Bengaluru-based Atria Convergence Technologies Private Limited (ACT Fibernet) is a triple-play service provider with offerings such as broadband, digital TV, analog TV and internet protocol television. Established in 2008, the company operates in select markets including Hyderabad, Bengaluru, Nellore, Vijayawada, Visakhapatnam and Chennai.

A regional player, ACT Fibernet has positioned itself as one of the fastest broadband service providers in the country. Formerly known as Act Broadband, the company rebranded itself as ACT Fibernet in July 2014. The move was aimed at reinforcing the company’s commitment to providing an unparalleled internet experience to customers through superior fibre technology. Post rebranding, ACT Fibernet claims to provide the fastest broadband connectivity to customers. Currently, the company is offering a broadband speed of 100 Mbps with data usage capped at 200 GB for Rs 2,799 per month to its retail customers. It has also introduced high-speed broadband offerings for enterprise customers at various price points with a minimum data download speed of 250 Mbps.

Expanding footprint

ACT Fibernet is backed by private equity firm India Value Fund Advisors, which became the majority shareholder in the company in 2008. With the aim of consolidating its position as a leading broadband service provider in southern India, ACT Fibernet raised its stake to 80 per cent in Beam Telecom, a Hyderabad-based internet service provider in June 2014. The company had acquired a majority stake in Beam Telecom in 2009. Subsequently, in the second half of 2014, ACT Fibernet acquired the remaining stake in Beam Telecom and merged the company with itself.  The company had been offering broadband services in Hyderabad under the brand name Beam; however, post acquisition, it is offering broadband services in the city under the brand name ACT Fibernet.

Over the years, the company has established itself as a strong regional player with over 600,000 broadband users. ACT Fibernet plans to grow its subscriber base to 1 million by 2016. It is also eyeing higher revenues. It reported a revenue of Rs 5 billion in 2014 and plans to increase this to Rs 10 billion by 2016. Going forward, ACT Fibernet plans to make inroads into at least one new city every year. By the first quarter of 2015-16, the company plans to launch services in Visakhapatnam and eventually in other southern cities as well. Besides expanding its network in south India, ACT Fibernet plans to foray into the northern markets. The company is also open to potential acquisitions.

At present, with an annual growth rate of 50-60 per cent, the company appears well placed to support its growth plans. In 2013, Act Fibernet had secured structured debt financing from Olympus Capital Asia Credit and Kilimanjaro Netherlands BV, a subsidiary of the Kilimanjaro Credit Fund. The funds were raised to consolidate its business and boost expansion. ACT Fibernet is open to follow-on rounds to fund its aggressive expansion plans.

Challenges and the way forward

According to the Telecom Regulatory Authority of India, with 0.61 million users as of December 31, 2014, ACT Fibernet is the country’s fourth largest wired broadband service provider. The other key players in the wired broadband segment include Bharat Sanchar Nigam Limited (BSNL - 9.98 million), Bharti Airtel (1.41 million), Mahanagar Telephone Nigam Limited (MTNL - 1.13 million) and YOU Broadband (0.42 million).

Despite emerging as a strong regional player in the broadband segment, the company needs to tackle several challenges. In a fragmented broadband market, it faces competition from players such as Sify Technologies and YOU Broadband, which have a significant presence in the southern markets. These companies have deep pockets and a well-entrenched network infrastructure. ACT Fibernet’s plans for a pan-Indian presence will see it competing with established players such as BSNL, MTNL and Bharti Airtel.

Due to intense competition both at the regional as well as national level, ACT Fibernet will have to ensure faster infrastructure roll-out so as to leverage the benefits of the growing broadband market. The company will have to provide unique offerings to consumers in the home as well as enterprise segments in order to increase its subscriber base. Going forward, service differentiation will be the key to success.