Here are the two big winners from the fiber internet boom
In the month of June, the active subscriber base of telcos Bharti Airtel and Reliance Jio grew by 2.4 million
Elevated demand for high-quality broadband triggered by work-from-home and online education has led to robust subscriber addition for the fiber-to-the-home (FTTH) segment. In fact, the latest official data showed that the total subscriber base touched a historic high of 23.52 million in June.
Bharti Airtel’s FTTH subscriber base improved from 3.24 million in May to 3.37 million in June, as per Telecom Regulatory Authority of India (Trai) data. Close competitor Reliance Jio saw additions of around 22,000 to 3.22 million FTTH subscribers in June. In the June quarter, Jio’s FTTH additions, at 0.62 million, were the highest ever.
Analysts said the ongoing traction in this segment bodes well for both companies. After all, they have been providing FTTH/fixed-line broadband service in partnership with local cable operators (LCOs) given the latter’s proximity to the consumer.
In the post June quarter earnings conference call, Bharti Airtel’s management had said that during the quarter the firm continued to expand its presence by rolling out an additional 1 million home passes. The innovative partnership model with LCOs allowed it to extend services to an additional 98 towns, taking the LCO presence to over 300-plus towns. The management also said that the temporary disconnections made by small businesses/SOHOs were being activated again. In a bid to tap this opportunity, the firm is looking to step up investments to take its network to over 2,000 towns across India to cover over 35 million home passes in three years.
According to Reliance Industries Ltd’s 2021 annual general report, until March, over 2.5 million homes were connected by JioFiber services. Jio looks at FTTH services as a significant greenfield opportunity to connect 50 million homes across more than 1,600 cities in India, said the report.
Even though this segment currently contributes a small portion to the overall revenues of both telcos, analysts said the upbeat outlook for FTTH bodes well for them.
“The resilience of FTTH additions further reaffirms the underlying secular tailwinds for fixed-line broadband services, and we believe that both Jio and Bharti are well-positioned to participate in the strong demand cycle, driven by their tie-ups with LCOs," said analysts at JM Financial Institutional Securities Ltd.
The Trai data also showed that telcos continued to recover from covid blues. In June, Bharti Airtel’s active subscriber base expanded by 2.4 million to 344 million. Jio’s active subscriber base grew by 2.4 million to 340 million in June. However, Vodafone Idea continued to struggle for survival with its active subscribers falling by 4.9 million to 242 million.
