Is Fixed Broadband the Next Big Opportunity for Telcos

The wireless segment in India has reached a great height since the arrival of Jio. Telcos have rolled out 4G PAN-India and are close to rolling out 5G in every corner now. Telecom operators like Airtel are focusing on reaching more rural areas of the country to complete their network coverage. The growth in the wireless segment will come from 5G in the remainder of the decade and from consumers shifting from 2G to 4G/5G.

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However, the next big opportunity for the telcos might lie in the fixed-broadband segment. It is not just the telcos, but also the regional internet service providers (ISPs) that can grow fast due to rising demand for FTTH (fiber-to-the-home) services. A report from Future Market Insights estimates the global FTTH market to reach $95.88 billion by 2033, growing at a 15.1% CAGR.

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FTTH or Fixed Broadband is Capex Heavy

To offer FTTH services or fixed-broadband services anywhere in the world, the telcos or the ISPs need to deploy fiber. It takes a lot of money to do that, especially in India, where the population is very scattered and diverse.

Deploying fiber in every area before launching commercial services is a capex (capital expenditure) heavy task. Not every business can engage in such an activity, but telcos can. Jio and Airtel are aggressively rolling out FTTH for consumers.

This is because these consumers are high-paying in nature, and it also helps telcos in selling more services of their ecosystem to the customers. Compared to the wireless subscriber base, the wireline subscriber base of the telcos is fairly non-existent. Less than 4-5% of the population in the country can access fixed-broadband internet today.