Chennai cable Internet market in consolidation stage

Venkatachari Jagannathan
24 December 2002

Plagued with problems from the beginning, Cyberwave stopped its service from 11 November 2002. The company finds cable operations unviable. Customers are shifting to other service providers. It is learnt that the company is looking at other options.

The original business plan was to ask the cable TV operators to invest in the infrastructure and restrict the company’s role as an ISP. However, cable operators were not willing to invest in the two-way amplifiers and other equipment. Besides, two multiple services operators, Hathway Cable & Datacom and Sun Cable Vision (SCV), inked a non-competition deal and divided 80 per cent of the cable operator network between them. (See Hathway signs peace pact with Sumangali Cable Vision).

On the other hand, Hathway Cable and Dishnet are expanding their reach. While Dishnet is present in most parts of the state, Hathway Cable is present only in selected pockets of Chennai, in areas like Adyar, Besant Nagar, Kilpauk, Anna Nagar and Mount Road. The area restriction is due to its non-compete agreement with Sun Cable Vision (SCV) applicable for cable TV and Net-over-cable business.

Hathway is introducing new schemes that are attractive even for middleclass households. The company has changed its bandwidth provider and the service is stable. Similarly, Dishnet, after starting its services at a very high price, is now targeting the household segment with various subscription schemes. The business is also picking up. The company has appointed franchisees to push its business.

Both Hathway and Dishnet are targeting the apartments segment, connecting the flats via routers. This works out cheaper for households. But for companies, the issue is coordinating with different households in a housing complex.

There are also players like KMR Online, basically a dialup, ISDN Net service provider that moved into LAN connectivity, connecting neighbourhood houses with a cable. The attraction for the subscriber is that s/he is not restricted by any download limits as in the case of Hathway and Dishnet. Both charge fancy sums if a customer exceeds the download limits.