Internet service provider ACT Fibernet has announced a hike in the rental rates for its broadband plans starting from June. The increased rates would be implemented in only eight of the 14 cities where the service provider currently operates in.
The company, which sent out circulars to customers including this author, says the revision would be dependent on the plans that users opt for, which mean that it would not be an across the board standard hike for all customers. When contacted by TechRadar India, the company said the hike would be in the range of 2 to 5%.
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The cities where ACT Fibernet is increasing the rentals are Bengaluru, Chennai, Hyderabad and Delhi among the metros. The rental rates would also go up in Coimbatore in Tamil Nadu besides in Guntur, Vijayawada and Visakhapatnam in Andhra Pradesh. The revised prices as per plans are likely to be listed on the company website as well as their app over the upcoming weekend.
Earlier this month, the company had reported a robust 40% spike in peak traffic, with more than 55% of this increase coming in the form of streaming. The company said the increasing demand for internet services was noticeable in tier-two cities as well as in the major metros, ostensibly resulting from the long-drawn lockdown due to Covid-19.
In an email to subscribers, ACT Fibernet says the company has maintained the prices at a constant level for two years in spite of cost increases and investments required for enhancing the service. It referred to "unprecedented challenges" in the past few years leading to increased cost of operations, which eventually resulted in this price hike.
Why the price hike?
The Bengaluru-based company had recently enhanced internet speeds to 300 Mbps with unlimited fair usage policy (FUP) to all customers who were working from home during the lockdown period.
However, the fact remains that several individual users have also shifted from wired broadband to wireless where the cost is substantially lower with speeds that are reasonable enough if one were using it for emails and streaming media. As against an average cost of Rs.700 or so for wired broadband, users would spend less than half for some of the wireless schemes that are on offer from Reliance Jio, AirTel and Ideas Vodafone cellular services.
From wired to wireless
With most households already having cellular plans that have un-utilised internet plans and even television viewing getting more and more personal, the tendency is for users to stick with the smartphones and its plans instead of having a wired broadband.
A second scenario that is adding to the pressure on the wired internet service providers is the increase in streaming media where a household is now watching four different movies on four devices instead of just one connected to the television in the living room.
So, the internet service providers are left with little choice but to increase prices for their plans as either way they are bound to suffer in the none-too-distant future.
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