Excitel eyes Rs 200-crore fund raise, to expand to 50 Indian cities

Broadband service provider, Excitel plans to raise Rs 200 crore (US$ 28.37 million) in funding as it plans to expand FTTH (fibre to the home) deployment on its network and establish presence in 50 cities by December 2021.

Currently, the company has about 4 lakh subscribers and operates in nine cities including Delhi-NCR, Hyderabad, Bengaluru, Vijayawada, Kanpur, Lucknow, Jaipur, Jhansi, and Guntur.

According to Excitel CEO Mr Vivek Raina, wireline broadband is a highly unserved category in India with about 2 crore users for a population of 120 crore people.

"Telcos, traditionally, have been focussing on pockets of Indian cities for rolling out wired broadband services and these pockets are either high-end colonies or multi-story buildings where deployment is easy but that is 20-25 per cent of the city," said Mr Raina.

He added that the company's approach is to partner with local cable operators and local Internet operators, particularly to get coverage in the 75 per cent of the city which other operators/telcos are unable to cover.

He said that the company is in talks with investors to raise Rs 200 crore (US$ 28.37 million) in funding.

"This will be utilised for expansion and FTTH (fibre to the home) deployment. The transaction is expected to be closed by October this year. We are talking to various investors. We had previously raised about Rs 50 crore (US$ 7.09 million) from investors in Europe," he said. 

Presently, the company has 1,100 partners and is working on expanding the network of 2,500 partners by the end of 2021.

It has also set aim to expand its user base to 5 lakh users by December 2020 and double it to 10 lakh by December 2021. This growth will come on the back of the company's expansion to 50 cities by December next year, including state capitals and class B cities like Mysore, Mangalore etc.

He added, "By end of 2020, we will sell only FTTH. The plan is to start converting legacy (copper) infrastructure to fibre starting next year and in 2021, complete the transition to completely fibre. The investment will be made by both Excitel and the local partner".

According to the Telecom Regulatory Authority of India (TRAI) data, the number of broadband subscribers had increased from 681.11 million at the end of February 2020 to 687.44 million at the end of March, with a monthly growth rate of 0.93 per cent as per the reports received from 342 operators. This consist of wired subscribers, mobile devices users (phones and dongles) and fixed wireless subscribers (Wi-Fi, Wi-Max, point-to-point Radio and VSAT).

The number of wired subscribers stood at 19.18 million at the end of March 2020.

Around 98.99 market share were held by the top five service providers at the end of March 2020. Reliance Jio Infocomm Ltd had 388.39 million users, Bharti Airtel (148.57 million), Vodafone Idea (117.45 million), BSNL (24.50 million) and Atria Convergence (ACT) (1.61 million).

The revenue of Excitel in FY20 was of Rs 135 crore (US$ 19.15 million), and the company is targeting a top-line of RS 200 crore (US$ 28.37 million) in the ongoing fiscal, said Mr Raina.

It provides employment to approximately 3,000 people, directly and indirectly (partner staff), and plans to double to around 6,000 people by the end of 2021, he added. 

"Pre-COVID consumption was about 7-8 GB/day for a subscriber, and this has increased to 11-12 GB a day. People are working and studying from home, which is driving higher consumption. Since lockdown began, we have added 52,000 new users of which 30,000 were in Delhi-NCR alone. There has been a 30-35 per cent increase in sales per month since lockdown," he added.

 

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.