Optic fibre company STL-Sterlite Technolgies will invest approximately 850 crore for capacity building in the next two years, in the run-up to the deployment of 5G networks by Indian operators, .

In an exclusive interaction with BusinessLine, Ankit Agarwal, STL MD said, “in terms of capacities, the total capex this year will be Rs 500 crore and next year Rs 300-350 crore. This capex investment will ensure that we have the capacity and capabilities to meet the requirements of the Indian and global markets.”

STL gets 70 per cent of its business from global markets, and 30 per cent from India. Agarwal said both its Indian and global markets will see growth following the deployment of the 5G network as well as the proliferation of fibre-to-home internet services. “We believe that the ratio (70-30) will continue as all our markets anticipate growth. This ratio could move down to 60-40, with 40 per cent of our business coming from India, from 5G as well as the BharatNet project,” noted Agarwal. 

Key growth levers for STL in India are the 5G capex cycle and the BharatNet project. STL hopes to be a prospective bidder for the BharatNet tender to deploy high speed broadband in rural areas using an optic fibre network. 

The BharatNet project is a high-speed rural connectivity project that has been in place for more than a decade. Last year, the government revamped the project in the public-private partnership model, allowing the entry of private players such as STL and TechMahindra. While the government committed Rs 17,900 crore in viability gap funding to attract private players, the tender did not receive any bidders. BusinessLine previously reported that this has motivated the government to revamp the project once again. This time they are willing to foot the entire capex for the project in order to attract private enterprises to set up and run the network. The tender is expected to be out by September.

“On BharatNet, there is a real desire to execute this project in the next three years. And the ambition is to not only take it to the gram panchayat level, but also to the village level, which we believe is a positive development,” said Agarwal.