Sterlite Technologies Limited plans to spend about ₹800 crore over FY23-24 on capex as it expands its fibre and optic cable manufacturing capacities amid heavy infrastructure spending by telcos that begin rolling out 5G services starting next month.
The Vedanta-owned firm is aiming to break into the top three in the optic fibre market on the back of growth expected in 5G, and is looking to introduce products such as fibre to small cells and towers for rural connectivity as well as enterprises including data centres. It will also launch fibre-to-home solutions at the India Mobile Congress on 1 October.
Ankit Agarwal, managing director of STL said the company was in discussions with telcos and enterprises to deploy fibre which will support the 5G services even as it looks to participate in tenders for Bharat Net, the government’s mega digital infrastructure project which aims to take broadband connectivity to rural areas.
“Our ambition is to be among the top three in the world in the optical market which is about $20 billion is size, so its an opportunity for us to scale up in the optic fibre cable and connectivity (business),” he told Mint. The firm makes network deployment and system integration equipment for fibre as well.
STL exports about 80% of its optic fibre cable and network products to global markets including the US and Europe where it has a 14% market share. It is banking on the growth of mobile consumer base globally that is expected to grow from the present 700 million to over 1 billion in the next four to five years.
Agarwal said fibre density in India will have to scale up to cater to millions of 5G mobile and home wi-fi users, which will provide it yet another upside in revenue growth.
The company which has set up data networks for the Indian armed forces, will expand its fibre capacity to 42 million km from present 33 million km for which it will invest ₹500 crore in FY23, and ₹300 crore in FY24, Agarwal said.
“We should grow at about 20% year-on-year on revenue which will come to ₹7,200 crore, of which our main business of optical should reach EBIT of 20% by Q3 or Q4. The intent is to bring down the debt to sub- ₹3,000 crore from present level of ₹3,200 crore,” he said. Livemint