This new player aims to take on Airtel, Jio in the internet-based home entertainment space

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Think broadband internet in India, and you will automatically think of Airtel Broadband, JioFiber, and a couple of other major brands. And why not?

According to the most current data available from the Telecom Regulatory Authority of India (TRAI), Airtel, Jio, and Vodafone Idea account for the top three broadband service providers in the country — as of February 29 this year, Reliance Jio had 478.51 million subscribers, Bharti Airtel 269.63 million, and Vodafone Idea 126.56 million, accounting for 96% of the market.

The rest are serviced by hyperlocal internet service providers and smaller brands.

However, last December, a new player entered the market with affordable plans for comprehensive home entertainment and a fresh marketing gimmick. free televisions for early adotpers. This initial offer has since been discontinued, but Excitel had grabbed the attention of consumers in the handful of cities in which it launched — Delhi, Kanpur, Mumbai, Lucknow, Hyderabad and a clutch of tier-2 and tier-3 cities.

Now, about five months later, the company boasts a million subscribers, has earned ₹500 crore in the 2023-24 fiscal — ₹1,250 crore since its inception — and plans to expand its presence to more than 55 cities across the country.

In an exclusive interview with CNBC-TV18, Varun Parischa, COO of Excitel, says they are under no illusion about the uphill battle that they face to be considered in the same league as the established players. However, he is confident that there is enough in their offerings to ensure that Excitel eventually gets there — on the strength of the affordability and versatility of its services.

For context, Excitel currently offers plans in four categories — WiFi only, WiFI+OTT, WiFI+OTT+IPTV (Internet Protocol Television, or live TV streamed over the internet), and WiFi+IPTV.

Excitel’s plans (unlimited data)

Parischa said Excitel’s plans offer a better proposition than its like-for-like competition, Airtel’s Xstream Fiber service — which starts at ₹499 per month for 40 GB of data. Excitel offers unlimited data with a starting speed of 200 Mbps for about ₹424 a month.

He cited the example of consumers paying separately for cable and a decent internet connection and said, “When I combine the two, I can offer at anywhere between ₹550-650 both TV and internet — we can offer the customer all the main general entertainment channels, sports channels — predominantly cricket — in HD format, plus 200 Mbps unlimited internet at ₹550.”

Parischa said only 3.5 crore of the 35 crore homes in the country have an internet connection, which is a 9-10% penetration, which in his words is lower than Bangladesh or even Nepal. “So, a country which aspires to be the third-largest economy in the not-so-distant future, and clearly is on the path to get there, you cannot have such low broadband penetration. And the missing piece in the puzzle was the regulation which prohibited us from covering TV earlier. Now, this is possible. Riding on this TV wave, we can truly go to a consumer’s home and say we can deliver world-class entertainment at a super affordable price and quality which is reliable. I think this would unlock a lot of potential,” he said.

The key differentiators that set Excitel apart, according to Parischa, are speed and reliability. “Airtel Xstream and Excitel serve the same consumer need, but we offer far more speed as compared to what Airtel offers. That is one big differentiator,’ he said.

“The second is, in any Indian city — Pune, Mumbai, Delhi — you can very distinctly divide the city into two parts: One which is very developed, so all the telcos, Airtel, Jio have always gone there and this has been their primary focus area. Excitel, on the other hand, has focused on a relatively cluttered and unplanned urban landscape, which is typical of about 65-70% of any Indian city. We tend to focus on this 65% of the market — we go deeper and bring high-quality FTTH (fibre to the home) service to Bharat, not just India,” he added.

How does the service work?

Excitel has tied up with an IPTV service to develop an app. So, when the service is set up, the only piece of hardware that is installed is the broadband router. The technician then installs an app on your smart TV, through which the user can access all general entertainment channels (GECs), and based on the plan they opted for, OTT services as well.

“We have Disney Hotstar, Sony LIV, and Zee5. Our integration with Amazon Prime is in the works and should be launched in two o three months,” Parischa said. “We have a whole array of specialist apps, too. So for people who want to watch Formula One, we have Fancode. For people who want to watch boutique Hollywood content, we have Lionsgate. For people who want to watch documentaries, we have Docubay and Nebula. This is the total app bouquet we bring to the consumer in the ₹600 price bucket,” he added.

What about streaming quality? “That is determined by your subscription with the app directly. You get the service from the app, but the bill is generated by Excitel.”

So, instead of paying a monthly or annual subscription fee to different apps, you just pay Excitel a fee and get all your services from one provider. There is one exception, though. Excitel doesn’t support Netflix as, according to Parischa, “We don’t see a big overlap between our customer base and Netflix customer base.”

David vs Goliath battle

There’s no denying that Excitel is a small player on the same field as behemoths who have had their foot in the business for years if not decades. How does Excitel hope to attain the same level of instant brand recall as Airtel or Jio? Once it has that level of brand recall, half its job is done.

“We’re still getting to the point where half our job will be done. But it is exceptionally hard; it’s a David versus Goliath scenario. We are in a space where the need we are fulfilling is being fulfilled by two mega giants in the form of Airtel and Jio. So it’s a very crowded market — you have these big telcos with a massive, unaided brand recall at one end, and then you have very small, regional, sub-regional local players, who limit your ability to charge a reasonable price at the bottom,” he said.

While Parischa says there is a long way to go before Excitel will be seen as one of the top three in its category, what has worked so far in its favour is geographical success. It’s a very experiential brand — till somebody uses it and realises how the 200 Mbps FTTH connection changes their life vis-a-vis what they were using earlier, it won’t resonate with them. We depend upon our existing customers referring it to others — word of mouth.,” he said.