Reliance Jio has already sounded the trumpet for a new broadband tariff war in the telecom sector, as such with the Mukesh Ambani telco all set to step in the home services industry, Airtel is already on the task of increasing its stronghold in the home broadband segment. Airtel has been a renowned player when it comes to broadband. Therefore the telco is chalking out strategies to hold onto its existing wired connection subscriber base while continuing to add new customers to its pie. Airtel said in a statement “We have stepped up investments on home broadband. We do 400,000-500,000 home passes a year. Last year we did almost 2 million home passes.” With this vision in mind, the Sunil Bharti Mittal led telco is eyeing the goal of significantly increasing its broadband subscriber base.
While Reliance Jio is going to allocate a significant chunk of funds to tier II cities in addition to metro cities, Airtel will mainly focus on metropolitans like Delhi, Bengaluru, Mumbai, Kolkata and Chennai. For its GigaFiber services, Jio will be rolling out its broadband plans in 1,100 cities while Airtel will target a large user base in the towns with a massive population. This way Airtel plans to increase its home passes by double this year.
According to a report by Livemint, with Reliance Jio already stepping in the game, the competitors are expecting a drop in ARPU (Average Revenue Per User). Airtel has really sensed the impending tussle which lies ahead of the telcos, as Reliance Jio has already started testing out its services in Mumbai and New Delhi. The Mukesh Ambani led telco is apparently charging Rs 4,500 as security for the home connection in these two cities.
The above-mentioned person further added “Airtel has under-invested in home broadband so far...the investment behind this segment will be in the ballpark range of few hundred crores out of the overall capital expenditure of $4 billion by Airtel in 2018-19.”
According to current statistics, Airtel provides 100 Mbps connection to 2.1 million users in India spread over 89 cities. In the ‘Home services’ segment, as of last quarter, Airtel noted that their ARPU was Rs 929 which translates to a 12.6% year-on-year decline. Also, 94 percent of its ‘Home Services’ customers are made up by Airtel broadband users.
To double down on its broadband strategy last month Airtel introduced a new plan priced at Rs 2,990 which will give the users a speed of 300 Mbps with 1200GB of data. Airtel will also provide free access to its OTT apps like Wynk Music and Airtel TV for the users who opt for this plan.