Some FTTH opportunities will emerge in India

Kamalini Gangulay/Ovum
06 Jan 2011
00:00
News
Commentary

Yet another National Broadband Plan announced by the government of India raises the question of whether vendors will and should compete for FTTH in India's currently limited market.

Despite a billion-strong population, slow growth in wireline broadband subscribers (just over 10 million) remains a disincentive, particularly in comparison with the 120 million in China.

The number of FTTH subscribers remains around 50,000, compared with several million in China. Wireless broadband is considered to be a better opportunity than wireline broadband in India.

FTTH opportunities to this point have been unprofitable for western vendors due to the demand for rock-bottom equipment prices. The broader question is if there will be profitable opportunities for western vendors in India. Specific opportunities will exist but the incumbents BSNL and MTNL will not make it easy.

Low ARPUs have been cited as a primary cause for the lack of interest in rolling out FTTH. India, like many developing countries, has growing levels of income inequality. Not a good thing in itself, but a growing wealthy elite provides a small group of early adopters of new technologies with spending power.

MTNL is the wireline incumbent of two of the wealthiest Indian cities – Mumbai and Delhi. Both cities may have plenty of low-income residents in slums, but they also have a sizable population, possibly up to a few million, who live in houses whose market value now ranges up to a half-million dollars.

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