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GTPL Hathway eyes 20-25% growth in broadband subscribers in FY20

The company is also strengthening its FTTH infrastructure.

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MUMBAI: Cable TV service providers are envisioning a future where broadband plays a major role and GTPL Hathway is also one of them. After a mild setback received from the new TRAI tariff order (NTO) implementation, the company is back on track to focus on the broadband sector in FY20. GTPL Hathway is working towards creating more home passes and better infrastructure based on a target of achieving 20-25 per cent increase in subscriber base.

“From the last six months, as the NTO implementation was going on, the focus was not totally on broadband. We still added a good number of customers and reached 325K. We are back on our strategy now and our focus is full on broadband, CAPEX side, infrastructure building, customer acquisition and geography and we are expecting that whatever we were not able to achieve in last 6 months, which we had planned, we are going to achieve that,” GTPL Hathway business head Piyush Pankaj said in an earnings call after Q4 results.

He noted later that the company is also highly focussed on building FTTX infrastructure while it currently has 1.2 million FTTX home passes out of 2.42 million. Out of the total 325,000 broadband subscribers, GTPL Hathway now has around 54,000 FTTX subscribers.

About 250,000 broadband subscribers are in the low-speed pack, where there is stiff pressure from wireless players. To retain these subscribers, the company will have to give discounts leading to a decline in the ARPU. However, this is being balanced by increasing FTTX subscribers through aggressive marketing. The main churn in broadband customers is also happening in the lower end as people are shifting to wireless. Overall churn rate is between 20-25 per cent but the same stands at 1 per cent in FTTH. So, the company is seeing high retention rate in the case of FTTH subscribers.

“In FTTH if we talk about 40 Mbps, we are charging around Rs 500 for 40 Mbps and for 100 Mbps it varies from Rs 650-750. For non-FTTH, according to the market, prices are different. Like for Surat market, prices are as low as Rs 150 and in Ahmedabad, market prices are as high as Rs 450. But average ARPU is somewhere around Rs 440,” Pankaj said.

In FY19, the company had Rs 155 crore CAPEX out of which Rs 51 crore was used for broadband. Pankaj mentioned that the total CAPEX would remain around Rs 160 crore with a focus on broadband.

“In the last 6 months, you will see that from 1.6 million home passes we have grown to 2.42 million home passes where the focus was more on infrastructure creation. The whole focus of management was on the new tariff order. So, we have created the infrastructure, but we have not taken the advantage of that for creating the customer or home connect. We are hoping that net 100K customers will come into the picture and mainly FTTH customers,” Pankaj commented.

“If you see Q4 net addition is almost 15K customers. So, earlier it was because we were completely upgrading our network and creating home passes. Last quarter was encouraging because 11K out of 15K was FTTH subscribers. Around 66-70 per cent is FTTH subscriber addition,” added GTPL Hathway promoter and managing director Anirudhsinhji Jadeja.

Pankaj also highlighted that the company launched Giga HD in the third quarter of FY19 but it did not progress due to NTO implementation. So, the product will be re-launched and pushed on the back of cash flow capability. According to him, the strategy is to provide multiple services by fusing cable and broadband businesses.

Notably, while Jio recently acquired stakes in GTPL Hathway, the latter will see what benefits can be taken on the synergies including in areas like vendor negotiation, infrastructure sharing. The company thinks the partnership will help it to propel and accelerate the business overall, especially on the broadband side.

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