Sify mulls entry into long distance telephony market

Mumbai, Nov 15 | Updated: Nov 16 2005, 05:30am hrs
Sify, India's third largest internet service provider (ISP), plans to enter long distance telephony market, by acquiring licences for both domestic and international services.

The entry fee for national long distance (NLD) and international long distance (ILD) is to be reduced to Rs 2.5 crore with effect from January 1, 2006, according to the announcement made by the communications and information technology ministry.

The Nasdaq-listed company was in the news last week when Silicon Valley entrepreneur Raju Vegesna (through Infinity Capital Ventures) picked up Satyam's 31.6% stake in it for $ 62.6 million. Vegesna also plans to invest an additional $ 37 million (Rs 172 crore) in 6.7 million newly issued shares after obtaining shareholder and regulatory approvals.

The total investment required by the Sify to enter the NLD and ILD segments will be Rs 5 crore. Under the new terms announced by the government, there will also be no roll-out obligations. Sify currently provides the last mile internet access through wireless and on cable through tie-ups with cable operators.

As an ISP licensee, it is already in the business of international telephony through voice over internet protocol (VoIP).

Sify is country's 3rd largest ISP- largest privately owned
Clocked $50 m in revenues for half year ended Sep '05
50% of revenues come from corporate services
Retail internet access, other services make up the rest
We have 1000 internet telephony booths and carry about 17 million minutes in overseas calls every quarter, a top Sify official said. Unlike the Gas Authority of India Ltd, which has also announced it would enter the NLD segment, Sify does not own any capacity but leases them from providers across the country.