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Sep09: Sify’s Consumer Business Slides; Expects Price, Margin Decline

logo-sify1Once a contender in the consumer services space in India, Sify Technologies‘ shift towards enterprise services, has co-incided with the decline of its consumer services business. Why doesn’t Sify look to exit its access business, given the significant continuous decline in both its e-ports (cybercafe) and broadband to home businesses? The company appears to be focused more on its enterprise business. Chairman Raju Vegesna noted in the earnings conference call – “Bandwidth prices will continue to fall, but along with that, the price to the customers will also fall. This will erode margins.” But there is opportunity for scale: Vegesna believes that penetration has reached a point where it can begin to scale exponentially soon, “and there will be positive changes in the environment with the government.”

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For the quarter ended September 30th 2009, Sify Technologies reported a 32.5 percent in its consumer business, with revenues of $4.9 million, down from $7.26 million during the corresponding quarter last year. Sequentially, revenues for the consumer business were down 8.92 percent. Sify’s enterprise business, at revenues of $30.41 million, is now 6.2 times its consumer segment.

Consolidated & Enterprise Services

Sify reported revenues of $38.28 million for the quarter, up 17 % year on year, and 11.54% sequentially. Enterprise services registered strong growth from data centre, managed voice and systems integration services, according to the company. Net Loss for the quarter was $ 2.36 million as against a Net Loss of $ 6.12 million in the same quarter in the previous year, and a Net Loss of $ 3.35 million in the immediately preceding quarter on a comparable basis. Sify COO CVS Suri said that all five enterprise business segments – managed network, data centre, applications, managed voice and systems integration services – registered strong growth during the quarter.

Sify ended the quarter with a cash balance of $ 5.36 million.

Access and Consumer Services

Sify’s broadband services business continues to decline: a 30.46% year on year (11% quarter on quarter) decrease in subscribers. The current product portfolio was enhanced with the launch of a new set of products. These are an extension of our data transfer products with specific focus on enhancing night time usage. Sify will continue its focus on expansion with new partners, promotions, new products and customer upgradation.

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sep09-sify-kpi-medianama

e-Port Cafes

Over the past year, Sify has switched from a cybercafe model to an e-port model, which includes the kiosk based e-port express, with a focus on services. During the quarter, Sify tied up with OTA Via for flight booking, Center for Development of Advanced Computing, for an assignment related to the Government of Punjab.

It’s worth noting that the number of operational e-Ports has declined 9.15% quarter on quarter and 22.88% year on year.

Interestingly, the company launched the e-port locator, which helps users get a list of Sify e-ports located in an area via a text message. This is probably to address the issue of a significant decline in usage of Sify e-ports: active e-port/Cybercafe users declined 50.88% year on year, and 21.94% quarter on quarter.

Portal

The company has, yet again, revamped its homepage. Sify Finance has introduced live updates on the stock market along with relevant buy/sell recommendation by experts. Sify.com is now available to users on FaceBook, as well as on Twitter.

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Related:

Sify Hives Off E-Learning, Software Business; FY09 Portals, Access Business Details
Sify Appoints President, Consumer Infrastructure Services; What Restructuring?
Q1-10: Sify Losses Reduce; Consumer Revenues Down 30.82%; Samachar.com Mobile

Written By

Founder @ MediaNama. TED Fellow. Asia21 Fellow @ Asia Society. Co-founder SaveTheInternet.in and Internet Freedom Foundation. Advisory board @ CyberBRICS

MediaNama’s mission is to help build a digital ecosystem which is open, fair, global and competitive.

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