The Indian broadband market is poised for significant growth, riding on the increasing data uptake. While telecom operators will continue to be the frontrunners in the broadband market, several multiple service operators (MSOs) are also expected to enhance their play in this space. In recent years, MSOs have leveraged their robust wireline infrastructure to offer broadband services, though with a limited footprint and scope. However, given the growing need for ubiquitous data connectivity, these players are now set to assume a bigger role in the broadband value chain. In fact, broadband is emerging as a key revenue driver for them.
DEN Networks Limited is one such MSO that sees broadband as a key opportunity. In addition to providing cable TV services, the company offers online video streaming and broadband to its customers. The company currently provides digital entertainment services to over 13 million households in 400 towns across 13 key states – Delhi, Uttar Pradesh, Uttarakhand, Bihar, Jharkhand, Haryana, Rajasthan, Maharashtra, Gujarat, Karnataka, Kerala, Madhya Pradesh and West Bengal.
The company recognised the synergies between its core business and internet services early on, and obtained an internet service provider licence in 2008, within a year of its inception. It forayed into the high speed broadband services business in 2014 by launching services in the National Capital Region using data over cable service interface specification 3.0 technology. The company offers speed of up to 100 Mbps through its optic fibre network. DEN’s presence as a well-established digital cable TV operator worked in its favour and enabled it to acquire a subscriber base of around 200,000 in about two and a half years of its operations. Interestingly, several of these subscribers were from non-DEN homes (homes that do not have DEN cable TV subscription) too.
DEN’s broadband operations are based on the business-to-customer (B2C) model. It has also adopted the franchise model to lease bandwidth on a revenue-sharing basis in order to accelerate the scale and reach of its services. The company’s revenues from the segment increased by about 19 per cent from Rs 177.9 million during the quarter ended June 2016 to Rs 211.9 million during the quarter ended June 2017.
Key initiatives
In the era of ever-changing customer requirements, the company’s success can be attributed to its innovative offerings and initiatives in the broadband space. It ensures that its products are in line with changing consumer preferences. According to S.N. Sharma, chief executive officer, DEN Networks, “DEN is the first cable TV company to launch mobile video streaming services, under the brand name DEN TV+, which delivers buffer-free videos. Through DEN TV+, our broadband and cable customers can enjoy varied content on their smart devices.” Besides, DEN offers HD gaming, video-on-demand and pay-per-view services by engaging with digital content providers through strategic partnerships. It has also introduced smart set-top boxes (open Android boxes) to enhance customer experience and attract more users.
Tackling competition
With the presence of over 100 players, the Indian broadband space is highly fragmented. So how does DEN hold its own in an overcrowded market? “We have rationalised our resources, both manpower and other operating expenditure, to stay ahead of competition. We also undertake investments in technology and aggressive marketing campaigns to make customers aware about the company’s offerings. We carry out regular field visits to get insights into various customer requirements and challenges. Further, regular meetings are held with joint venture partners, distributors and trade partners to apprise them about the current challenges and changing industry dynamics,” says Sharma. As for the competition arising from the growing popularity of mobile data, DEN maintains a highly positive outlook for wireline services. “Wireless operators will not be able to support the high data and speed requirements in the future due to limited spectrum availability and space to set up telecom towers. The average data consumption is bound to increase, which only wireline broadband is capable of serving,” adds Sharma.
The way forward
The company aims to integrate its cable and broadband services to provide a seamless video content experience and improve its service support, which will enhance broadband penetration and usage. Further, it plans to achieve a leadership position in high potential markets across Tier II towns, where wireline players are limited. “Catch them young and see them grow will be the philosophy that DEN will follow going forward,” says Sharma. To this end, it would handpick 20 towns where it provides cable services, and launch its broadband services in these towns in the coming months. This will help the company leverage its brand value and seize the first-mover advantage for offering broadband services in these regions.
