Vodafone Idea (Vi) is investing and focusing on its broadband business which is a good sign for the company's future. Investors worried about never getting their money back from the business can also relax since the company just showed a positive by adding net subscribers in February 2021.
Note that the fixed broadband market is still in its early days in the country. India is a big market with millions of potential customers for Internet Service Providers (ISPs). All that the ISPs need to focus on is providing services at reasonable rates with an above-average quality of service, and they will literally make billions of rupees.
Vodafone Idea might be getting around the fact that it needed to upgrade its broadband business when all the other private operators, including Jio and Airtel, were doing so for a long time.
Why is Broadband Business Important for Vodafone Idea?
Vi doesn’t have the strongest 4G subscriber market share in India despite offering excellent plans. But the company does have the potential to reach a point where it can go head to head with Airtel and Jio. However, that time isn’t anywhere near, and for Vi to keep going, it needs to focus on generating as much revenues as possible.
The telco operates its broadband business through a subsidiary called ‘You Broadband’. You Broadband used to offer low-speed plans for very high monthly cost in select circles of India where Jio, Airtel, Excitel, Hathway, ACT, and other local ISPs were offering cheaper plans with more benefits.
But the company recently announced new broadband plans for multiple cities. What’s interesting about these plans is that they are all standard, meaning all of them cost the same regardless of whichever city you are in. Further, they are head-on with the plans of other operators with more monthly fair-usage-policy (FUP) data.
It is not like Vi can’t improve broadband plans even further; there’s always room for improvement. But what matters is the intent, and it is evident that Vi isn’t going to ignore its broadband business anymore.
The company is in the process of launching the new unlimited broadband plans for other cities as well. We don’t have any word on how soon that will happen, but we expect it not to take a lot of time.
Broadband Might be a Goldmine for Vi
Since broadband users are only expected to grow from here, Vi has a golden opportunity to introduce something in the market that no other ISP is offering to its users. The company has an opportunity and the resources to be the Reliance Jio of broadband business in India.
The company can bundle in other benefits with its You Broadband plans, including Set-Top Boxes (STBs), postpaid/prepaid connections, or something we can’t even think about.
Vi’s got the potential to launch amazing industry-unique offers such as ‘Binge all Night’ or ‘Weekend Data Rollover’. We don’t see why the company can’t do this with its broadband business as well.
One thing that needs to be considered though, broadband business is a slow journey. The company will have to invest heavily before it can get serious returns out of it. Nonetheless, the new plans from Vi stamps the intent it has for its future, which is a positive one, and the telco is ready to invest for the long term.
