Local Cable Operators (LCOs), historically providers of cable TV services, are increasingly becoming essential partners for Internet Service Providers (ISPs), addressing India's persistent challenge of last-mile broadband connectivity. Industry experts highlight the strategic role LCOs play in boosting wired broadband penetration, which remains one of the lowest globally.
According to data from the Department of Posts, as of January 2022, India had 81,706 active LCOs, possessing extensive last-mile infrastructure. With significant upgrades transitioning from traditional coaxial cables to advanced fiber optics, LCO infrastructure presents a robust potential for broadband expansion.
By December 2024, the wired broadband subscriber base stood at 41 million, with projections suggesting it could double to around 82 million by 2030. Despite this promising growth, wired broadband still accounts for just 4.4% of India's total broadband user base of 945 million, where the majority continue relying on wireless technologies like 4G and 5G.
Ashish Pherwani, Media & Entertainment Leader at EY India, highlighted the pivotal shift among LCOs: "LCOs are experiencing a decline in their traditional pay-TV subscriber base, prompting many to diversify into broadband services. Their ability to provide ISP services in a personalized, cost-effective manner can be their key competitive advantage, though service quality will ultimately determine their success."
Recognizing this shift, leading telecom firms have actively sought partnerships with LCOs. Reliance Industries strategically acquired stakes in cable companies like Hathway Cable and Datacom, DEN Networks, and GTPL Hathway, leveraging Hathway's infrastructure to offer IPTV services under Reliance Jio.
Bharti Airtel, another major player, has similarly partnered with LCOs to expand its wired broadband services. Airtel's FY24 annual report indicates that its asset-light approach through partnerships significantly accelerates broadband deployment and customer acquisition.
The LCO model has also been embraced by independent ISPs such as Excitel Broadband and multi-system operators (MSOs). Vivek Raina, CEO of Excitel Broadband, shared that the company has established partnerships with 2,300 LCOs, offering fiber broadband solutions. "This model is mutually beneficial, providing us customer acquisition opportunities while simultaneously creating a new revenue stream for LCOs through a 40% revenue-sharing model," Raina said
Excitel Broadband plans to raise Rs 200 crore to support further expansion. Currently, Excitel serves one million broadband subscribers and reported revenue of Rs 486 crore against losses of Rs 120 crore in the fiscal year 2023-24, largely attributed to depreciation costs from capital expenditures.
LCOs are increasingly turning towards broadband to diversify revenue as traditional cable TV subscriptions decline due to competition from streaming services and free-to-air platforms like DD Free Dish. Between 2018 and 2024, LCO employment fell by 31%, from 120,557 to 82,722, reflecting the downturn in the cable TV market.
UCN Cable, based in Nagpur, exemplifies this shift by offering bundled cable TV and broadband services, enabling LCO partners to compete effectively with telecom operators. "We empower our LCO partners by providing bundled broadband and TV options," explained Ajay Khamankar, Director at UCN Cable.
Supporting these developments, the Telecom Regulatory Authority of India (TRAI) recommended in 2022 that the government facilitate infrastructure sharing between LCOs and telecom providers to bolster broadband expansion. TRAI advocated amending existing guidelines to allow telecom service providers greater access to LCO infrastructure.
A recent survey by the All India Digital Cable Federation and EY revealed strong interest from LCOs in broadband delivery, with 75% already offering or planning to launch broadband services. This active involvement of LCOs will significantly propel wired broadband growth in India, reshaping the connectivity landscape.