Chennai: Hathway Cable and Datacom, the cable Internet service provider, has decided to invest Rs 3 crore in its Chennai operations. Much of this investment will go towards expanding the company's 'apartment' business (connecting different flats in a complex using a router).
The company entered the apartment segment some time ago. Currently, this segment constitutes 5 per cent of the company's total business. In the south, Hathway offers cable Internet services in Chennai, Bangalore and Hyderabad. In all these cities, Hathway is concentrating in upmarket areas with a large number of personal computers.
In Chennai, the company's focus is in the areas of Kilpauk, Anna Nagar and Anna Salai, the city's commercial hubs. ''We have 80 connections in Anna Salai. Since the area is populated with corporates, the decision-making cycle is a bit long, as some corporates have to get their sanction from the head-offices,'' says Hathway manager (business development, Chennai) Arun M Rao.
Giving an overall view of the southern operations, Hathway head (sales, marketing and customer services: south India) Karthik Bhaskaran says: ''In Bangalore, we get 150 enquires every day and the conversion ratio is also good. In Hyderabad we are concentrating in areas like Banjara Hills and Jubilee Hills.''
According to Bhaskaran, the subscriber profile in the three cities is similar. ''Five per cent of our subscribers are apartment / router customers; 80 per cent are subscribers to our 'Silver' schemes (predominantly home); 13 per cent are 'Gold' scheme customers (largely commercial); the balance are leased lines and others.''
''Currently our subscriber base is 3,500 (Chennai: 1,300; Bangalore: 1,600; Hyderabad: 300). We will be targeting 40,000 PC-owners in the three cities,'' adds Bhaskaran. In terms of revenue, the average billing is higher in Bangalore than the other two cities. ''Chennai customers are conscious of the download limits and do not generally exceed their monthly limits.''
The company's recent thrust on selling modems and converting low-value surfing subscribers to higher scales through innovative schemes is showing good results. ''The own-your-modem scheme is getting encouraging response in Chennai and Bangalore. Unlike the earlier subscribers, new clients are buying modems. This saves us the bother of investing in modems and taking care of repairs and servicing,'' says Bhaskaran.
Another trend is that more subscribers are going in for yearly plan - a good sign. But in Hyderabad, where the company's service is new, clients are seeking to rent the modem so as to get the feel of the service before buying it.
But, competition is becoming stiffer day by day. In Chennai, Dishnet is offering cable Internet for Rs 995 per month and is the only serious competitor for Hathway. However, Dishnet's initial registration charge is quite stiff. The other two players, Cyberwave Internet Solutions and KMR Online, are yet to make their mark.
In Bangalore and Hyderabad, many neighbourhood Internet service providers are connecting homes using local area network (LAN) connectivity at low rates and without any download restrictions. These networks are giving Hathway a run for its money.
And in Bangalore, another big player, Zee Interactive Multimedia, also offers LAN connectivity, apart from the usual cable Internet via cable modem. Says Bhaskaran: ''In Bangalore, Zee Interactive does not operate in the areas we have wired. Further, LAN players do not stick to the 1-km radius, thereby affecting their service delivery.''
But, in terms of rates, Hathway is cheaper than Zee Interactive in the Bangalore home segment. For instance, while Hathway charges Rs 1,000 per month for 500-MB download and Rs 2 for every additional MB, Zee Interactive bills Rs 1,500 per PC per month for 500-MB downloads and Rs 3 per every additional MB downloads. Further, Zee Interactive's modem costs more than Hathway's.
In Kerala, Asianet India, a Hathway group company, offers cable Internet and cable modem at a far cheaper price.
Agreeing that Dishnet is a serious threat in all the cities, Bhaskaran is confident that his service quality will bring in new clients, mainly from positive referrals. ''Currently, 80 per cent of our new clients were referred to us by our existing clients. When other telecom players like Reliance Infocomm, Bharti and Tata Teleservices enter in a big way, we will suitably alter our business model.''
Though Hathway has introduced value-added services like net-telephony and virtual private network (VPN) in Mumbai, Bhaskaran says that such offerings will reach south India only next year. Currently, the company sources bandwidth of 30 MB (10 MB in Chennai; 14 MB in Bangalore; 6MB in Hyderabad).
Hathway, in the meantime, is gearing up towards ISO certification for its Internet service operations. ''We will be the first cable ISP in India to go for ISO quality certification,'' says Bhaskaran.