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MSOs to complete the last mile Broadband connectivity in India

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22

Jul, 2015

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Internet connectivity in India is set to witness a steep surge with Department of Telecom’s proposal to leverage on MSOs’ pan India coverage to complete the last mile connectivity for Broadband. For a very long time now, the world has been keenly observing the Indian connectivity as India is one of the largest broadband user market with a penetration less than 20%. This meant, theoretically, that India Broadband market has the potential to grow 5 fold. However, this sluggish growth had many challenges at the industry level, one of which is investment on last mile connectivity. Given the low ARPUs and increasing cost of service roll out, operators are wielding a double edged sword and any investment in the last mile has very little chances of ROI. However, the last mile reach of the media and entertainment industry has had a better story. DoT’s new proposal is set to leverage on this success to replicate the success of the PayTV industry by encouraging MSOs to provide broadband services along with the media and entertainment services.

MSOs, with a strong Pan India presence, have well penetrated into the Tier 1, 2 and 3 cities barring a few extremely remote areas. Very low internet penetration (19.7% as of 2014), large untapped market (~1 Billion) and growing ARPUs numbers make India the most lucrative broadband market in the world and this step by DoT is set to be the once in a lifetime opportunity for the MSOs in India. Indian MSOs had been trying to create new revenue streams for a long time unsuccessfully. Being a highly regulated market, PayTV operations have a very little room for increasing the revenue. While the revenues saturated maintenance costs increased and ROI on the network has substantially reduced, Indian MSOs were all set for a bumpy road ahead.

However, this decision of DoT to allow entertainment last mile providers to extend their offering to broadband services is set to change that. Broadband business model, unlike PayTV, gives MSOs an opportunity to increase their revenues. MSOs can spike up their revenue possibilities by providing better service quality, higher speeds and add on services. In addition to these revenue generation possibilities, PayTV operators can also extend their offering based on the current subscription model.

In an age dominated by mobility and markets dictated by smartphones users, markets are very dynamic in terms of embracing new technologies. Aspects like public Wi-Fi and offloading are set to influence the markets more than most MSOs today can perceive. However, appreciating the fact that these factors do influence allows operators to ready themselves with necessary solutions to handle the new age requirements of operators. Quite often market experts estimated that smaller cities tend to adopt technologies extremely slowly and cautiously. Similar predictions were made about smartphones a few years back and next few months saw surge in smartphone sales spike in Tier 2 cities. A similar trend is quite possible with broadband penetration.

This new business opportunity for MSOs demands the operators to ramp up their support systems to handle the growing business complexities. Challenges like usage based billing, pay as you go, prepaid cards, multi service billing, partner billing, etc., are non-existent in their current operations. However, these challenges must be addressed to deliver the right offering to their customers. Given that the Indian market, particularly the urban markets are already saturated with existing broadband operators, these challenges are further more relevant to match up to the competition and successfully deliver service. Most MSOs at this point lack the necessary knowledge to perceive and implement the intricacies of the broadband operations.

Right solutions and right strategies play critical role in the future success of MSOs in leveraging on their network to provide broadband services. Equipped with the right features, MSOs can launch solutions like usage based billing, pre-paid services, convergent billing for multiple services, VoIP calling for private locations, etc. Additionally, operators can also balance their daily load by allowing retail users to use internet at better speeds at non peak hours. Many such customer centric offerings can be defined based on a robust support system platform.

By : Kasyapa Malladi

KasyapaMalladi works with SURE! as a Product Marketing Specialist in Broadband. Kasyapa specializes in budget based marketing campaigns, strategy implementation in developing economies and in fostering and sustaining partnerships. Kasyapa’s experience includes Marketing Strategy for Cloud products in developed markets.

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