operators, Bharti Airtel’s monthly wired broadband additions has jumped from around 10,000-20,000 to close to 1 lakh.

According to the latest numbers available, Bharti Airtel added 90,000 new wired broadband subscribers each during the months of January and February this year, following additions of 80,000 new wired broadband users in December and 60,000 in the month before that.

In comparison, the company added only 10,000 new wired broadband subscribers in January of last year and only 20,000 each in February and March.

It was in August last year that Airtel announced that it had ‘cracked’ the model as far as working with cable operators to expand its home broadband services was concerned.

Before this, Airtel’s home broadband service used to expand at a snail’s pace, adding 10,000 or 20,000 users per month. Despite operating for around three decades, the company had managed to establish its wired broadband service in less than 100 cities.

This was partly because it was skeptical about the prospects of wired broadband in India due to the high level of investments required. Moreover, the copper-based DSL technology used by Airtel and BSNL involved a high degree of maintenance. Hence, it was impossible to expand the service without also hiring an army of technical workers to maintain the network.

However, the Gurgaon-based company was forced to recrunch the numbers last year when rival Reliance Jio started aggressively rolling out a fiber-based broadband service.

Starting with monthly additions of only around 30,000 in March and April of 2020, the Mukesh Ambani-led company soon accelerated its roll-out to 70,000 in May last year and crossed the 1 lakh/month mark in July.

It then cut its tariff sharply, offering unlimited 30 Mbps connectivity for just Rs 399 and undercutting rivals like Airtel.

This helped Jio sign on a record 2.7 lakh new wired broadband subscribers in September — the month when the new tariffs came into effect.

Since then, Reliance Jio Fiber has consistently added around 1.8 lakh new subscribers every month.

For Airtel, the ramp-up has been slower, as it finalized its partnership model only around July-August of last year.

In August, the company managed to increase the pace of subscriber additions to 40,000, and has then consistently scaled it up to nearly 1 lakh/month since then as it struck more and more partnerships with cable operators.

Airtel’s partnership model — under which it shares a portion of subscriber revenue with cable operators in lieu of using their last-mile fiber network — is now estimated to be bring in around half of its monthly net additions.

Both Airtel and Jio are riding the demand for consistent and reliable broadband connectivity by employees working from home and students trying to attend their classes from laptops and mobile phones.

The strong demand for such services has also proved to be a blessing for enterprising local cable operators who have fiberized their networks rapidly.

Meanwhile, smaller, organized players — such as ACT and Hathway — have not been able to match up to the performance of their big brothers due to various factors, including limited geographical footprint and business model limitations.

Like Reliance Jio, ACT too delivers its services through own last mile connections. However, unlike Jio, ACT does not have a pan-India fiber network, and is restricted to certain tier 1 and tier 2 cities, which has restricted its growth to 20,000/month.

Meanwhile, the No.1 player, BSNL, is weighed down by its legacy network infrastructure and design.

The majority of its broadband subscribers are still on an old-generation, copper-based DSL technology, though the company has made much headway in fiberizing its last mile in certain states like Kerala and Karnataka.

Nevertheless, as Jio, Airtel and local cable operators spread their fiber networks, consumers are leaving BSNL’s copper network in droves.

Wired broadband users in India, by operator

According to the latest industry numbers, BSNL lost a whopping 8.7 lakh broadband subscribers in February of this year, bringing its total down to 6.82 million (68.2 lakh).

With this, the company has lost 1.29 million (12.9 lakh) wired subscribers in the 12-month period between March 2020 and February 2021.