November 2015: ACT, Airtel lead subscriber additions for wireline broadband in India

BENGALURU: Until 30 October, 2015 (Oct-15), ACT Broadband was leading in wireline broadband internet subscriber additions in India. November 2015 numbers released by the Telecom Regulatory Authority of India (TRAI) indicate that as on 30 November, 2015 (Nov-15), both ACT and Bharti Airtel have added 2.3 lakh subscribers (subject to a granularity of 10,000) each in the period between 31 December, 2014, hence 1 January, 2015 (Dec-14,) and Nov-15. In terms of wireline internet subscription numbers, Airtel had 16.4 lakh subscribers as on Nov-15, almost double the 8.4 lakh subscribers that ACT Broadband had.

The top five players in India in the wireline broadband internet space in pecking order are the public sector Bharat Sanchar Nigam Limited (BSNL), Bharti Airtel Limited (Airtel), public sector Mahanagar Telephone Nigam Limited (MTNL), Atria Convergence Technologies Private Limited (ACT, ACT Broadband) and You Broadband (You BB). Among these five, only BSNL and Airtel can be termed national players at present. BSNL, Airtel and MTNL also provide wireline and mobile services while Airtel also has a direct to home (DTH) segment. ACT started off as an MSO with operations concentrated in a few major cities and towns located mainly in South India. It started internet services (ACT Broadband) a little later and has grown its broadband internet subscriber base over time, to the extent that it is quite likely the biggest private wireline broadband player in South India. You BB offers broadband operations in a few cities in Maharashtra, Gujarat the NCR region Andhra Pradesh and Karnataka. 

Overall, November 2015 saw 140,000 wireline subscriber additions, of which 30,000 were added by Airtel and 20,000 by ACT; 10,000 by You Broadband, while the public sector behemoth BSNL saw a decline of 10,000 subscribers. MTNL did not have any new additions, taking the contribution of the top five wireline broadband players to 50,000 (or 35.57 per cent of overall additions) during Nov-15.

Note: (1) 100,00,000 = 100 Lakh = 10 million = 1 crore

(2) TRAI reports indicate data in millions of numbers up to 2 decimal places. Hence it is assumed in this report that a figure of 0.47 million (4.7 lakh) subscribers for You BB for July-2015 would be granular to the nearest 10,000. While percentages perforce have been mentioned up to two decimal places, the accuracy may vary, depending upon the exact number.

(3) Industry sources say that TRAI numbers in the case of ACT for May-2015 are incorrect at 0.66 million and the correct number would be 0.693 million. This report considers the number as 6.93 lakh or 0.693 million.

(4) MSOs have a number of subsidiaries and alliances, hence broadband numbers are split as applicable. The consolidated subscription numbers of these entities could be larger. Hathway is a case in point.

(5) Ortel’s numbers for Q3-2015 have been estimated from the numbers released by it for Q1-2015, Q2-2015, Q4-2015 and FY-2015.

(6) The term ‘operating revenue’ in this report indicates ‘total income from operations.’

Please refer to Fig 1 below. 

Over an 11 month period, the subscriber numbers share of the top five wired broadband players in the country has reduced from 88.45 per cent from Dec-14 to 85.56 per cent as on Nov-15. During the same period All India wireline internet subscriber base has grown 7.11 per cent from 153.2 lakh to 164.1 lakh.

The average all India subscriber growth rate per month for the period 1 January, 2015 to 30 November, 2015 was 0.62 per cent. During the period Dec-14 to May-15, the maximum growth was 0.46 per cent in Feb-15 with 70,000 net new broadband connections. Apr-15 saw nil growth rate and witnessed a decline in growth rate of 0.07 per cent in subscribers in the case of the top five wireline players in India. The average subscriber growth rate in the first five month period of the previous year was 0.31 per cent per month. The average subscriber growth during the next six month period including June-15 until Nov-15 was 0.89 per cent, with the highest in Aug-15 at 1.01 per cent. Please refer to Fig 1A below. Overall, the all India subscriber base has been growing at a faster pace than growth rate of the subscriber base of the top five wireline internet service providers in India.

Fig 2 below indicates the subscriber details of the top five wired broadband internet service providers. While ACT has shown the highest growth during the period in this report, BSNL has had the steepest fall in subscription numbers during the first 11 month period of calendar year 2015. ACT’s share of All India wireline broadband internet subscribers has increased from 3.98 per cent at the start of the year to 5.12 per cent until Nov-15, while BSNL’s share has declined from 65.14 per cent in Dec-14 to 60.51 per cent in Nov-15. By its very stagnancy, MTNL’s share of All India wireline broadband internet subscribers has reduced from 7.38 per cent to 6.89 per cent during the same period. Airtel’s share has increased from 9.20 per cent to 9.99 per cent, while You BB’s share has increased from 2.74 per cent to 3.05 per cent during the same period.

As is obvious from Fig 1A above, the share of new subscriber additions by the top five players has been reducing. MSOs in India have started providing internet services on the back of their cable networks using Docsis technology. In general, they have started reporting double digit YoY increase in internet subscribers and revenue. Three of the major MSOs and a regional MSO, whose results are available in the public domain for the quarter ended 31 December, 2016 (Q3-2016 current quarter) have been showing steady growth in their broadband segment over the past few quarters.

In this report, let us look at how these television cable industry players have performed in the broadband space in Q3-2016. The four are: Hathway Cable and Datacom Limited (Hathway), Den Networks Ltd (Den), Siti Cable Network Limited (Siti Cable), and the regional player Ortel Communications Limited (Ortel).

Hathway’s consolidated broadband subscribers increased by 50,000 or 9.31 per cent more QoQ, in Q3-2015 to 5.67 lakh. Hathway’s Broadband subscription revenue in Q3-2016 increased 53.4 per cent YoY to Rs 78.7 crore as compared to Rs 57.7 crore and increased 9.5 per cent QoQ as compared to Rs 57.7 crore. Hathway’s broadband standalone ARPUs increased 3.8 per cent QoQ from Rs 658 to Rs 683.

Siti Cable Broadband revenue in the current quarter almost doubled (grew 99 per cent) at Rs 13.9 crore (3.8 per cent of OPREV) as compared to Rs 7 crore (3.2 per cent of OPREV) in Q3-2015 and increased 49.5 per cent QoQ as compared to Rs 9.3 crore (four per cent of OPREV). Broadband subscribers in the current quarter increased 17 per cent to 1,07,000 from 91,450 in Q2-2016.

Den has also ramped up its broadband subscribers by 33.3 per cent to 76,000 in the current quarter from 57,000 in the immediate trailing quarter. The company’s broadband segment revenue increased by over five times YoY (5.5 times) at Rs 11.96 crore (3.4 per cent of TIO) as compared to Rs 2.17 crore (0.8 per cent of TIO) in corresponding prior year quarter and increased 58 per cent QoQ as compared to Rs 8.23 crore (three per cent of TIO). The segment’s YoY operating loss increased to Rs 19.57 crore as compared to Rs 12.37 crore, but reduced QoQ as compared to Rs 23.07 crore. The company says that broadband ARPU has declined by Rs 10 in the current quarter to Rs 760 from Rs 770 in the previous quarter.

Den’s Broadband Post Activation EBIDTA in Q3-2016 was negative Rs 16 crore as compared to the negative Rs 11 crore in Q3-2015 and negative Rs 20 crore in Q2-2016.

Ortel’s broadband segment reported 16.3 per cent higher revenue at Rs 8.28 crore as compared to Rs 7.12 crore in the corresponding year ago quarter and 1.7 per cent more than the Rs 8.14 crore in Q2-2016. The broadband segment reported an operating profit of Rs 4.78 crore in the current quarter as compared to Rs 4.52 crore in Q3-2015 and 9.1 per cent higher than the Rs 438 crore in Q2-2016.

Ortel’s broadband customers in the current quarter grew 16.2 per cent YoY to 67,709 as compared to 58,277 and grew 6.4 per cent QoQ as compared to 63,663. Broadband ARPU in Q3-2016 was higher at Rs 396, in Q3-2015 it was Rs 394 and in Rs Q2-2016 it was Rs 395.

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