NEW DELHI: Sterlite Technologies Limited (STL) said that Indian telcos’ tower densification strategy for 5G services along with their focus on expanding their fiber-to-the-home broadband businesses will drive growth for the home-grown fiber and gear maker in the country.
Ankit Agarwal, managing director of STL, told ET that the company is placed to capitalise on the private 5G network opportunities in India with its small cells, Wi-Fi 6 and optical fiber portfolio through its right set of partners.
“…there is a strong momentum and demand in India both linked to 5G and fiber to home connectivity…operators have talked about this. In addition to that we also see a very strong opportunity linked to BharatNet which is a $10 billion opportunity. We are in various discussions both with the government and defense as well as with the telecom operators,” Agarwal said in an interaction.
The top executive said that 5G and FTTH are long-term opportunities for STL as telcos expect to complete investments towards them over four-to-five years similar to older-gen technologies loike 3G and 4G. “We will have to see how it also moves from non-standalone to standalone 5G…what’s also been positive is payment terms for the spectrum..operators will have sufficient capital to invest in desitensification of the fiber networks,” he added.
STL reported Rs 1,575 crore revenues in Q1 FY23 owing to its widespread strength across all of its business operations. Nearly 62% of the total revenue came from its focus markets of US and Europe. Large orders from these markets enabled STL to build a healthy order book of Rs 11,200 + crore.
The company however reported Rs 20 crore net loss during the quarter.
“We continue to see some challenges on the cost side in terms of elements like container costs which continue to be high along with other cost-related challenges. However, we continue to see strong business momentum and certainly growing into Q3 and Q4. In the second half of this fiscal, we do expect the profitability of the company to improve and then normalize,” Agarwal said.
In the 5G environment, telcos will need a lot of macro sites along with small cells for outdoor and indoor coverage. “This will improve the demand…on the enterprise side, there will be a lot of buildout of networks both by operators and the private sector…so I think that should also further improve the demand for fiber networks as well as our services,” he added.
Agarwal said that some of the applications around manufacturing, ports and mining associated with private 5G networks will play out in the next two-three years, offering an opportunity for companies like STL.
The company is also bullish on data centers and is in talks with global hyperscalers and local companies that are making investments to grow their presence in India and globally.
“…we are well placed here because a lot of them are looking at their standalone fiber requirements…very often they want to have captive fiber requirements connecting their own data centers and now soon probably edge data centers that will come up in cities…there is a pretty significant fiber requirement which is a positive for us. As data center market picks up, India can also be a market for us,” the executive said.