- The service provider faces declining ARPU as competition mounts in the industry
- The provider will make use of bundled offerings to better its ARPU and thus increase margins
GTPL Hathway, the major cable TV and broadband service provider has announced that in the first quarter of FY20, it will be reintroducing its Giga HD service. To recall, the service provider had stopped its Giga HD service for two months due to the implementation of the tariff order mandated by the Telecom Regulatory Authority of India (Trai). It is worth noting that GTPL Hathway’s Giga HD service combines broadband and cable services in a single package. There is no doubt that the introduction of the new tariff order by Trai has disrupted the working inside the cable TV companies as the providers rush to ready themselves for the new pricing regime.
GTPL Hathway ARPU Takes a Hit
GTPL Hathway’s business head of video business and chief strategy officer, Piyush Pankaj, in the Q3 earnings conference told analysts that once the consumers make all the choices for the new tariff regime, the provider will take the data about which packs are selling in the market. It would then combine it with the broadband offerings to start the Giga HD service again. The executive also informed analysts during the Q3 earnings conference saying that the ARPU (Average Revenue Per User) of the company had also taken a hit during this time because of the competition from other operators. The ARPU in this period came down from Rs 450 to Rs 430, thus rendering the effect of the addition of 11,000 new broadband subscribers negligible on revenue.
Pankaj said, “We are also providing 5 Mbps, 10 Mbps, 15 Mbps service in the market and there the competition is very high from the wireless side, and the rates are really low right now and to retain the customers we have to give discounts, and the schemes and all those things are pulling down overall ARPU.” Television Post reported this news.
Bundled Offerings Will Boost ARPU: GTPL Hathway
GTPL Hathway MD Anirudhsinh Jadeja remarked that bundled offerings are a significant way through which the company would convert its customers to GPON to grow the ARPU. He also informed that during the migration process to the new Trai regime, 85% of subscribers have gone on with the suggested DPO packs, and only 15% have curated their channel packs. He also added that the new tariff order would settle by March and by the first week the situation will be clear.
Speaking about the margins for the MSOs, he said, “In accounting term, subscription revenue and pay channel are going to increase, and overall placement is going to come down a bit, but overall impact going to be positive at a margin level for MSOs.”a
Arpit spends his day closely following the telecom and tech industry. A music connoisseur and a night owl, he also takes a deep interest in the Indian technology start-up scene and spends rest of his time spilling poetry and stories on paper.