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Sify Reworking Struggling Travel Biz SifyTripz; FY10 Annual Report Details

(By Anupam Saxena and Nikhil Pahwa)

NASDAQ listed Sify Technologies is in the process of reworking its US to India travel business SifyTripz. The booking engine at SifyTripz is has been disabled. When we tried searching for a ticket from New York to New Delhi, we got the following message: “This Booking Engine is currently disabled. Please contact the service provider for further assistance.”

An anonymous tip we received suggested that they had applied for voluntary termination from IATA and ARC. Sify didn’t comment on any such plans; Pijush Das, President (Corporate Affairs) for Sify sent us a response via email, stating only that “We are in the process of redesigning our model and once finalized we shall advise you at the appropriate time.”

Sify had acquired USA based Globe Travels in 2006 for $2.5 million, 125,000 stock options and some conditional earnout payments amounting to $0.5 million. In its 2009-10 annual report, it says that it recorded $1.38 million impairment charge towards goodwill and other intangibles during 2008-09 and 2009-10, on account of the decline in business travels due to the global economic environment. Sify has two travel sites: Globe Travels / SifyTripz was focusing on the US-India sector, while Sify Travel allows booking within India.

Sify does also mentions in its FY10 annual report that during 2009-10, it saw an increase of Rs 1.53 million in revenue from the travel segment, which is a significant improvement from the previous fiscal, when revenues from travel had decreased by Rs. 7 million. But Sify isn’t a significant player in the travel business.

What Sify Might Do

Perhaps Sify will take a meta search engine approach for SifyTripz. It’s Indian booking engine is being powered by Sprice, and from what we’ve heard from our sources, Sify did approach travel meta aggregators for powering its international search. Globe Travels was operating on an OTA format, and that battle is now more or less over, with companies like MakeMyTrip, Yatra, Cleartrip and Via dominating the space. In that context, even though we don’t have a confirmation of this, a voluntary termination from IATA and ARC makes sense.

Sify FY10 Annual Report: Consumer Business Excerpts

In its annual report filing, Sify informed that its overall revenue saw an increase of 8.89% or Rs 548.02 million in the year ended March 31 2010 (FY10). The company registered revenues of Rs 6710.19 million in FY10 over Rs 6,162 .16 million in the previous fiscal.

Sify’s revenue from Consumer One services, which include Internet access services (broadband and cyber cafe business) and online portal services (sify.com and other portals),  decreased by Rs 460.74 million or 35.29% from Rs 1,305.51 million for the year ended March 31, 2009(FY09) to Rs 844.77 million for the year ended March 31, 2010(FY10).

Internet access business: Internet access business accounted for Rs 713.93 million in FY10 as compared to Rs 1128.20 million in the previous fiscal, marking a decline of Rs 414.27 million or 36.72%.

  • Broadband Services: Saw a decrease of Rs 245.21 million in broadband services revenue due to decrease in subscribers of high speed internet access (home segment). Subscribers reduced by 35.59% , from 165,000 in 2008-09 to 106,000 in the year ended March 31,2010.
  • Cybercafe: Revenues were down by Rs 134.23 million in this segment due to closure of active cyber cafes, which was caused by unexpected increase in rent in recent years incurred by franchisees. Number of cafes reduced to 1,227 in FY10 from 1,791 in FY09.
  • Voice: Sify witnessed a decrease of Rs 26.5 million in voice revenues due to price reductions offered to customers to retain existing and attract new customers to combat competition.
  • Other Internet access related services: A decrease of Rs 8.32 million from other internet access related services was seen.

– Portal services: Portal services also saw a decline of Rs 46.47 million or 26.21%, with revenues accounting to Rs 130.84 million in FY10 against the previous fiscal’s total of Rs Rs 177.31 million.

  • Corporate orders– Saw a decline of Rs 24.70 million. According to the company, this is a high volume low profit margin business, and Sify decided not to opt for orders where margins became unattractive due to the economic downturn.
  • Advertisement revenues- Decreased by Rs 23.30 million .
  • Travel services- Saw an increase of Rs 1.53 million in revenue froom this segment.

– Other businesses: Revenues from other businesses decreased by Rs 21.29 million or 3.86% to Rs 530.15 million for FY10 from Rs 551.44 million in the last fiscal.

  • IMS Services – Saw an increase of Rs 43.92 million or 17.91%. This is on account of new customer addition and increased engagement from existing customers.
  • E-Learning Services– Registered a decline of 65.21 million or 21.30% due to deferred decisions on projects by US based customers.

The company also received $12.43 million from a legal settlement, which we believe is from an out of court settlement for the case filed against Yahoo in the US. Sify had declined to comment on it, due to a non disclosure agreement.


– Content costs increased by Rs. 3.12 million.
– Payment gateway costs decreased by Rs. 6.14 million.
– Marketing and selling expenses decreased by Rs. 125.76 million due to cost effective marketing activities.
– Legal and professional expenses reduced by Rs. 68.67 million due to reduction in legal costs.

Read the complete Sify FY10 Annual report here

– Sify Disputes Subsidiary Financials
– Update: Sify Consumer Biz Revenue Down 42% YoY; Merges Portals & Access Biz Teams

– Sify Hives Off E-Learning, Software Business; FY09 Portals, Access Business Details
– Update: Sify Consumer Biz Revenue Down 42% YoY; Merges Portals & Access Biz Teams
– Sify Prepares For Decline Of Cybercafes With VAS; $3.23 Million Loss

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