GTPL Hathway partners LCOs to sell cable TV, broadband as a bundle

MUMBAI: Cable TV and broadband player GTPL Hathway is partnering with local cable operators (LCOs) to increase its broadband penetration by bundling cable TV and broadband services for the customers.

The company is coming up with an attractive dual play offering for LCO partners to tap existing digital cable TV homes. The MSO wants to use the last mile connectivity of the LCO to increase its broadband footprint.

As of 30 June, GTPL Hathway’s total home pass was 1.53 million while total subscriber base stood at 290,000. The average revenue per user (ARPU) stood at Rs 465.

“We are coming with a combo offer by the end of August because LCOs are more interested to give consumer video and data service and they are very much interested to do it jointly with GTPL. We are coming with a very attractive package and with very good price offering to our LCO for consumer dual play or combo offer,” GTPL Hathway chief strategy officer Piyush Pankaj told analysts during an earnings call.

Queried about increasing broadband revenue, Pankaj stated that the company’s strategy is to make 40 Mbps as a mass product. To ensure that, the company has decreased the price for 40 Mbps plan. The per month cost for 40 Mbps plan is from Rs 388-450.

He also admitted that the broadband ARPU in Q1 was down due to the push being given to the 40 Mbps plan. “We are looking forward that the numbers will start coming from this quarter and next quarter, we will see surge in the number, but ARPU is where we are trying to maintain right now,” Pankaj added.

The company has guided broadband revenue for FY19 to be at Rs. 160-170 crore. “We are trying to maintain that guidance right now, the more clarity will come on the next call by the next quarter that where we are moving in the broadband side, we are going to lower or higher the guidance at that time,” he stated.

In Q1 FY19, the total Capex was Rs. 45 crore with cable TV taking Rs. 24 crore and broadband consuming the rest. The company will invest Rs 50 to 60 crore on broadband in FY19.

GTPL Hathway hopes to 100,000 new customers in FY19. The company is looking to increase its penetration which has come down to 19.5% from 22%.

The plan is to first create the home pass and then convert these homes into paying broadband customers. “Firstly, we have to create the supply and then the demand has to be made and it was more of demand and supply goes spiral,” Pankaj said.

The company’s fibre to the home (FTTH) implementation on the ground for the home pass is at around 65% to 70% completed.

GTPL Hathway chairman and non-executive director Rajan Gupta noted that the overall wireline broadband market has stagnated at 18 million customers for the last few years.

He, however, noted that high-speed broadband market, which is defined as minimum 40 Mbps, is around 5 million of the total base and is growing in double digits albeit on a low base.

The entry of Reliance Jio, he added, will expedite the process of converting the 18 million base to high-speed broadband. He expects GTPL to be a big gainer in the Gujarat market due to its competitive pricing and investment in technology.

“Every geography there will three to four key players, which will gain that is, so we really see in Gujarat market the GTPL in ARPU is already low and technology wise GTPL has hugely invested in the last 12 months in terms of giving 40Mbps to everybody and being ready for 100Mbps and more, so in this growing market when this 5 million becomes 18 million GTPL obviously can play a pivotal role in the Gujarat market in terms of monetising the infrastructure, which has already put,” he explained.

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