Go Back

Vindhya Telelinks Limited BUSINESS REVIEW AND OUTLOOK The tender for much-awaited BharatNet Pha...

Posted: 30 Dec 2024

Vindhya Telelinks Limited BUSINESS REVIEW AND OUTLOOK The tender for much-awaited BharatNet Phase III connectivity project from government driven segment has been floated by BSNL on turnkey basis for connecting all the Gram Panchayats (GP) across the nook and corner of the country with huge roll-out plan for establishing a robust optical fibre cable network, thereby bridging the rural and urban telecom infrastructure availability which will propel e-agriculture, e-commerce, availability of citizen services being offered by government in a big way. This is part of Government of India’s ambitious ‘Digital India’ project to make available to all citizens of the country with an affordable digital service. This proposed network is envisaged on an open architecture build basis, which will enable all the relevant stakeholders to participate in this mammoth project. The said tender offers a reasonably good business opportunity for both Cable and EPC business segments of the Company. In addition to BharatNet Phase III, the reasonable demand for OFC is also anticipated from private telecom operators. Government of India has been in the forefront of revisiting policy framework aiming to revitalize its commitment to nurturing competition, a pivotal policy objective that mandates the presence of at least three private telecom service providers together with government owned BSNL to uphold resilient digital physical infrastructure. The Indian telecom sector is set to undergo a major transformation, driven by rapid technological advancements and shifts in market dynamics. With the advent of 5G technology, the proliferation of optic fibre infrastructure networks across the country is projected to see a significant surge in mid to long term. This growth will be primarily driven by the expansion of backhaul, tower, and small cell fiberisation initiatives. Further, with the expected expansion plans from telecom operators for the establishment of 5G networks coupled with FTTH (Fibre-To-The-Home) network expansion in India as well as in other key geographies of the world, your Company is now fully geared with requisite infrastructure in size and scale to participate in the anticipated growth story by way of supplying innovative optical fibre cable products and solutions to the telecom operators, Internet Service Providers (ISP), system integrators and turnkey contractors thereby further catapulting the Company into enhanced growth path. Certain cutting edge new variants of optical fibre cables developed by the Company conforming to stringent global standards are likely to see larger and sustainable volumes in global market directly or through subsidiaries/affiliates of leading global equipment supplier/system integrator which may provide seamless growth opportunities through increased export revenue. Overall, all these projects both government driven and private telecom operator segments coupled with planned massive roll-out of Fibre-To-The-Home (FTTH) projects may open up lot of opportunities for growth to the Company. As a testament to the emergence and unprecedented growth of cloud based services, there has been increasing investment in data centres. The rapid increase in data consumption led by expanding internet user base, government initiatives like Digital India and data localization are key growth drivers for data centres in India. The exponential rise in data traffic necessitates robust data infrastructure, leading to significant investment in data centres for high availability and efficient data management. Further, as India continues to digitize, advanced data centres could become essential to support the nation’s digital economy. Adoption of technologies such as 5G, IoT and Artificial Intelligence are also expected to significantly augment demand for data and in turn data centres. The data centres growth is driving large scale investments in the expansion of network connectivity ecosystem which is critical for high volume data transfer at low latency levels. Accordingly, as a strategic move to enhance its manufacturing capabilities, the Company is gearing up to benefit from evolving ecosystem of data centre by equipping itself for producing cutting edge specialized high fibre count of optical fibre cables, which shall provide an additional avenue of growth in OFC business going forward in this niche market segment. With a strong backing from the government by way of Budgetary support, Railway segment is executing huge infrastructure development projects. As an established player in this Railway segment, your Company is poised to grow by way of supplying the varied cable requirements for Railway applications including the Rolling Stock Cables. Renewable electricity has emerged as the preferred source of energy in varied applications and industries. Significant investments for enhancing renewable energy capacity are witnessed in both developed and emerging economies. India has ambitiously aimed for 500 gigawatts (GW) of renewable energy capacity by 2030, a crucial step towards sustainable energy independence. As of March, 2024, the country has successfully installed approximately 190 GW of renewable energy. However, to meet the 2030 target, an annual installation rate of around 50 GW is imperative which provides ample opportunities for volume growth in Solar PV Cable business of the Company. The Company’s state-of-the-art Electron Beam Irradiated Cable manufacturing facility (EBM Cable facility) is fully equipped to cater the increased volume of Solar PV Cables in domestic and global market places. The Company has witnessed increased volume of business for Solar PV Cables in European market through NKT S.A., Poland which is likely to gain further momentum in the coming years. The state-of-the-art EBM Cable facility is also fully equipped to cater emerging requirement of superior quality specialty cables viz. Battery Cables for electrical vehicles, ship building cables and EBeam Cables for certain other specialty applications which may offer new avenues of revenue growth in cable business segment. 38 VTL Despite the current global economic landscape characterized by uncertainty, volatility, and unpredictability, the infrastructure sector in India remains optimistic. Although, India’s focus on building infrastructure is well appreciated, significant infrastructure needs are still pending and continued improvements in this sector are vital to the country’s economic growth. The growth in overall infrastructure spending by both central and state governments over the coming fiscals will be driven by the Government’s focus on the development of core segments which, interalia, include irrigation, power, water and telecom sectors which underscore the immense growth potential for your Company. Additionally consistent growth in urban population underscores the escalating demand for improved infrastructure facilities, serving as a pivotal driver for increased investments in water supply and sanitation and metro facilities. These engines of growth are supported by complimentary roles of energy sub-transmission and distribution, communication and information technology, water and irrigation, sewerage, city gas distribution, system integration and gas pipelines and other social infrastructure projects. These projects shall open up more opportunities, thereby generating more business for the Company’s EPC business segment in utilizing its expertise in all the business verticals it operates to ultimately thrive and provide its value added services to global standards.