Internet broadband service provider Atria Convergence Technologies has earmarked between ₹1,200 crore and ₹1,500 crore towards capital expenditure over the next two years. About 60% of this would be spent in building underground networks to reach customer homes.
“A substantial part of the capex, about ₹500 crore, is meant for Chennai alone,” said Bala Malladi, chief executive officer, Atria Convergence, which markets its fibre-to-home services under the ACT Fibernet brand. Delhi, where the company recently unveiled its service, would also account for a part of the capex, he added.
Asked about the need for funding, he said, “We are a free cash flow company, even after accounting for capex. We have a minor level of debt. Between debt and equity funding, we are covered for the next few years.” Private equity funds True North and TA Associates together account for 90% stake in the company, he said.
ACT’s fibre-optic cables connected to homes help provide Internet broadband services.
It currently has 1.2 million subscribers across 11 cities, with 6,500 employees, and provides the ‘highest traffic of broadband per customer’, he said. “Each of our subscribers consumes, on an average, 90 GB of data per month with 40 mbps as the average speed,” Mr. Malladi said. The company has about half a million subscribers in Hyderabad and another half a million distributed between Chennai and Bengaluru.
The company saw 40% growth in revenues to ₹1,300 crore for the year ended March 2017.
Content services
ACT has also set its sights on content aggregation. According to Mr. Malladi, “We would like to ally with content providers and offer content access to our subscribers through our platform. The platform, which will allow for seamless access of content, is under development.”
The firm currently provides free content as part of trial offers to subscribers, from Hook, Hungama, Yupp TV and Alt Balaji.
Asked if higher profit margins were the reason for the move, Mr. Malladi said, “The objective is not margins. But beyond providing access, we would like to delight customers through such additional services.”
