Sunil Bharti Mittal led telco, Bharti Airtel has come up with new strategies and plans for its broadband wing in the run-up to launch of Reliance Jio’s GigaFiber FTTH service. Now Airtel is expected to focus on premium customers in the top 100 cities of India instead of laying out an enormous fibre network in the country like Reliance Jio plans to do. Reliance Jio has announced that it would introduce GigaFiber in 1,100 cities of India, in contrast to that, Bharti Airtel will only focus on the top 100, and will cater to the customers who don’t mind paying a decent sum for excellent services. This move is similar to the one implemented in the prepaid segment, where Airtel has introduced minimum prepaid recharges of Rs 35 for its customers.
Airtel to Only Focus on Better Paying Customers
Going by a mint report, a person aware of the matter said, “Airtel’s plan is clear…to stay focused on the top 100 cities… stay focused on the high income, stay focused on high-rise buildings rather than horizontal deployment, as this business model is more economical and logical.”
Reliance Jio’s launch of GigaFiber is expected to bring a similar disruption in the broadband sector as it brought in the wireless industry. Also, on a related note, the Mukesh Ambani led telco has already started registrations for Reliance Jio GigaFiber with the aim of connecting 50 million homes. Back in July, Mukesh Ambani had announced that Reliance Jio GigaFiber would be the most massive greenfield fixed-line broadband rollout globally, which would be launched simultaneously in 1,100 cities connecting households, small and medium enterprises and more.
Like aforesaid, the former market leader will try to take a different way towards the broadband competition as it will only focus on better-paying customers in the tier 1 cities. Right now, the telco boasts of having 2.2 million wired broadband subscribers as per data concluded on September 30. The data from Telecom Regulatory Authority of India (Trai) shows that there are 18 million wired broadband subscribers across India.
The source further added to his statement, “As long as it is mid- to high-end of the market, Airtel will compete there very hard and match any prices offered by rivals.” He went on saying, “Two years ago, the company used to do half-a-million home passes every year. Last year it did one-and-a-half-million home passes. In 2018-19, Airtel is deploying 2.5 million home passes. In the next few years, the plan is to end up doing 8-10 million home passes. It already has 10 million home passes. This will make that a total of 20 million.”
It’s worth knowing that in the case of wired internet, the distribution to homes is done via an optical distribution frame with a single fibre which is dedicated to each customer and is named a home pass. However, this pass doesn’t necessarily mean a conversion.
Airtel Home Platform to Club Services Under One Banner
It is also Airtel’s belief that targeting the upper segment would be a logical move since home broadband is a costly exercise and requires more committed spending from customers in contrast to wireless subscribers.
Mahesh Uppal, director at communications consulting firm ComFirst India also remarked, “Given that deployment of fibre is time-consuming and expensive, Airtel’s strategy to focus on the high-end consumers makes sense as it will generate healthier cash flows. It seems wise for the company to not invest heavily in areas where returns are going to be too far away in the long run.” Further, to ensure customer retention Airtel has hinted towards development of a digital platform, Airtel Homes platform, where it will offer bundled services with more benefits to the users.
As per the source mentioned above, there is a slight overlap of the customers using broadband, DTH and wireless services. Thus Airtel’s focus will be on building a platform where users will be able to get benefits from all three services. The platform will provide integrated billing along with discounts. The person also added that a pilot is ongoing in Andhra Pradesh, where customers can buy all three services under the same Airtel Homes Platform banner. Additionally, the platform will not only offer Airtel’s services but will also club other services like home security and surveillance through a third party vendor.