Bharti throws its hat in the ring

Clearly, the future of the telecom business is fixed line services and broadband. Bharti is planning to invest Rs.1500 crore in the broadband business (via rediff) How and why they are doing so? The upfront costs maybe higher for fixed line, but they give higher returns in terms of Average Revenue per user (ARPU). Rediff says,” The fixed line business of Bharti has an average revenue per user of about Rs 1,100.” This is clearly too lucrative since the mobile telephony business is not returning high returns.

The plus factor for Bharti is that it owns International gateways, which means that it has the control over the bandwidth it can supply to end customers. I feel strongly that there is cartelization among these bedfellows; still they are not hamstrung as state owned BSNL. Airtel has a strong recognition as a brand and they are pulling out all stops to step in BSNL’s territory. However, why such a late start is beyond my comprehension.

The final threat is that of Reliance. The big daddy of them all is storing up a huge library of shows, movies et al and has made significant investments in the same. All for the final push in order to entice customers to sign up for it is broadband. Other operators might tie up with existing players in the entertainment segment; BSNL plans to stream Doordarshan- that would be a double whammy for me! BSNL is known to spread its “tentacles of misery” in the subscriber’s lives (I believe and going by customer’s reactions, that spot would be keenly contested by Sify Broadband!)

Let us see how this hots up now. We are now in an exciting phase. Reason being that Broadband should see greater push and the advertising skills of these companies would be tested in the holy grail of rural markets. I really wonder whether Sachin Tendulkar (Airtel) or the Chinese pug (Hutch) be able to sell their respective brands.

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