Fixed broadband finally gets its chance with Work From Home in time of Covid

Since WFH and video conferencing require good data connectivity, FBB can score as the quality of mobile broadband service and speeds are not reliable.

Fixed broadband can grow rapidly in the country following the Covid-19 epidemic and the trend of working from home, which today is an under-market with only 19 million subscribers. It is wireless or mobile broadband at around 600 million users, which has led to a surge in data.

For example, fixed broadband (FBB) subscribers have grown from 4% to 19 million vs. mobile broadband subscribers, which has increased from 53.9% to 606 million in the last six years. FBB penetration (% of households) is just 6.1% vs. 80–95% for many developed countries. China has an FBB penetration of 86%.

There are several factors responsible for the slow growth of FBB in India. A major reason is that mobile data in India is cheaper than FBB, while it is in direct contrast to other countries. In India, customers use mobile data to access all content on the Internet due to the generous allocation of 45GB per month in the base pack.

Analysts say that in many countries, TV is much more expensive than OTT, whereas in India, TV (cable and DTH) is cheaper than OTT. Thus, there is a premium service in India for watching FBB + OTT, which costs around Rs 1,400 per month, which is about Rs 300 for cable and DTH. However, in the post-Covid scenario, all this can change and FBB can become the winner.

This possibility may emerge with employees prioritizing shorter travel and resorting to video conferencing instead. In addition, corporates can start partial work (WFH) from home, where employees may prefer to come to the office two or three times a week and WFH on other days.

Since WFH and video conferencing require good data connectivity, FBB can score as the quality of mobile broadband service and speeds are not reliable. “Employees will not hesitate to buy this premium service as they will save money from reduced traffic, save commuting time, etc. FBB will become an alternative entertainment medium, ranging from usability. We can also see corporates currently reimbursing FBB bills, similar to mobile bills. Analysts at ICICI Securities say this could increase FBB penetration in the near term.

In addition, the Digital Communications Commission (DCC) has recently decided to abolish the 8% license fee on FBB and instead charge a token Re 1 to promote wired broadband in the country. This will encourage players to deepen their footprint.

Among the players present in FBB, Bharti Airtel has good products. The company has 2.4 million FBB customers and is expanding its presence in more cities and wants to penetrate deeper through partnerships with cable operators for last-mile connectivity. Currently, Bharti’s presence in FY17 has increased to 87 in 111 cities. Its FBB subs base has grown from 7% CAGR to 2.41 million from FY17-FY20.

Reliance Jio has also entered the FBB market and has provided nearly 1 million connections so far. State-owned BSNL is the largest fixed line broadband service provider with a user base of 8.23 ​​million.

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