At a time when telcos such as Reliance Jio and Bharti Airtel are going aggressive on tapping the home broadband space, Delhi-based internet service provider Excitel is looking to target 7 crore unconnected urban households with its fibre broadband.
Excitel currently has presence in 28 cities with Delhi being its biggest market and the company sees itself among the top three providers of fibre broadband services in the country going forward by tapping the households in the unstructured urban areas.
“Telcos or big ISPs only go to structured areas, but 80% of the target market is in unstructured areas and we are focussing on that with our affordable internet services,” Vivek Raina, co-Founder and CEO of Excitel told Fe in an interaction. “With our model, what we do is that last mile, the last metres of cable is done by the local partners like cable operators and they have to maintain those last mile cables,” Raina added.
Excitel currently serves over 850,000 homes, and aims to increase its reach to 1.2 million households by the end of this year. On its plans to convert a major chunk of 7 crore unconnected households into Excitel users going forward, the company is also in talks with investors to raise about $30-$50 million (around Rs 408 crore) this year.
“Yes, we are planning to raise funds and about 80% of that would be used in expansion. Currently, we are not in Tamil Nadu, Kerala, and eastern parts of the country, while in Maharashtra, Karnataka, Kerala, and Andhra Pradesh, we have a smaller presence. So, these would be our priority areas,” Raina said, adding that after the upcoming funding the company might go for an initial public offering (IPO) in the next 2-3 years.
Also read: What lies ahead for women entrepreneurs in India?
The company currently earns Rs 450 on an average for a consumer. “We want to keep it (ARPUs) there. We want the users in our target areas to be able to afford the internet. We see our value in giving world class fiber-to-the-home (FTTH) access. If you want to keep it exclusive to high ARPU packets, there is no business there atleast for a player like us,” Raina said.
In FY22, Excitel’s revenue from operations rose 55% YoY to Rs 310 crore. For FY23, the company is targetting about Rs 400 crore revenues on the back of increase in demand for high-speed trusted internet on the back of increase in demand for high-speed, trusted internet.
The company is profitable in some cities where it started its operations first, but has been burning significant cash overall owing to higher capital expenditure required for expansion of the business.
Last year, the company raised about Rs 100 crore and from that about 35-40% of the funds are yet to be deployed. The company will use the funds to streamline its technology processes and softwares for a seamless customer experience.
When asked about competition from 5G services, Raina said as more people start using the network, the 5G speeds will crash. The biggest limitation of any wireless technology is the tower capacity and it’s not going to go with 5G. “Even to give a user 4G type of experience, the telcos will have to increase the towers 3-4 times in the cities. For home usage, which requires massive bandwidth, no wireless technology would ever suffice, therefore, there is no alternate for fiber broadband,” Raina said.
Currently, Excitel provides 200 mbps, 300 mbps and 400 mbps plans, starting at Rs 424 a month