DTH

Gopal Vittal’s take on the potential of Airtel’s home broadband, DTH biz

The bundled services reduce consumer churn dramatically

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KOLKATA: Airtel India boss Gopal Vittal remains bullish on the company’s home broadband business after adding the highest ever 2.15 lakh users in the third quarter of FY21. To exploit the opportunity in the growing segment, Airtel will leave no stones unturned to expand its footprint through a combination of direct rollout as well as local cable operator (LCO) partnership model.

“Home broadband category is at the cusp in terms of growth. Ever since the Covid crisis and growth of work from home, study from home, there has been an explosion of home broadband. The increased penetration of streaming services has also resulted in acceleration of home broadband,” Bharti Airtel India and South Asia MD & CEO Gopal Vittal said in an earnings discussion.

The telco’s home broadband entered another 74 cities in Q3 FY21, taking its total geography of operations to 219 cities, mentioned Vittal. Additionally, the company also rolled out the local cable operator model, which he called a significant “breakthrough” enabling accelerated growth in the home broadband segment.

“We have now got hundreds of local cable operators over 100 cities and planning to get about 1,000 cities in a year. We will look at a combination of where we can do our own rollouts in top cities, partner with local cable operators for the last mile in smaller cities,” he remarked.

Vittal went on to add that home broadband gives the company an opportunity to have a deeper relationship across the entire portfolio of mobility and entertainment. Airtel has witnessed that where it is able to bundle services with an integrated suite of products across entertainment, mobility, broadband, it observes a dramatic reduction in churn, increase in ARPAU (average revenue per account) or average revenue per home.

The Sunil Mittal-owned telecom operator posted a Rs 853.6-crore profit in the quarter ended December, and its revenue rose to the highest ever at Rs 26,518 crore.

However, despite adding a record number of subscribers, the home broadband revenue did not show concurrent gains. Bharti Airtel India and South Asia chief financial officer Badal Bagri attributed it to price revision in the segment. The adoption of downward revision was done in the third quarter majorly. The similar trend of adoption might be noticeable in the next quarter as well.

Vittal is optimistic about opportunities in the DTH business as well. According to him, the structure of the DTH industry is still attractive in the medium to long term. One of the reasons is, the price structure is much cheaper for linear TV compared to any other market. Moreover, there is a very fragmented cable market and Vittal added that the performance and response of cable operators is poorer compared to DTH players. Hence, the upside opportunity to convert from cable is high.

Last year, Airtel launched the One Airtel plan bringing DTH, postpaid, broadband under one billing. Although he did not reveal subscriber numbers, he added that the subscriber base is already material. Due to the bundled offering, users went for at least one extra service. The ARPU in the home broadband segment is upwards of Rs 500-600.

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