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Ortel Communications: Growing presence in the wireline broadband space

May 02, 2017

Ortel Communications: Growing presence i...

 

By Akanksha Mahajan Marwah and Kuhu Singh

Broadband has emerged as a key business and revenue driver for multiple service operators (MSOs) in developed telecom markets across the world. The trend is now gaining traction in other countries as well, as MSOs look for new business opportunities. With their established wireline infrastructure, MSOs are well positioned to deliver triple-play (TV/data/voice) services.

In India, given the limited broadband penetration, there are immense opportunities for growth for MSOs. While the launch of 4G services has given a fillip to the mobile broadband market, fibre remains the unrivalled medium to deliver faster speeds at affordable rates. MSOs stand to gain in this scenario as they have the relevant infrastructure and a ready customer base.

Ortel Communications Limited, a regional MSO, is one such company that has identified the broadband opportunity and is looking to tap it in a big way. The company started operations in 1995 in Odisha and obtained an internet service provider (ISP) licence in 1998, among the first private sector companies to do so. Over the years, Ortel has had a successful run across all its areas of operations – cable TV, broadband, leasing of fibre infrastructure and signal uplinking services. It currently operates a cable network spanning 55,535 km spread across Odisha, Chhattisgarh, Andhra Pradesh, Telangana, West Bengal and Madhya Pradesh. Despite being a regional player, the company has 0.82 million cable TV subscribers, which is either equal to or higher than the subscribers of national MSOs.

Currently, 9-10 per cent of these subscribers are broadband users and this figure is likely to increase in the coming years given the huge untapped potential of the wireline broadband segment. In fact, in the past two years, the broadband segment has been a key focus area for Ortel. During the quarter ended December 2016, revenue from broadband services accounted for around 20 per cent of the total revenues. Further, the segment recorded a year-on-year growth of about 18 per cent during the nine month period ended December 2015 and December 2016.

The company has built a two-way communication network for offering triple-play services. It uses a hybrid fibre coaxial network, which is a combination of optic fibre in the backbone and coaxial cable in the downstream. The network is capable of providing broadband speeds of up to 100 Mbps using a cable modem with DOCSIS (data over cable service interface specification) technology.

Key differentiators

The company’s success is largely owing to various innovative strategies it has adopted over the past two decades. According to Bibhu Prasad Rath, president and chief executive officer, Ortel, “Unlike most national MSOs which follow a B2B model, we have differentiated ourselves with a B2C model that focuses on ownership and control over the last mile.” The company owns about 90 per cent of its subscribers, which means that it captures the entire subscription revenue stream, without any revenue leakage to local cable operators. “Full control over the last mile ensures superior service, as well as direct control over subscriber billing and collections,” he adds. The B2C cable TV business model has also helped Ortel withstand the aggressive competition in the broadband market by directly reaching the end-users. Further, its high-end triple-play network allows the company to offer both cable TV and high speed broadband services using a single cable.

Ortel is one of the early adopters of the DOCSIS technology, which can be used along with cable TV services with minimal changes in the network architecture. According to Rath, “Most of our competitors use DSL technology, which has its limitations. However, we use mega speed DOCSIS 3.0 broadband internet, which has the capacity to deliver up to 300 Mbps to the customer’s premises. This technology has been widely used by leading ISPs in Europe and the US.” Ortel also provides wireless home broadband facilities, enabling customers to use multiple devices at home. “We have installed Wi-Fi hotspots in a few cities where customers can experience high speed internet even outside their homes by using their home broadband accounts,” adds Rath. The company has also experimented with Ethernet over coaxial, Metro Ethernet and GPON (gigabit passive optical networks) in its areas of operations.

Challenges and the way forward

Ortel, being a wireline broadband provider, has no spectrum limitation. However, cable infrastructure maintenance is a key challenge faced by the company. Overhead cables, like underground cables, require a high level of maintenance. Redundancy networks have to be set up ahead of time given the frequent expansion/maintenance of roads. As for new geographies, inadequate availability of skilled workers is a major constraint.

These challenges notwithstanding, the company plans to invest around Rs 3 billion for infrastructure expansion to gain a stronger foothold in its existing areas of operations as well as to enter new states in the country.

Going forward, Ortel is optimistic that its broadband business will report significant growth. “With video and audio streaming on the rise, online gaming becoming a norm, and downloading of heavy files for research and education becoming a necessity, we will keep on modifying our offerings to meet these needs,” says Rath.

 

 
 

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