CABLE BROADBAND – CURRENT STATUS AND

WAY FORWARD
CABLE BROADBAND – CURRENT STATUS AND WAY
Rajan Gupta , Managing Director , Hathway Cable and
FORWARD
Datacom Limited
Rajan Gupta , Managing Director , Hathway
Cable and Datacom Limited

18th Jan 2017 , TRAI's seminar on ‘Brainstorming Broadband:

Developing a Roadmap for India
 Cable Broadband- Global Perspective

► Cable broadband across world is a key component of all major cable operators technology
strategy aiming to enable every home , business and community to receive high speed broadband
while leveraging existing infrastructure.

► Cable broadband subscribers continue to grow across world.

Worldwide CableBroadband Subscribers

200 Nos In Mn

180

160

140

120

100

80

60

40

20

0
2012 2013 2014 2015 2016 2017 2018 2019 2020

Source: Ovum: Fixed Broadband Subscription Forecasts 2015-2020

 Fixed broadband subscribers by technology

North America Western Europe

Nos In Mn Nos In
Mn
80 140
70 120
60 100
50
80
40
60
30
20 40
10 20
0 0
2012 2013 2014 2015 2016 2017 2018 2019 2020 2012 2013 2014 2015 2016 2017 2018 2019 2020

Cable Modem DSL FTTH/B Other Cable Modem DSL FTTH/B Other

Latin America and Caribbean

Nos In Mn

50
45
40
35
30
25
20
15
10
5
0
2012 2013 2014 2015 2016 2017 2018 2019 2020

Cable Modem DSL FTTH/B Other

Source: Ovum: Fixed Broadband Subscription Forecasts 2015-2020

Advantages of cable broadband

 Opportunity to continue to leverage existing infrastructure to provide faster speeds without

the high cost of full FTTH build .

 Faster speed to market.

 Avoid complicated , time consuming and expensive civil works in dense urban
environments.

 Cable services currently compare well to other fixed solutions across key performance
metrics ; downstream speed , upstream speed , actual perform vs advertised speeds , latency
and packet loss.
Major cable broadband operators

UNITED STATES • Comcast cable is the largest broadband provider in United States
offering cable broadband , video and phone services to 56 million
homes .
• During 2015 Comcast grew its high speed internet customer base
by 6.2% gaining share in a market which grew at 4.8%

UNITED KINGDOM
• Virgin Media , covers 13 million homes in UK and 0.9 million
homes in Ireland

SWEDEN
• Com hem, Second largest broadband operator with cable
broadband coverage of 40% of Sweden homes .

CANADA
• Offers Cable and high speed broadband services to 41.5 million
homes or 30% of Canadian households.
Cable broadband – Indian scenario

► Multi System Operators

(MSOs) provide cable TV
services, as well as
broadband services to
customers. In January 2017,
there were over 900
provisional and 230
permanent MSOs registered
in India, but only a minority
provide broadband services1.
The MSOs provide these
broadband services by
obtaining an Internet Service
Provider (ISP) license from
the government..
1 Ministry of Information & Broadcasting, Jan.2017
Broadband has become a key utility and can help the
government achieve its key economic goals and Digital India
objectives

Broadband Highways

Impact on GDP Per Capita due to a

Like other infrastructure networks before it such as roads and railways,
10% Rise in Broadband Penetration
broadband can profoundly transform India’s economic landscape:
(Low and Middle-Income Countries)1
► Accelerates the velocity of commerce and boosts employment
Broadband 1.4%
► Expands the ability to communicate, share knowledge and innovate
Internet 1.1%
► Brings more people into the formal economy via access to e-services Phone: Mobile 0.8%
and online payment gateways Phone: Landlines 0.7%

Early Harvest ‘IT for Jobs’ Scheme & e-Governance 2 De-Monetization & Public Internet
Programmes2 Skill Development 2 e-Kranti 2 Access Programme2

Short timeline
projects such as
provision of public wi-
fi hotspots in 1mn.+
cities and wi-fi access
in all universities
Formalization of the
Training for IT sector economy and labor 44 mission mode Creation of delivery
jobs for 10mn. markets via access to projects around end-points for
students across online platforms for digitizing services government/business
smaller towns and Aadhaar, certificates, relating to land services via common
rural areas over 5 degrees, payment records, income tax service centers in
years gateways etc. filing etc. every gram panchayat

1 World Bank: Economic Impacts of Broadband, 2009 2 Digital India Portal

But India’s broadband penetration lags behind key peers, and in
2015 it ranked 132nd for fixed and 156th in wireless penetration5
India’s 2016 Cable and Internet Landscape Fixed Broadband Penetration Per 100 Inhabitants Average Connection Speed: Mbps
(2016 data for India, 2015 for other countries) 45 (Q2 2016 for all countries)6
All India1 South Korea
France 41% 27.0
-1311mn. Population South Korea 40% Norway 20.1
- 279mn. Households Norway 39% Sweden 18.8
United Kingdom 38% Japan 17.1
Germany 37% United States 15.3
Canada 36% United Kingdom 15.0
Internet Users 2 TV Households3 Sweden 36% Germany 14.1
- 471mn. - 180mn. United States 32% Spain 14.1
Japan 30% Canada 13.7
Portugal 30% Thailand 13.7
Spain 28% Portugal 12.9
Broadband Subscribers4 Paid C&S Australia 28% Russia 12.3
(excluding Narrowband) Households3 Italy 24% Poland 12.2
- 162mn. - 151mn. Poland 19% France 9.6
Russia 19% Australia 8.5
China 19% Italy 8.2
2014-16 Argentina 16% Mexico 7.4
CAGR% Chile 15% Chile 7.0
Mobile Wireless Turkey 12% Turkey 7.0
Broadband Subscribers4 64%4 Brazil 12% Malaysia 6.8
- 144.2mn.
Mexico 12% Indonesia 5.9
Colombia 11% Sri Lanka 5.7
Thailand 9% South Africa 5.6
Fixed Wireless Malaysia 9% China 5.2
Broadband Subscribers4 14%4 South Africa 5% Argentina 5.2
- 0.6mn. Egypt 5% Brazil 4.8
Morocco 3.4% Colombia 4.6
Sri Lanka 3.1% Morocco 4.4
Fixed Broadband Bangladesh 2.4% Egypt 4.0
Subscribers4 8%4 17.3mn.
India 1.3% subscribers India 3.6
- 17.3mn Indonesia 1.1% Bangladesh -
Pakistan 1.0% Pakistan -
1 United Nations: Urbanization and Development Report 2016, World Bank 2015, EY Analysis 2 As forecasted for June 2016, IAMAI: Mobile Internet in India 3 FICCI M&E Report

2016, EY Analysis 4 TRAI Quarterly Performance Indicators Jun.2014 and Jun.2016 . TRAI’s definition of broadband only includes speeds >512kbps- this definition is used here.
5 United Nations Broadband Commission Report 2016 6 Akamai Technologies: State of Internet Connectivity Q2 2016
Cable broadband is uniquely positioned to bridge this gap and
reach millions of untapped users in smaller cities and rural areas
Value of Fixed Broadband

► The BharatNet initiative has resulted in over 150,000km. of fiber cable being laid
100mn.(digital cable)
across 65,000 gram panchayats as of Dec.20161 homes with same pipe
► While such long distance cable is available (via government and private telecom and a little bit of
operators)- local access networks are lacking upgradation can be used
Accessibility ► The cable TV industry has a distinct advantage here, having already reached deep in for delivery of robust
urban and rural areas, with last-mile access in 150mn.+ homes and 1500+ towns2 broadband connectivity
to 500mn. people. 3
► India’s copper-based fixed phone line cables are often of poor quality and cannot R.S. Sharma, TRAI
take high speeds2. But MSOs reach over ⅔ of cable homes via fixed line coaxial Chairman
connectivity, which can be quickly upgraded to carry high-speed broadband23

► Given that crowded and scarce wireless spectrum may struggle to keep up with the % of Internet Subscribers
ongoing data consumption boom in 2-3 years, wired broadband becomes critical4 5 with Broadband
There is significant scope for synergies across fixed and wireless broadband, (ie: Speeds >512kbps)7
Speed & ►

Reliability especially in terms of data offloading and easing pressure on spectrum- as has been
Fixed 83%
noted in studies across both the US5 and EU6
► For reliability, wired broadband is able to enter the home, and thus offers highly Wireless 43%
dependable connections that are not impacted by walls and other obstacles2

► To provide last-mile access, MSOs partner with a network of 100,000+ LCOs, Case Study:
comprising a workforce of 500,000 ready to serve broadband subscribers2 PMMY (Mudra) Textile Loans
MSOs work with LCOs on training and upgrading skills/technical knowledge- 0.5-1% The government has supported
Skilling & ►
skill and loom upgradation
Training of broadband revenues will be spent on such programs, and government initiatives
efforts in the textile industry by
can help to further support this2
extending loans to 500,000
► The roll-out of cable broadband will generate further multiplier effects on handloom weavers over 3 years8
employment- estimated at 65 workers per 10,000 new subscribers2
1 BBNL Bharat Net Phase 1 Status Update, Dec.2016 2 Industry discussions, P&Ls of 5 national MSOs 3 Television Post, Dec.16 4 R.S.Sharma, TRAI Chairman in
Outlook India, May 2016 5 Wireless Broadband Not a Viable Substitute for Wireline Broadband, Vantage Point, 2015 6 Working Together: Synergies of Fibre and Wireless
Networks, FTTH Council EU, 2015 7 TRAI Quarterly Performance Indicators Jun.2016 8 India Today, Jun.2016
National MSOs- and cable broadband in general- will continue
leveraging these advantages to grow their share of the market
Cable Broadband Landscape

Indian Fixed Broadband Industry:

Subscriber Market Share by Key Players1 ► The fixed broadband industry today is dominated by
15.0mn. 17.3mn. the state-owned companies BSNL and MTNL, who had
6% 6 National MSOs 77% of India’s wired broadband subscribers in 20141
11%
9%
8% 12%
9% Other ISPs ► But in recent years, BSNL/MTNL have lost market
share to competitors- particularly national MSOs
77% Bharti
68% ► 6 national MSOs* added nearly 1mn. subscribers from
June 2014 till June 2016, taking their total to more
BSNL / MTNL
than 1.8mn. cable broadband subscribers1
Jun.2014 Jun.2016

Broadband Subscribers (mn.) 12345

► Given these MSOs’ existing reach across 100mn.+

27.9
Total Fixed digital cable homes and future plans for heavy capital
11.2 Broadband expenditure- cable broadband is projected to outgrow
17.3
Cable Broadband
the market, even in a baseline scenario with no
4.0 reforms

FY16 FY21

1 TRAI Quarterly Performance Indicators Jun.2014 and Jun.2016 2 Industry discussions, P&Ls of 5 national MSOs 3 2018 Forecast for India’s Fixed Broadband Market- IDC 2014
4 2020 Indian Fixed Broadband Market Forecast- Budde Communications 2015 5 APAC Pay-TV and Broadband Markets, Media Partners Asia 2016

*Note: National MSOs considered- Hathway Cable & Datacom, SITI Cable, Den Networks, IndusInd Media & Communications, Fastway Transmissions, ATRIA Convergence Tech.
license fee rationalization - lever for accelerating broadband
growth
International Levies on Fixed Broadband Operators

Many countries do not subject fixed broadband providers to any major …while the countries that have license fees,
license fees, and are often designed to simply recover regulatory costs*… have rates lower than India’s 8%

License Fee as % of Gross

Country Regulatory/License Fee Structure12 Country
Revenue12

Exempt (however telecom operators contribute an annual

US*
regulatory fee to the Universal Service Fund)
Pakistan 2%
Slab-based annual regulatory fee, basis proportionate
UK* Indonesia 1.25%
share of revenue/subscribers
Annual regulatory fee, basis company’s share of eligible Bhutan 1%
Australia*
revenue in industry’s total revenue
Brazil 1%
Annual regulatory fee, basis company’s share of eligible
Canada*
revenue in industry’s total revenue Singapore Max 1%
Norway* Annual variable administrative regulation fee
Malaysia 0.50%
Sweden* Annual variable administrative regulation fee
South Africa 0.15-0.35%
National Universal Service Fund receives voluntary
Mexico
contributions

1 United Nations ITU 2016 2 TRAI Release: Delivering Broadband Quickly- What do we need to do?, Apr.2015
*Note: Regulatory regimes where the objective is to recover regulatory costs- any license fees collected are therefore nominal
THANK YOU