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Aksh Optifibre - Capitalising on the growing demand for optic fibre

March 15, 2009
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For Delhi-based Aksh Optifibre, 2008 was a markedly busy year. It launched entertainment and utility services in partnership with leading telecom players such as Mahanagar Telephone Nigam Limited (MTNL) and Bharat Sanchar Nigam Limited (BSNL), to tap the growing potential of the optic fibre market.

The Indian optic fibre market has been on a high growth trajectory. In 2007-08, it posted an estimated growth of around 50 per cent to Rs 14.4 billion as compared to Rs 9.61 billion in 2006-07. Most of this has been driven by broadband services.

With the Department of Telecommunications (DoT) setting a target of 20 million broadband subscribers by December 2010, the future of fibre companies is undoubtedly very promising. Several leading telecom players are already ramping up their network rollouts, fuelling the demand for optic fibre. Further, with fibre-to-the-home (FTTH) solutions gaining attention, the demand for optic fibre cables (OFCs) is expected to increase.

This presents a huge opportunity for optic fibre manufacturers such as Sterlite Technologies, Finolex and Birla Ericsson. Aksh Optifibre is one such company that is ready to take on competition and make the best of the opportunity before it .

Incorporated in 1986, Aksh Optifibre manufactures a wide range of optic fibre, OFC and fibre reinforced plastic (FRP) rods. The company has two plants in Bhiwadi and Jaitpura in Rajasthan for manufacturing OFCs and optic fibre. It manufactures FRP at Ringus in Rajasthan. Currently, it manufactures 1.5 million km of fibre, 100,000 km of OFCs and 500,000 km of FRP rods per annum. Exports to the US, Europe, Saudi Arabia, Iran, Oman, Japan and Southeast Asian countries account for 25 per cent of its total sales.

New initiatives
In the past one year, the company has taken several promising initiatives. Capitalising on the interest in triple-play and internet protocol TV (IPTV) services, Aksh has customised affordable solutions for its customers. In association with MTNL, it launched IPTV services called IPTV-Aksh-Tel, and videophone calling services, V Spyk, in Mumbai and Delhi in March 2008.

For its IPTV project with MTNL, the company provides the content and the technology for set-top boxes, as well as software support to MTNL subscribers. The company issued global depository receipts/foreign convertible currency bonds worth $40 million in January 2008 to fund the project.

Later, in August 2008, it launched its IPTV brand, icontrol, in Kukas, Jaipur district in Rajasthan, in association with BSNL. The company claims this is the first IPTV service to be launched in rural India. Simultaneously, it announced the commercial launch of icontrol in Rajasthan, which has enabled BSNL broadband customers to avail of IPTV services. The "i" in icontrol stands for interactivity, a concept that is non-existent in conventional TV viewing. A month later, UTStarcom tied up with Aksh Optifibre to deploy the end-to-end RollingStream IPTV solution in 20 cities on BSNL's network.

With the launch of FTTH-based multi-play and high definition TV services in November 2008, in collaboration with MTNL, the company achieved another milestone. The FTTH deployment, considered the first of its kind in India, is likely to replace traditional copper lines for last mile connectivity. With the introduction of FTTH, India has now entered the same club as China, Singapore, Japan and the UK, where last mile connectivity is predominantly fibre based.

In February 2009, Aksh selected the Envivio 4Caster C4 convergence encoder to upgrade and expand its video services, making it the first "three-screens" service provider in the country. It has also launched IPTV services in Agra. The service has come with a few value add-on features such as A-Tube, a selective advertising service, and icontrol Mall, a shopping service. With this launch, it now has a footfall in 15 cities and intends to increase it to 22 in the near future.

These initiatives have helped the company witness a growth of around 125 per cent in revenues, which stood at Rs 1.17 billion in 2007-08 as against Rs 0.52 billion in 2006-07. Aksh's manufacturing division has been the major contributor to its revenues. During September 2007-September 2008, this division contributed more than 98 per cent to the company's revenues. In the near future, however, the company expects to earn a substantial portion of its revenues from the services division.

Future plans
Intending to position itself among the leading FRP rod manufacturers, Aksh plans to increase its capacity to 1 million km per annum. Accordingly, it has a greenfield FRP plant under construction in Kandla in Gujarat. The plant expected to become operational by May-June 2009 will add 33 per cent to the existing production capacity.

The company also aims to consolidate its position in the services division. In this regard, the company is tying up with several companies and fast moving consumer goods retail chains. It also plans to offer Bollywood and Hollywood content on the IPTV platform. It has tied up with Eros International and Shemaroo Entertainment for Bollywood content, and with Sony, Disney and Warner Bros. for Hollywood content. Clearly, Aksh Optifibre is looking to leverage its headstart in the Indian fibre industry to the maximum.

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