Bharti Airtel has revised its Airtel Xstream Fiber plans in cities where the company offers its services through the franchise tie-ups with Local Cable Operator (LCO). The company in its first-quarter report for the period ended June 30, 2020 said that LCO model is live in 14 cities across India. The Airtel Xstream Fiber users in the LCO cities were earlier offered advance rental packs with the plans carrying speeds in the range of 16 Mbps to 300 Mbps. Further, the advance rental plans carried price tags in the range of Rs 599 to Rs 1599. Comparatively, the cities where the company offers its Airtel Xstream Fiber services directly were offered speeds in the range of 100 Mbps to 1 Gbps with the plans priced in the range of Rs 799 to Rs 3999.
Airtel Revises Xstream Fiber Plans in LCO Cities
The company now offers pan India plans in the cities where it earlier offered advance rental plans. However, Airtel does not offer the 1 Gbps plan in the cities where it offers its Xstream Fiber services through LCO players.
Airtel had earlier offered the advance rental plans in Alwar, Bareilly, Dehradun, Jammu, Katra, Nashik, Prayagraj, Rajahmundry and Sikar. In late June and early July, the company had expanded its advance rental plans to several cities including Gorakhpur, Jagadhari, Jhansi, Jodhpur, Kakinada, Kolhapur, Shimla, Thanjavur and Yamunanagar.
It has to be noted that Airtel currently offers four pan-India plans namely Basic, Entertainment, Premium and VIP. The Basic plan enables users to browse up to 100 Mbps speed till 150GB data for Rs 799 per month. The Entertainment plan at Rs 999 per month enables users to browse up to 200 Mbps speed till 300GB.
The Premium plan at Rs 1499 per month enables users to browse up to 300 Mbps speed till 500GB. The top-tier VIP plan enables users to browse up to 1 Gbps speed with no data limits for Rs 3999 per month.
Airtel to Expand LCO Model to More Cities in the Near Future
Gopal Vittal, managing director and CEO of Bharti Airtel for India and South Asia region, said in the first-quarter earnings call that Airtel is “excited” about the LCO model.
“So we have a standard toolkit where we are able to go out and actually work with the local cable operator in a particular town,” Vittal said in the earnings call for the period ended June 30, 2020. “And we give them a revenue share for basically laying the last-mile fiber, maintaining it, and everything else that is done on it, whether it is the router, it is the billing system, it is the plan, it is the customer relationship, all of it is managed by Airtel.”
Vittal added that the LCO manages the last mile fiber and thus receives a revenue share from the partnership.
“We have, like I said, a standard blueprint around and there have been several lessons that we have learned over the last nine to 12 months on how to actually master that blueprint to onboard these partners in a digital way so that they can get going and build their business,” Vittal said in the earnings call on July 30, 2020.
Vittal added that the LCO model is an “opportunity for entrepreneurs” to earn money with Airtel but at the same time “serve customers.”
“We do it at a much lower cost because the nature of the geographies that we cover outside the top 50 cities are very different,” Vittal said. “The buildings and the housing is more flatbeds and more distributed. And so for us to do it ourselves, would require a lot more investment, and it would be a far more challenged business model [sic].”
Vittal said that the company was able to get a “very good traction” with the LCO model due to the “lower investment.”
“We are now accelerating this quite rapidly because we believe that we have cracked the model, so it will start expanding over the next six to 12 months,” Vittal said.
It was said in the earnings call that the company believes that “there is a massive opportunity in smaller towns across India” in the home broadband segment.
“We are therefore doubling down on our partnership with local cable operators in such towns,” Vittal said.