India Broadband Market Continues To Enjoy Encouraging Growth
Published on: 24th Jun 2014
Note -- this news article is more than a year old.
The Asia Pacific region excluding Japan (APeJ) fixed broadband market reached a value of USD20.3 billion in first half of 2013, showing a sequential growth of 5.2%. According to IDC, the APeJ broadband market will continue to grow at a Compounded Annual Growth Rate (CAGR) of 12.1% for the next five years, powered by the fast growing bandwidth demand and the government driven broadband projects.
"In India, the number of fixed broadband subscribers will see a CAGR of 13.9% in the next 5 years, while the CAGR of revenue will be 7.8%," says Sherrie Huang, Research Manager of IDC's Asia/Pacific Telecommunications Group. "The fast growing bandwidth demand, driven by cloud, video and other bandwidth-hungry applications, have led to bandwidth upgrade taking place across Asia/Pacific countries including India."
The difference between broadband subscriber number and revenue growth shows continuous Average Revenue Per User (ARPU) decline in India. One reason is the high price pressure and fierce competition in India telecom market. Also the growth in mobile broadband is starting to slow down the demand for fixed broadband services, especially on the low-bandwidth side. On the other hand, the mobile-only household is on the rise.
While operators are spending more on network upgrades to satisfy market demand, the revenues and ultimately the return on investment are being squeezed by Over the Top Players (OTTPs). OTTPs offer rich-media applications which are bandwidth and latency-sensitive, as well as voice services which are chipping away at the heart of many operators' revenue streams. Sustaining revenue growth and profitability will be challenging.
"Leading operators have moved out of their comfort zone developing their ICT service capabilities, bundling connectivity with value-added services, and discovering new revenue sources such as media and e-commerce. Some have partnered with OTTPs to enrich the portfolio and to drive innovation. Carriers will continue to change their business model as competition intensifies," adds Huang.