The broadband segment is yet to replicate the success of wireless telephony in the country. As of December 2012, the broadband subscriber base stood at 14.98 million. While this figure reflects the dismal state of broadband uptake in the country, it also highlights the vast untapped potential of the segment.

For internet service providers (ISPs) such as Spectra ISP Network Private Limited (Spectranet), this translates into a significant business opportunity. The government’s ambitious broadband targets set under the National Telecom Policy, 2012 will further strengthen the business case for Spectranet. The company entered the broadband space in 2002 as a pure-play internet connectivity provider and has  since evolved into an integrated communications services provider. Though relatively small as compared to broadband operators like Bharat Sanchar Nigam Limited (BSNL), Bharti Airtel or Reliance Communications (RCOM), Spectranet has a broadband subscriber base of over 50,000 cus-

tomers across Delhi and the National Capital Region, Mumbai, Bengaluru, Chennai, Hyderabad, Kolkata and Chandigarh. Its business offerings include enterprise and home solutions, which ensure high speed broadband connectivity to homes and offices, as well as next-generation cloud solutions and services for enterprises.

The company has also made significant progress in the Wi-Fi segment. In 2011, it deployed the first mobile data offload system in India, which has helped manage network congestion by offloading heavy 2G/3G data traffic onto Wi-Fi networks. Currently, Spectranet’s Wi-Fi network spans 1,300 hotspots across major metros including Delhi, Mumbai, Bengaluru, Kolkata, Chennai and Hyderabad. It plans to extend its reach to 5,000 hotspots across these cities.

Strategic tie-ups

Strategic partnerships have played a key role in strengthening Spectranet’s position in the broadband market. The company was the first ISP to introduce cloud-based videoconferencing solutions in India.

In 2011, it partnered with Aircel to provide high speed internet access to the latter’s Wi-Fi customers. In 2012, the company entered into a strategic partnership with Netmagic Solutions, the country’s largest pure-play managed IT hosting services provider. This is the first such deal in the data centre space in India, where a communications services provider has partnered with a pure-play data centre service provider. As per the deal, Spectranet will set up India’s first multi-location commercial data centre-in-data centres (DiDs) in Netmagic’s data centres in Mumbai, Noida, Bengaluru and Chennai. Spectranet will independently deliver service and support to customers hosted at the DiDs and Netmagic Solutions will provide core data centre infrastructure support and services. The deal will help Spectranet extend its data centre service footprint from the Delhi region to other key enterprise and small and medium business markets in India.

In 2012, the ISP partnered with Inventum Technologies to develop the Spectranet mobile data offload platform. The platform offers high speed internet access to mobile customers through Wi-Fi. Spectranet has deployed core and access service infrastructure for Wi-Fi services, enabling seamless internet access for mobile subscribers across GSM/3G networks and the company’s Wi-Fi network.

Key challenges

Aggressive competition in the broadband market is a key concern for the company. As of December 2012, there were 159 licensed broadband service providers in the country. However, this market is dominated by a handful of players such as BSNL, Mahanagar Telephone Nigam Limited, Bharti Airtel and RCOM, which account for 95 per cent of the total broadband subscriber market.

The commercial launch of broadband wireless access (BWA) services by companies that had won BWA licences in 2010 is expected to intensify the competition in this space. Players such as Reliance Infocomm (earlier Infotel Broadband) are expected to adopt an aggressive pricing strategy and offer users services at highly competitive rates. In order to retain its existing customers and attract more subscribers, Spectranet will have to come up with innovative broadband plans at competitive prices.

New business plans and the way forward

With leading service providers targeting enterprise customers to gain market share, Spectranet has decided to shift its business focus from the enterprise segment to the retail segment. The company aims to attract customers by offering them internet usage plans with unlimited data downloads at affordable prices.

The company aims to acquire a user base of 2 million by 2015 and has earmarked investments worth Rs 5 billion to augment its broadband infrastructure, increase the number of retail subscribers and create hotspots across the country.

It also plans to expand its optical fibre network reach to 30,000 km and cover cities such as Delhi, Bengaluru, Mumbai, Chennai, Hyderabad and Ahmedabad, and 94 more cities by 2015. It also intends to increase its workforce by hiring 400 people to service clients.

A niche player, Spectranet will have to increase its market share and brand presence in the face of the hypercompetition anticipated in this space.