After taking the international long distance market with over 1,216 percent growth in just one year, Data Access seems to have stabilized in growth terms and is looking at expanding the business to new areas. In the financial year 2003–04, the ILD player achieved a 39 percent growth to net in Rs 880 crore.
Predominantly a voice player, it grossed Rs 835 crore from the ILD segment and Rs 45 crore from its ISP business. With this revenue Data Access had 19 percent of the ILD market. A majority of its Rs 835 crore came from in-bound voice traffic to India.
The international connectivity contributed just Rs 10 crore to the overall figures. Earlier this year, Data Access surprised every one when they emerged the lowest bidder for BSNL's ILD tenders in three of the five sectors on offer.
The company had its share of bad experiences last financial year and would be happy to forget its IPO fiasco. Now, Data Access has shelved the IPO plan and is taking the strategic investor route to fund its expansion plans. It has already entered an agreement to place Rs 100 crore worth equity with a consortium of investors.
In the last fiscal, Data Access also joined hands with HECL for its IPLC and frame relay, which failed due to the latency factor of the satellite bandwidth.
Its tie up with Hughes Escorts Communications was unable to bring enough data revenues and it seems the company has revisited its plans and is focusing more on voice than on data.
This year, the company will also close down its retail Internet services which operates under the brandname NOW. Presently, there are over 40,000 subscribers hooked on to NOW. The 30,000 postpaid users and 10,000 prepaid users of NOW will not get the services from 1 December 2004.
Data Access will now focus on the corporate segment for various Internet services. The company is already selling bandwidth to major ISPs including customers likes BSNL, NIC, STPI, and Sify.
The company has also unveiled major plans to expand its business outside India. It already has three subsidiaries-Pacific Net Invest Netherlands, Data Access America for the US market, Data Access Telecom Limited for the UK market.
It now planning to enter the West Asian markets, as and when they open up. The company is looking to tap potential markets in Kuwait, Yemen, and Saudi Arabia. In the markets space, the company will be looking at voice minute aggregation.
As part of its global expansion strategy, the company has also entered into a strategic alliance with Paging Services Limited to enter the Mauritius market. The company has also planned to tap the three-billion minute voice market in Pakistan and was in talks with World Call, a pay-phone company there. Among its expansion plans in the domestic market, Data Access is closely studying the finer points of the new Unified Access License Regime. And, depending on the terms and conditions in it, Data Access plans to roll out national long distance services here. This will help the currently pure-play ILD service provider to focus on international connectivity services, thereby increasing its revenues in the ILD space.
However, majority of the expansion plans of the company are around voice traffic and voice being a low margin service, Data Access has to look beyond this segment to perk up its bottom line. Though the company has not done well in the data segment, the revenues in the coming days would come from this area. Thus, Data Access has to tap the data market and look for more revenue-generating avenues.