Essel Group which owns Zee Network, leading DTH service Dish TV & MSO operator SITI Digital has now signed a deal with state run telecom operator BSNL to offer broadband services through VNO. As a VNO or Virtual Network Operator; Essel Group can use their brands to offer broadband & similar services by purchasing bandwidth from BSNL.
"An MoU between BSNL & Essel Group is signed today with areas of mutual interest between the 2 companies, following areas of interest identified Acquiring & creating new broadband customers using BSNL through VNO route" BSNL Chairman and Managing Director Anupam Shrivastava tweeted.
This partnership will help both the companies as Essel Group can offer broadband services to their SITI & Dish TV customers across the country which would help them to offer bundled offerings while BSNL would gain from selling bandwidth. Essel Group would also partner with BSNL in new emerging areas like Government's newly announced smart city project. On the other hand, BSNL will use Zee TV content to offer video on demand services for their mobile & broadband customers.
Other Developments: Essel Group owned Dish TV & SITI Cable formed a common entity named 'Comnet' which will help synergize the strengths of both the organisations in dealing with broadcasters.
Here's why the deal is a win win for both the companies?
For BSNL, it was a great opportunity to get more revenue through sharing bandwidth which would help the operator to cut down losses on their turn around period. Also, Essel Group through its subsidiaries already owns a larger market share in TV & broadband space which can generate more cash flow as more customers means more money. Though the pricing power would be in the hands of Essel Group, every little penny is good news for the struggling telco. On the other hand, VNO route can cut down costs as it doesn't require to setup customer desk, so BSNL can use the revenues for improving their networks.
For Essel Group, the deal helped them to counter upcoming threats like Reliance Industries owned Jio which also has TV business & great fibre network to offer broadband services to the end users. Also as Jio already holds a MSO license, that can surely pose a threat to Essel Group's SITI cable business. So, a deal before Jio launch will help Essel Group to re think their strategies. While we have already reported Jio would soon offer Jio TV, a rival to Dish TV offered by Essel Group; now the deal with BSNL enabled them to offer IPTV solutions to premium Dish TV customers.