P&L Management: How to Drive Profitability While Expanding

In an interview with Industry Outlook, Varun Pasricha, Chief Operating Officer, Excitel Broadband describes how broadband operators are balancing cost reduction and fast growth across urban areas. He highlights the importance of local partnerships for last-mile rollouts, infrastructure sharing, and how network optimization using AI is reducing operating costs. Pasricha points out that with growing demand for broadband internet, especially with the migration to IPTV and smart home applications, broadband operators must reposition their price plans, adjust to regulatory developments, and seek alternative strategies to stay competitive and profitable in an evolving digital landscape.

How are broadband providers ensuring cost efficiency while expanding into high-demand cities?

Every local cable operator has a choice. The last mile infrastructure, due to the sheer extensive lengths it has to cover, requires the industry to find ways to, co-opt and work with local entrepreneurs. To create a structure, owning everything end to end is not necessary but there is a need to build tools, technologies, and frameworks that enable a distributed setup—so that the burden of deploying the last mile in a country as extensive as ours can be passed on to the right people, who have the right motivation and the right incentive structures to deploy it.

The second important point is that wherever these networks already exist, as an industry, we need to find ways to start sharing these networks. These are areas we don’t need to compete on—we should compete on the brand, on customer service, and on the value addition we aim to deliver to the customer. The infrastructure layer can easily be shared. Before Jio came in, there were around ten different mobile companies and all of them were able to scale quickly due to this shared model. A similar framework needs to be developed for the fiber-to-the-home wire line setup.

How will new telecom regulations such as the TROI recommendations on revenue sharing and infrastructure sharing impacting broadband profitability and expansion decisions?

The TROI recommendation on infrastructure sharing is a big step in the right direction. If the infra can be shared, it allows many wireline companies to be able to thrive in the market. It splits the cost burden. Also, it's good for the environment in cities. If infrastructure is not shared, everyone will put a wire on the street, the streets and the poles will start looking messy, cluttered, and they will also be a health and safety hazard. So if that infra can be shared, then there can be a specialist company, specialist provider, or an entrepreneur, which puts that infra and everyone gets to ride and share it, also it allows a lot more, smaller, customer-focused players to operate in the market inside. If India has to go from 10 percent broadband penetration to more like the Southeast Asian level of 60 percent to 70 percent broadband penetration, it has to be done via infrastructure sharing.

How are broadband providers restructuring pricing models to sustain profitability?

The broadband segment continues to perform well compared to the mobility sector. From an Average Revenue per User (ARPU) perspective, it is relatively stable compared to the mobile industry from 2015 to 2019. There was a significant decline in the wireline space, but the ARPUs across both large telcos and smaller, niche telcos have largely remained within the 500-rupee range. This is a good ARPU from both the supply and demand sides—it is affordable for households and closely aligned with the amount households were previously paying for cable TV. To that extent, it's good for a replacement to meet their entertainment needs in a more modern way. At the same time, the industry is doing well at this current ARPU level. As long as the ARPUs remain steady or grow slightly, the industry is in a favorable position from this perspective.

How are AI-driven network optimization and predictive maintenance helping broadband companies reduce downtime and operational costs while scaling their service reach?

The primary reason Internet and broadband penetration will rise from 10 to 70 percent or even higher is that the Internet is becoming the main driving force of entertainment in households. When televisions begin to operate through the Internet rather than traditional cable TV, it will lead to a significant demand boost for the industry. If all internet companies are going to become the primary vehicle for delivering entertainment content to households, then it becomes crucial to invest heavily in world-class customer service and automation.

AI is playing a significant role. We have an AI client embedded in each of our routers deployed in customer’s homes, which detects customer behavior and identifies device locations. Sometimes slow speed may occur because the user is too far from the router. Our AI tools work in real-time to optimize the customer’s in-home Wi-Fi experience. The second important layer is at the network level. It is important to have an intelligent system that continuously monitors the network. AI plays a critical role in maintaining network security, protecting it from cyberattacks, and ensuring that customer’s homes are safe from cyber threats.

You can be able to detect any DDoS attack at its source. For example, if an attack originates 5,000 kilometers outside of India, you don’t want it to reach your network and disrupt services near your core infrastructure. By that point, the damage may already be done. Instead, you need AI agents or tools that monitor the global network, receive data feeds from various sources, and can identify such attacks at the point of origin and scrubbing them before they reach your network. Across customers, the in-home Wi-Fi experience also requires the use of AI to ensure that the user experience remains consistently optimal. AI plays a vital role in traffic management and network optimization, ensuring smooth and secure connectivity.

How are fibers ISPs mitigating risks to profitability while competing in last-mile connectivity?

High-capability wireless technologies complement fiber-to-the-home (FTTH) in providing coverage across the entire population, as different topographies are better suited to different technologies. In dense urban environments, where population density is as intense as cities there is no substitute for FTTH, since 5G fixed wireless access (FWA) requires a clear line of sight.

In cluttered streets and urban areas where the distance between homes is minimal, and detached suburban-style housing is rare due to limited space and higher investment requirements, FTTH proves to be more cost-effective than 5G-based FWA. Moreover, it is up to twenty times cheaper than satellite-based services.

From a cost economics perspective, densely populated urban environments are suited for fiber-to-the-home (FTTH) deployments. In contrast, rural areas, suburban farmhouses, resorts, and other remote areas are where wireless technology starts to have an edge over fiber-to-the-home deployments over violent deployments. In Jio most of their 5g-based FWA deployments have taken place in towns and cities beyond the top 1000 towns in the country. So these are lower population, low-density clusters, where 5g-based FWA proves to be a practical and efficient solution.

What monetization strategies—beyond traditional subscription models—will be crucial for broadband providers to sustain long-term profitability amid rising expansion costs?

In terms of long-term monetization opportunities, the first area—which is already underway— we are powering entertainment in the consumer zone. Initially, this was limited to ISPs and telcos bundling OTT streaming services. However, we are now moving toward bundling and becoming the sole providers of IPTV services. The 5 crore homes currently relying on cable TV are expected to gradually transition to internet services and start using IPTV. This shift will become the second major volume driver for the industry.

These are some of the natural directions in which we see the industry evolving. However, entertainment remains the most significant value-added service. IPTV is likely to become the largest value-added offering that internet companies can provide to their customers—followed by more advanced services such as cloud storage, surveillance, IoT solutions, smart home integrations, and more.