With the launch of 4G and other wireless networks, high-speed internet is available to mobile-phone customers across India. But, industry hands say that broadband networks should not be written off just yet.
The Union government is aiming to achieve the complete roll-out of broadband network across 2.5 lakh village panchayats in the country by 2018, according to telecom secretary J S Deepak.
BOOM speaks to Ortel Communication, which is operating in Odisha – a state which has a huge digital divide with internet penetration at just 1.4%.
Ortel Communication is a small operator in India’s burgeoning broadband market. It is profitable but faces tough challenges. Bhibhu Prasad Rath- President and CEO of Ortel Communication talks about the road ahead.
Excerpts from the interview:
What are the top three things on your mind you would like to communicate to the investors?
We are unlike most Indian companies cable companies, we follow a B2C model. We believe in this model for three reasons. But this is more in sync with the international model. We capture the entire revenue stream. Since we have built our own network, the network is of very good quality, which is also capable of providing broadband services. This is the basic business model.
We are now regional operator—operating out of 6 states in India. We play a major role in Orissa, Andhra Pradesh, Telangana and Chhattisgarh. We have a small presence in the states of Madhya Pradesh and West Bengal. Around 31st March, we have 710,000 subscribers.
How do you see these numbers changing?
Around a year ago, we had around half a million customers. And in these two years- FY16 and FY17, we are doubling the subscriber base. I’m aiming to get around 1 million mark by 17 march.
Top 3 areas or segments opportunities for your company?
Opportunity in the cable sector is huge actually. We are aiming to get to 1 million subscribers by March 2017. It should be close to 100% digitalized by end of this year. I get around 40% digitized and 60% of the others. I want to increase my customer base. Now the subscriber base is 72,000. I maintain a pace and try to do better. All this should convert into good financials. All this should convert into top line, bottom line and EBITDA. We are a profitable company. But returns parameter will improve.
What are key challenges for company like you?
In cable segment there are low cost operators or LCOs in every country. We apply two business models- Compete with the LCO and build your own LCO base or we buy out the LCOs. And currently larger part of the growth is coming from the LCOs where we are providing exit to the LCOs, acquiring those networks, replacing it and converting to our own last mile.
Whereas the broadband is at an early stage of market, but it is in demand because of its speed as compared to mobile. So, in order to keep pace with consumer expectation of speed, we have launched a new scheme of 200Mbps speed. It starts at 500 Mbps and goes up to 1000 Mbps speed depending on the consumers’ want. We are trying to keep pace with the consumers’ expectation when it comes to the speed.
Three reasons for investments
We are one of the few companies who are in the last mile play. There are very few in the last mile play. Most others are in the B2B. We are one of the very few others who are in sync with international models. This captures the revenue stream. The markets are also growing at a faster rate.
