The Growth of Tikona Digital Networks

Tikona Digital Networks, launched in 2008, has been a popular name and is deploying broadband services in 25 cities across India.

Growth story of Tikona Digital Networks

During the company’s launch, the global economic environment was unstable. However, Tikona managed to raise funds amounting to $110 million from international companies like Goldman Sachs, Everstone, and Oak Investments. During that time, 4G was non-existent; teledensity was 80%, while broadband penetration was only 1%. When other companies were looking for voice spectrum, Tikona opted for wireless broadband. With wireless and 4G coming to India, the potential of broadband has increased substantially.

Tikona established its business on a free-for-all spectrum. It offers plans with speeds of up to 4 Mbps. As a result, it has lightened its risks by earning profits from the unlicensed spectrum.

Tikona has its headquarters in Bhandup, Mumbai. It acquired HCL Infinet, a networking services company, in 2011. Subsequently, Tikona got some bigwigs as customers like HDFC, Cipla, IndiGo, and Mahindra. The price Tikona bid for 4G was six times lesser than what other companies bid for 3G. The circles acquired by the company will cover 30% of the population.

Current scenario, Tikona Digital Networks

At present, Tikona has 2.5 lakh customers spread out in 25 cities. This consists of 12,000 SMEs and 1,000 large corporations. It has also acquired 4G licenses and spectrum in five states. This presents a huge market for the company.

The average revenue of the company per user is INR 600. The company reached the profits in its third year itself whereas other broadband companies generally take 12-14 years for leveling out.

Broadband is distinct from voice technology. It needs Information Technology (IT) support round the clock to solve any problems. Tikona has a wide experience in IT services. It is all set to launch its 4G services next year. The prices of 4G will be lower than 3G because of lower spectrum rates. Only pricing and customer experience will help any operator to succeed in 4G. Tikona has an edge over other companies due to its wide experience in dealing with broadband customers. Tikona is expected to exploit this opportunity to the fullest and emerge a winner in this field as well.

Growing Broadband Users in India

The internet has evolved phenomenally in the recent years. It has gained additional popularity in India in the past few months. Some of the recent research results show that the number of broadband users in the country has been increasing rapidly.

Total number of users

The Telecom Regulatory Authority of India (TRAI) has noted that there has been an increase of 3.71% in the number of broadband users in one month. The number of users in May 2015 was 104.96 million and in June 2015 it increased to 108.85 million.

In February 2015, there were 97.37 million subscribers which increased by 1.88% to 99.2 million subscribers in March 2015. In May 2015, broadband users in the country crossed the 100 million mark for the first time. The number of users is increasing by 2% every month.

Increase in varied segments

Out of the total number of subscribers in June 2015, 15.70 million use wired broadband services while 0.45 million people use fixed wireless services. Wi-Fi and associated services are considered as fixed wireless services. The remaining majority 92.70 million users use the most popular service which is mobile broadband. The same subscribers in May 2015 numbered 15.56 million, 0.44 million and 88.96 million, respectively. This means that there has been an increase of 0.90% in the number of wired broadband subscribers, 1.96% in the number of fixed wireless broadband subscribers and the highest—4.21% in the number of mobile broadband subscribers.

Broadband as per TRAI is data connection that has a minimum speed of 512 KBPS. In 2014, TRAI altered its definition and changed the minimum speed to 256 KBPS.

Decrease in wireline services

Apart from the increase in popular segments, there has been a decrease in the use of wireline services because of the increasing trend of wireless technology. The number of users declined by 0.44% as there were 26.27 million users in May 2015 and 26.15 million users, a month later. In urban areas, wireline users including those for Tikona Broadband were 81.27% in June, this year while the rest were from rural areas.