Armed with a brand new corporate identity and a structural revamp, Sify began 2008 on a positive note, rechristening itself Sify Technologies and changing its logo to green to reflect its growing focus on eco-friendliness. The makeover also includes integrating the various units within the enterprise and consumer businesses into these two business segments.

The enterprise business’s main lines ?? connectivity, hosting, security and applications ?? now have a unified sales force and management team. Similarly, in August 2007, the company amalgamated its portal www.sify.com, i-Way cyber café chain and Sify Broadband to Home services into a single merged consumer business.

Sify’s enterprise business, which accounts for 70 per cent of the company’s revenues, has been expanding rapidly and is driving the company’s growth. The comp-any is enhancing its enterprise business portfolio. In order to reap the benefits of the Rs 1.81 billion managed services industry (as of 2006), the company recently launched managed security services. Earlier in August 2007, it had introduced hosted contact centre solutions and premium anti-virus and antispam services for enterprise users.

During 2007, the service provider received contracts from various Indian majors including Barclays, Essel Propack and OnMobile for MPLS-based virtual private networks (VPNs), from Indian Overseas Bank for data centre hosting, and from ICICI Prudential for e-learning.

To meet the growing demand for its enterprise services, Sify is enhancing its network infrastructure across the country by about 100 points of presence per quarter. According to P.J. Nath, executive president, Sify Enterprises, “We are expanding our network on the back of large customer engagements for VPN services and strong demand for connectivity from the BFSI and retail segments.”

For Sify, which has been consistently losing market share in its consumer internet services business for the past two years, this is a new lease of life.

During the June to September 2007 quarter, the company’s market share dipped from 8.99 per cent to 7.37 per cent according to the Telecom Regulatory Authority of India’s estimates. Like other private internet service providers, Sify is finding it difficult to remain competitive without being able to access the incumbents’ widespread copper network.

Nevertheless, it is aggressively exploring other avenues and revenue streams. Having deployed the internet on its fixed wireless technology, Sify has extended services to 100 cities through a network of over 1,640 cable television operators. The company’s broadband subscriber base increased marginally from 208,000 in June 2007 to 215,000 in December 2007.

The Category A ISP has also deployed over 700 base stations and 3,500 subscriber units in over 200 cities for fixed wireless connectivity. It has also introduced direct-to-home wireless services for which it has started pilot trials in Bangalore with 200 subscribers.

Financial performance
Such initiatives are paying off. During the quarter ended December 2007, Sify registered an 8.7 per cent increment in its revenues to $38.38 million from $35.3 million in the corresponding period of the previous year. The company’s net profit before tax also increased from $1.25 million to $2.23 million during the period under review.

However, this was largely due to the increase in the company’s revenues from its corporate services segment, which grew significantly from $20.55 million during the quarter ended December 2006 to $26.23 million in the quarter ended December 2007. In contrast, Sify’s revenues from the retail internet segment fell by 19.35 per cent from $11.63 million to $9.38 million over the same period.

Going forward
The company is planning to ramp up operations further. A company spokesperson said that Sify is likely to invest around $15 million in the next fiscal year, of which $8 million will be used to open two new LevelIV data centres in Mumbai and Delhi.

On the consumer end, Sify is developing a unified platform that will integrate its iWays with content and applications such as news, sports, video entertainment and finance. “We will work with other companies for the provision of applications on a revenue-share basis over this platform, such as e-learning services for home tuition with Mathguru,” says the spokesperson.