Satyam Infoway: The Acquisitions Route

Satyam

Infoway was in our list of sizzlers for 2000. And sizzle it did. It has been a

year of acquisitions for India’s first Internet company stock to be listed on

Nasdaq. After acquiring Indiaworld, 2000 was a year for Sify to acquire smaller

ones like e-chem, indiaplaza.com and kheladi.com among others. While on one hand

it focused on building its content with the acquisitions, on the other hand it

laid emphasis on building up its market share by providing quicker access,

notching up an above 3.5 lakh subscriber base by the year end. For quicker

access, it has already set up three gateways in Mumbai, Ahmedabad and Hyderabad.

Unlike other ISPs, Sify could manage to do the same as it is still flush with

cash from its two Nasdaq fund raisings.

With a $200-million kitty, it's going to be an exciting 2001 for the company.

Not many national players seem to be active in today’s Internet service

provider landscape. With an established subscri—ber base and over 100 million

page views that are also available in regional languages, e-commerce revenues

are likely to start pouring in this year. Books, perfumes or air tickets–a

variety of things are available on the Sify site. But there is nothing novel

about that as most of the national players will compete on the same front of

notching subscribers and driving their e-commerce business. However, Sify is a

step ahead and with its ATM backbone in place, it will aggressively target the

corporate segment with a host of services like data centers, EDI, VPN, security

services and network management services.

Sify has some clear advantages over several other ISPs–own bandwidth

through its three gateways (and 14 others in the pipeline) and

"e"-offering to the corporate space. This is where the company will be

making revenues and more importantly, profits in the coming years. Though

currently the company is on the revenue growth path, profitability will take

some time. For the half year ending September 2000, the company had a revenue of

Rs 88 crore, while its fiscal 1999-00 saw a revenue of Rs 68 crores. Of course,

losses have also increased two-fold to Rs 79 crore from Rs 38 crore in fiscal

1999-00. But it is the increased focus on the corporate sector which will bring

it back in the black by fiscal 2001, according to international research firm

Salomon Smith Barney.

So, while other ISPs are trying to get their numbers, Sify will be in the

limelight for its corporate offerings, further acquisitions and world-class

domestic network. DQ