DEN Networks aims for 70,000 broadband subscribers by Q1 2020

DEN Networks aims for 70,000 broadband subscribers by Q1 2020

The company is adding 20 more cities in Q2 2019

SN Sharma

MUMBAI: Way before Jio’s announcement of its broadband GigaFiber venture, MSO DEN Networks revealed its plan to explore the opportunities in the market. Following the rollout of broadband service in 28 cities by end of Q1 of this fiscal year as a part of its 100 cities plan, it has also signed up the agreement with 48 more cities. In terms of rolling out the service, the company is adding 20 more cities in Q2.

Talking to investors in an analyst call, DEN Networks CEO SN Sharma informed that cable partners are investing equally well with the same kind of enthusiasm. After the launch of Jio GigaFiber, the company mentioned it would be working with LCOs. Sharma was asked about the impact of this on the partners on ground to which he debunked the possibility of ant negative impact on LCOs. “The announcement of the telco has further brought in standards you see that has helped us in regularising this tenders and qualities to be followed by the gentlemen, i.e., our cable partners and that is helping the entire business environment,” he said. In addition to that, he also mentioned that hardly 6.7 per cent of the penetration level has been achieved in the market as of now.

Emphasising on the enthusiasm in the industry, he also said, “I am also surprised with the kind of enthusiasm that I am coming across and very soon we will be signing up with another 40-50 odd partners and then followed by LCOs and in Q2 we are supposed to deliver another 20 cities and I am quite confident that my team will give and overdo whatsoever assigned to them but that will be it is better that we talk at the end of Q2.”

As DEN Networks has recently rolled out its service, it will still now take time to pick up due to the lengthy process. Going through LCOs to approach subscribers and then the subscriber coming back for the wired service takes a long time. In that context, rather than giving a high prediction, Sharma said the company hopes to deliver close to 40,000 to 50,000 subscribers by March 2019 and by the end of Q1 of next year to touch close to 70,000 subscribers. He predicts a ramped growth in FY 2020 as then penetration level will reach to 10 per cent. MSOs enable the homes where cable fibre already exists.

“In the 28 new cities we have actually enabled one million home passes which are already there with us on the cable front so we are already reaching there but how many of those would actually get converted would depend on the interest levels. The moment the interest level comes in we obviously hook them up. We have already hooked up 8500 customers till now so we should be able to ramp it up,” DEN Networks CFO Himanshu Jindal said. For the 100 cities under the plan, 5 million set top box installations will be done.

DEN’s 100 cities model is based on Rs 500-550 ARPU while in the existing 28 cities, it is capturing an ARPU of Rs 562. Sharma denied commenting on the upcoming tariff war as the pricing model from telcos is still not revealed. But indicating the price could go down, he mentioned that DEN can easily sustain till Rs 500 ARPU. It is only in metropolitan cities like Mumbai and Delhi that consumers are already experiencing 100 MB data speed. There are cities where the speed being demanded is 5MB, 20MB, 50MB. So there’s a large chunk of broadband-deprived internet users across the country.

“So in any case the ARPU of Rs 500 where you are delivering 50MB speed and unlimited data is not a very conservative figure, I would say it is a very aggressive ARPU that we have put across and we should be able to justify it as things unfold and as times will come, we will handle the situation. In any case, the LCO partner is quite confident and they are coming forward and investing so that also adds the positivity with us,” Sharma’s tone reflected the preparedness for upcoming battle.

However, the company has claimed to undertake a very low capex based plan. In the current year, the company will not spend more than Rs 30 crore unless it experiences more than the expected rush of this subscriber base which could mean some minor changes in the network.