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

Broadband service provider Excitel is in talks with investors to raise Rs 200 crore in funding as it looks to expand FTTH (fibre to the home) deployment on its network and establish its presence in 50 cities by December 2021.

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

Excitel CEO Vivek Raina said 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 percent of the city," Raina told PTI.

He said the company's strategy is to partner with local cable operators and local Internet operators, especially to get coverage in the 75 percent of the city which other operators/telcos are unable to cover.

Talking about expansion plans, Raina said Excitel is in talks to raise about Rs 200 crore 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 6 million euros (about Rs 50 crore) from investors in Europe," he said.

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

It also aims to increase its userbase to 5 lakh users by December this year 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.

"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," he said.

The Telecom Regulatory Authority of India (TRAI) data showed that 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 percent as per the reports received from 342 operators.

This included wired subscribers, mobile devices users (phones and dongles) and fixed wireless subscribers (Wi-Fi, Wi-Max, point-to-point Radio and VSAT).

Of these, the number of wired subscribers stood at 19.18 million at the end of March.

The top five service providers in the total broadband subscriber base constituted a 98.99 percent market share at the end of March. 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).

Excitel had clocked revenue of Rs 135 crore for the fiscal ending March 2020, and the company is targeting a topline of Rs 200 crore in the ongoing fiscal, Raina said.

The company directly and indirectly (partner staff) provides employment to approximately 3,000 people and this will have to be doubled to around 6,000 people by the end of 2021, he added.

Raina said the company has seen strong growth in usage by existing customers as well as new subscribers coming onboard.

"Pre-Covid-19 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 percent increase in sales per month since lockdown," he added.