Bharti Airtel has launched new cheaper plans with a bundled streaming device and free access to several over-the-top content streaming services, responding to its rival Reliance Jio’s recent move to introduce ultra-low pricing for fixed broadband service.
The price war between both telcos has already resulted in broadband prices slashed by up to 40% in India.
Both telcos are now offering data plans with increased speeds, higher data allowances and bundled OTT content services. JioFiber’s cheapest plan is priced at Rs 399, while Airtel’s most affordable plan is priced at Rs 499.
Airtel has rebranded its broadband plans to “Xtream Bundle” and is offering up to 1 GBPS speeds along with its own branded Android 4K TV Box to customers in India. The access to OTT services along with Live TV, however, can be available through Airtel’s 4G TV Box.
“Customers are increasingly spending more time online be it education, work or entertainment. And Entertainment is the space where we see an exciting opportunity. To drive penetration of this exciting innovation we are today making our plans even more accessible for customers,” Sunil Taldar, Director – Homes, Bharti Airtel said in an official statement.
Bharti Airtel’s broadband business grew by 1.1% sequentially, driven by strong gross subscriber additions in the last quarter as more people demand fixed broadband connections which are required for work from home (WFH) and study from Home purposes.
However, the telco had then revealed that a part of this growth in the broadband business was impacted by the temporary closure of small offices and shops who chose to discontinue their service during the lockdown.
In order to expand its broadband business, Airtel has been working on forming more partnerships with local cable operators in India as laying new fiber is capital intensive and requires a lot of “right of way” approvals from government authorities.
The telco had said that these partnerships are aimed at increasing broadband penetration in smaller towns. It is now offering its broadband services in 14 such cities through this partnership model.
Analysts said that Airtel’s move to reduce pricing of its broadband plans will impact its average revenue per user (ARPU), but will help the telco in expanding its subscriber base. They said that new subscriber additions driven by cheaper plans and lucrative data benefits will offset any ARPU decline in coming quarters.
Credit Suisse, in its recent note, said that Airtel will benefit from increased adoption of fixed broadband given its network presence in the country. It, however, added that Airtel may need to form more bundling partnerships on the OTT streaming front to make its offering competitive.
With the help of a push by both Jio and Airtel, India’s broadband subscriber base is expected to grow at 11% CAGR over the next five years as compared to 4.5% CAGR in the last five years.
Credit Suisse, in its analysis, said that the 11% penetration growth will be mainly led by Jio’s subscribers.
Jio, on the other hand, is replicating its wireless strategy to grow its fixed broadband business with an aim to connect 50 million homes and businesses using its JioFiber services.
Analysts said that Jio’s affordable strategy revolves around gaining users by offering lower tariffs than peers and over time monetizing other avenues like digital ad and subscription.
“Jio’s new Rs399 plan is a potential game-changer in our view, as it can increase adoption of fixed broadband in India with Jio scaling its network reach,” Credit Suisse said.