“Our network is presently going live in 350 rural SDCA headquarter towns”: Prakash Bajpai, Founder, MD & CEO, Tikona Digital Networks
How do you see data revenue in India?
Given the initial stage of broadband infrastructure readiness in India, data is a big opportunity for all operators to provide high speed Internet to ever-increasing volume of smartphones for mobility application as well as to offer high capacity multi-device connectivity in fixed broadband application i.e. home and office. Key drivers to success are all-pervading coverage for mobility whereas the same for fixed broadband is large capacity, ultra-high speed and cost/GB.
By and large 80 percent of data consumption comes from indoors i.e. home or office whereas 20 percent of data traffic comes from mobility service via smartphones. In terms of revenue however fixed broadband may contribute around 40 percent of overall data revenue whereas mobile data revenue contribute 60 percent. Thus driver for fixed broadband and mobile data success are different. Also operators in mobile space are required to offer a composite voice and data solution and therefore must achieve excellent coverage inside buildings and all pervading outdoor surroundings including highways, remote locations etc.
How has Tikona performed in the last seven years?
Right from the inception, Tikona has remained focused in creating a reliable, affordable, modular and scalable architecture to offer multi-device high capacity home broadband solution which can substitute the highly capital intensive and difficult to scale conventional wireline model using fiber cable and copper plant. In India, wireline last mile plant is very scant and that too limited to central districts of large cities whereas now high speed Internet is a basic essential requirement for all homes and offices whether in outskirts of cities or in tier 2 and tier 3 towns. We have worked hard, innovated with technology and have perfected a scalable model using 4G wireless technologies in both unlicensed spectrum (802.11x based WiBro (wireless broadband) model suitable for dense urban pockets) and licensed 4G LTE-TDD spectrum which offer world-class high speed experience up to 10 Mbps for large data consumption of 10 GB to 200 GB download per connection.
Both models offer the opportunity to provide abundant data at typically 1/6th the cost structure of mobile data network. Tikona WiBro network is present in several markets of Top 25 cities where we have provided fixed broadband through WiBro model to more than 300,000 subscribers. With on-going perfection and constant innovations with technology, we are pleased to see geometric growth in data usage by our customers.
Two years back, the average data consumption was 8GB/month per connection but now average data consumption is 22 GB/month per connection. We continue to build on our strength and have leveraged the learning and innovations of WiBro model to build high capacity and even higher speed 4G LTE-TDD network using 20 MHz spectrum which provides ubiquitous fixed broadband coverage for each and every household and businesses in the coverage city. Of course this model is extensible to provide mobility data application with additional investment.
You have been focusing on fixed broadband for a long time. First, you perfected fixed broadband through unlicensed band and in Varanasi you are planning to perfect BWA spectrum for fixed broadband services. How have you perfected these models for fixed broadband services?
4G LTE provides high spectrum efficiency in 2300 MHz band and we have 20 MHz spectrum out of which 15 MHz is assigned for downlink i.e. 3 times higher than 5 MHz available in other spectrum bands allocation so far. We have further focused on design, innovation, special techniques and algorithms with respect to scheduling of packets, special antenna technology which minimizes wall losses and maximizes radio link budgets with high noise rejection. In Varanasi, we are providing 10 Mbps home broadband starting at Rs 700/month throughout the city.
What’s your plan for fixed broadband services in 5 circles?
To build our network in 5 circles – UP (E), UP (W), Gujarat, Himachal Pradesh and Rajasthan we are finalizing the network design, execution plan and aggregate sourcing of fiber backhauls from all private and public operators. There are 20 million households in cities and towns in five Tikona circles. After proving the superior customer experience, market share acquisition and unit economics of Tikona’s unique fixed broadband business model in Varanasi we will plan to replicate this model in other cities. Our network is presently going live in 350 rural SDCA (short distance charging area) headquarter towns in 5 circles. We may also be able to broadband enable the villages in these SDCAs to support government initiative of Digital India subject to commercial viability and support.
We will aspire for dominant market share and a lion share of entire Internet traffic share of the covered cities and towns via fixed broadband services. There is a large emerging potential in smaller towns and villages as well. Also based on market needs we can explore the options of combining our spectrum and network capabilities with other mobile telcos to build additional underlay network for mobility data services. A high capacity fixed broadband 4G connection at home together with bundling of mobility services for all smart devices of home, can potentially build strong and competitive FMC (fixed mobile convergence) offers.
Who are your financial partners in Tikona Digital Networks?
Tikona’s financial partner include: Goldman Sachs Asset Management, IFC, Oak Investment Partners, Everstone Capital and L&T Infrastructure Finance. In 2014, Tikona has successfully raised $45 million fund and the round was led by IFC along with existing investors.
Who are your technology partners in 4G services?
Tikona has selected ZTE as technology partner to supply end-to-end TD-LTE equipment for building high speed broadband network. Under the contract ZTE will deploy TD-LTE switching and radio equipment for all five circles. For 4G WiBro, Tikona has signed up with Ruckus Wireless, Oracle and Ubiquity.
What’s your revenue and subscriber projection for Tikona Digital Networks?
In 2016, we will rollout broadband services in all the five circles. Our focus is to perfect technology and provide better broadband service to our consumers. We are planning to double our revenue and subscribers every 18 to 24 months for the next several years, given the large scale opportunity in fixed broadband and potential up scope in mobile broadband services.
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