Home Broadband Has Largely Been An Urban Product: Motilal Oswal

Motilal Oswal, an Indian firm engaged in financial services on Friday said in a report that the home broadband segment in India was a “dull market for a decade.” The firm said that the home broadband segment accounted for “minuscule” US$2 billion in market size. Motilal Oswal highlighted that the home broadband segment registered “modest” subscriber growth in the past five years with annual compound annual growth rate (CAGR) of “just 5%.” The Telecom Regulatory Authority of India (Trai) in a report in early November said that India had 20.47 million wired broadband users as on August 31, 2020.

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Home Broadband Segment Witnessed Limited Investments

Motilal Oswal in its report said that home broadband has “largely been an urban product with low penetration of 7% due to limited network connectivity.” The firm said that the limited availability of home broadband has led to the “increased wireless consumption” across the country due to its simple and “convenient installation” and activation.

“This is the classic chicken and egg story – telcos historically have neither invested in network nor increased home passes, given the high gestation period and lower business viability; on the other hand, consumer complaints related to the lack of network/product availability are observed frequently,” Motilal Oswal said in its report.

While the home broadband segment in India witnessed “limited investments,” Motilal Oswal said that segment globally is a “well-networked infrastructure” driven by deeper Fiber-to-the-Home (FTTH) penetration “supported by lower FTTH deployment cost” per subscriber.

In 2018, Mukesh Ambani, chairman and managing director of Reliance Industries highlighted in the company’s 41st annual general meeting (AGM) that the company is eyeing 50 million homes with its JioFiber service. The 50 million subscriber target was reiterated by Ambani at the 43rd Reliance Industries AGM in July, 2020.