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Spectranet: Delivering a wide range of internet services

April 11, 2016

Spectranet: Delivering a wide range of i...

The Indian data market continues to grow rapidly, supporting growth for mobile operators as well as for internet service providers. While the wireless internet segment has been witnessing strong growth, the wireline segment continues to maintain a steady pace. A key player in the latter segment is Spectranet, which has core expertise in delivering internet services through optic fibre cable (OFC) with a diversified product portfolio.

Since its inception in 2002, the company has made significant progress in the fibre-to-the-home (FTTH) and Wi-Fi segments. While the former helped the company to tap the retail customer segment, the latter was developed as a data offloading system. Spectranet’s first mobile data offloading system was deployed in 2011 with the aim of managing network congestion by shifting heavy 2G/3G data traffic to Wi-Fi networks.

Currently, the company is providing high speed broadband services under Fibre Optic Xperience (FOX) in the Delhi National Capital Region, Mumbai, Pune, Bengaluru and Chennai. According to reports, it has about 50,000 domestic customers and 4,000 corporate users. In addition, Spectranet offers business internet access products under FOX as well as data centre and hosting solutions for its corporate customers. It also provides facilities such as server co-location, interactive voice response system, disaster recovery, hosted dialler, internet security, virtual private server and server hosting for enterprise customers. All these offerings have enabled Spectranet to become an integrated service provider.

Evolving strategies

The company’s strategy over the past few years has been to deliver high quality broadband service to urban centres of the country. In order to improve its competitiveness in the broadband market, Spectranet recently launched an affordable residential internet service, delivering speeds of up to 100 Mbps. The service was available for Rs 1,199 along with a three-month trial offer in Gurgaon. According to the company, the current broadband service providers offer a fixed broadband connection with speeds of 40-50 Mbps and charge a minimum price of about Rs 3,000 per month. The offering intends to tap the residential user base, which typically has to make do with dismal bandwidth and connectivity speeds after reaching a particular download limit. Spectranet’s new offering is likely to spur service uptake in the high data demand residential segment of the Delhi circle. The three-month trial offer aims to gauge the customers’ experience based on which the model will be replicated in other cities in the coming months.

In the past, Spectranet has focused largely on tapping the corporate user base. However, it is now looking to aggressively expand its domestic connections. This change in strategy is largely owing to the increasing popularity of internet television services amongst residential data users. These include Netflix and YouTube, both products which Indian users are unable to use efficiently due to the poor quality of broadband services. Spectranet has also stated that it intends to bring its customers at par with global broadband users.

Another key aspect of Spectranet’s business strategy over the years has been its thrust on alliances to expand its service portfolio. For instance, in the recent past, the company partnered with Nimbuzz to offer VoIP services; with BoxTV.com, a website offering on-demand video streaming, to allow customers access to content on BoxTV.com; and with IT firm iYogi, to deliver extensive solutions for customer network management and technical support. In March 2016, Spectranet collaborated with domestic OFC vendor Sterlite to strengthen its FTTH network. This partnership will enable the company to deliver low-cost bandwidth services to end-users as its infrastructure costs would be reduced.

Going forward

According to Spectranet, it currently reaches only 4-5 per cent of the 15-16 million homes present in the cities where it operates. In the next four to five years, the company intends to increase its penetration in these cities to cover 25-30 per cent of city homes. While this target is ambitious, given the fragmented nature of the country’s current wireline broadband market, it is achievable if the company continues to deliver a wide range of broadband products while collaborating with other key players in order to remain relevant.

Going forward, the company is likely to face a major challenge pertaining to the response to its low-cost, high bandwidth services and its quality compared with other available FTTH services. If the company receives a positive response, these low-cost FTTH services will not only be able to help Spectranet improve its penetration; but will also help bring down prevailing FTTH prices, which have been the primary reason for its low adoption. Net, net, the company will continue on a steady growth curve, on the back of high uptake of its recent residential offerings..


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