In the midst of a transformation phase, Sterlite Technologies, has been trying to transform its business model from being seen as a manufacturer of optic fibres, to an end to end solutions player. The first steps of the transformation were evident when the company announced completion of Elitecore Technologies’ merger, which is a global provider of Operation Support Service (OSS) & Business Support Service (BSS) solutions.
The acquisition of Elitecore Technologies is significant as it shows the company’s intent to monetize a future which is increasingly going to be data and IP driven. For example, Elitecore has a pre-integrated platform that has the capability to monetize all IP networks including 3G/LTE, Wi-Fi, Cable, ADSL and FTTH.
Building on the foundation of fibre
The company already has a major market share in supplying optic fibre to telcos, and this is set to expand as almost all the major telecom players are rolling out their 4G networks, which requires a steady infrastructure in the form of optic fibre as the backbone. In addition, with networks like the National Optic Fibre Network (NOFN) which is now being known as the Bharat Net, being rolled out aggressively, the demand for optic fibre remains huge.
With the voice market becoming saturated, the real growth is in data, and telecom operators have started investing in technologies that improve the quality of their networks. Broadband is also becoming a necessity, and with huge government focus on enabling digital initiatives, broadband will become a vital part of the country’s investment focus. The other big factor is the huge push towards smart cities.
With projects in all these sectors, Sterlite Technologies is extremely bullish on the opportunities.
But the real growth will come from the company’s increasing focus on providing solutions and services.
Explains Dr Anand Agarwal, CEO, Sterlite Technologies, “While our focus will remain on creating the digital infrastructure to support the increasing needs of data driven applications and networks, a big part of our strategy will involve focusing on designing, creating, maintaining and managing networks. While our center of gravity will be infrastructure, we believe that there will be huge demand for companies that specialize in providing specific infrastructure tuned to applications – which is a missing piece in the market today. With our end to end solutions capability, we believe that our addressable market size now has expanded more than 20 times than the market we were addressing till date.”
The smart city opportunity
Using the optic fibre infrastructure as the foundation, Sterlite believes that it can provide services around the foundation. The firm already has a smart city solution suite which is tuned for fast and future proof rollout, with seamless integration with legacy networks. Under this smart city solution initiative, Sterlite Technologies will offer complete program management, project execution and network integration from infrastructure management to network applications.
The focus on smart cities has started paying off. For example, Sterlite Technologies was recently awarded its first smart city project under the Digital India initiative for Gandhinagar to provide smart transport solutions, IP Surveillance, Wi-Fi connectivity. Sterlite Technologies will be involved in creating a Wi-Fi city, with applications such as smart lighting and parking. Sterlite is involved in creating close to 500 access points for Wi-Fi.
In May 2016, the firm won the mandate for the Jaipur smart city project. In this project, the firm will set up citizen services kiosks equipped with environmental sensors and in installing and maintaining video surveillance equipment for ensuring public safety. More importantly, Sterlite will be involved in maintaining and monetizing the network. The firm is bullish on the smart city opportunity, and is in talks with all the twenty states identified by the center.
Betting on specialized networks
In the future, as data demands continue to grow, there will be a need for specific networks, that cater to specific industries. For example, a network in the defence sector, may need higher security. With its expertise in building networks, Sterlite believes that there is a big opportunity for specialized networks. A case in point is the recently won Rs 2,000 crore contract from the Indian army, which involves connecting defence establishments with a high speed optic fibre network.
Similarly, there is the Fibre-to-the-Home (FTTH) opportunity, where the firm has built a robust network that allows service providers like telecom operators or ISPs to use Sterlite’s network to provide services on a revenue sharing basis. The firm already has more than 1,65,000 homes that have been connected on fibre using this technology.
Sterlite is positioning its network as a neutral network, which ISPs and telecom operators can use to save their capital expenditure and create a better ‘last mile’ access infrastructure. Sterlite stands to gain, as more and more services can be added on the network such as surveillance, cable television, DTH, healthcare on demand etc.
Understanding the specific requirements of developing economies like India, Sterlite Technologies has created unique solutions. For example, in many parts of rural India, power outage is a serious issue that hampers uptime. To overcome this issue, the firm has developed an innovative solution called “Reverse Power over Ethernet (RPoE)“ that allows the network to function even if the power supply is lost.
Over the next 2-3 years, Sterlite believes that the market opportunity will rise exponentially, as the firm will be now involved in not only laying the basic foundation of networks using optic fibre, but also will have opportunities related to designing, creating, managing and monitoring networks related to smart cities and other specialist networks.