Even as broadband usage at homes reach a new high, the Indian government is mulling a plan to cut license fee on fixed-line broadband services to households.
According to multiple news reports the government has asked certain ministries to share their views on the proposal, which will then go to the Cabinet for approval.
In simple and practical terms, this means the monthly broadband bill in households has the potential to come down.
As per indications, the government is slashing the license fee on the adjusted gross revenue earned from households for providing fixed-line broadband services to 1 rupee a year.
If it comes into force, the government of India would have to forgo around Rs. 5000 crore.
It is said that there would be no change in services provided to commercial users. The governmen'st proposal banks on another 2019 government report which stated that a 10% increase in fixed-line broadband internet can lead to an increase of 1.9% in gross domestic per capita.
Government sources say the idea is also to help service providers widen their coverage at lower costs.
Fixed broadband penetration in India is currently very low at 6.1%, and this can easily more than double in next few years. For a perspective, China has a fixed broadband penetration of 86%.
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India is considering a proposal to reduce the license fee for household broadband services, a move that would boost access in Asia’s third-largest economy https://t.co/r9WMBhlsMG via @technologyJune 22, 2020
Who stands to gain the most?
Talking of broadband service providers (both wired and wireless), the biggest players in India are the State-owned BSNL, Bharti Airtel, ACT Fibrenet and Reliance's Jio.
As per TRAI data, there are a total of 67.34 crore (wired and wireless) broadband subscribers. Reliance Jio is the frontrunner with 37.74 crores subscribers. Airtel and Vodafone Idea had 14.48 crore and 11.8 crores subscribers respectively as per data till January last.
The total number of wired broadband subscribers in the country is 1.91 crores, a segment dominated by the State-owned BSNL with 82.3 lakh subscribers. Airtel has 24.3 lakh users. ACT, the third biggest player, had 15.4 lakh users. Hathway's subscriber count stood at 9.2 lakhs.
It said that Jio's wired broadband service JioFiber stood at fifth position with the total number of users pegged at 8.4 lakhs.
The thing is Jio unveiled its JioFiber last year. It is a nascent player but already offers premium streaming services bundled with free high-definition television and set-top box for life time subscribers.
Analysts say though all broadband players stand to benefit from the proposed fee cut, it is Jio that may reap the most as it is a new player and has plenty of fresh add-ons to offer.
