Bharti Airtel's Gopal Vittal bullish on TV + OTT content bundling
Speaking to analysts during the Q1 FY23 earnings call, Vittal said the company’s approach has been to leverage the core strengths of the ongoing broadband explosion
Facing regulatory and competitive headwinds in the direct-to-home (DTH) segment, telecom operator Bharti Airtel is betting big on bundling TV and OTT content to stem the decline in the DTH business.
The company wants to take advantage of the growing convergence in the media & entertainment sector by launching a DTH + broadband combo offer under the Airtel Black plan. The fiber + DTH plan provides 350+ TV channels and 16 OTT apps.
"Our approach has been to leverage the core strengths of the ongoing broadband explosion to put Airtel Black and Convergence at the heart of our strategy. We have seen substantial growth in the last month on our broadband and content bundling that includes linear TV as well as OTT content. We expect the business therefore to see some recovery in the coming quarters," Bharti Airtel MD & CEO Gopal Vittal told analysts during the Q1 FY23 earnings call.
Bharti Airtel's DTH business has seen an 8% decline in Q1 operating revenue at Rs 748.2 crore compared to Rs 809.4 crore in the same quarter last year. Airtel's DTH customer base shrank by 3.2% YoY to 17.4 million at the end of Q1’23 versus 18 million in the corresponding quarter last year. ARPU for the quarter was Rs 143 compared to Rs 151.
According to Vittal, the new tariff order and the migration of pay subscribers to DD Free Dish have impacted the private DTH players badly.
"The DTH business saw a decline of 0.9 percent but the silver lining is that we have consistently grown market share over the last few quarters. As I have said before, the entire industry has been brought to its knees by excessive regulation. The New Tariff order introduced a few years ago created mind-boggling complexity for the customer with no benefit to any stakeholder," he noted.
"Secondly, the same content, if provided through a different medium – broadband or wireless is not subject to this tariff order creating an arbitrage and uneven playing field. Finally, good content is being made available on Free-to-Air channels. This perfect storm has led to serious headwinds in an industry where there is still a massive opportunity to grow from cable."
Bharti Airtel's fiber broadband witnessed a sharp growth with the addition of 310,000 users this quarter. "The demand for home broadband is exploding, coupled with convergence and proposition that we launched in Airtel Black where we are combining the content bundles in both OTT and linear. We expect this to continue to see significant traction and hopefully, this business, which is a very good business with very low levels of churn, will become very sizable business in years to come," he stated.
