Demand for optical fibre strong despite macro headwinds: Sterlite Tech

The term hyperscalers refers to large cloud service providers, whose offerings include computing and storage at an enterprise scale

Optical fibre cable
Cloud migration "is here to stay" even if there are some short-term blips in the market
Press Trust of India New Delhi
3 min read Last Updated : Jan 29 2023 | 4:26 PM IST

Digital solutions company Sterlite Technologies has said investment commitment of global customers for optical fibre remains strong despite macroeconomic headwinds and that telcos and hyperscalers will continue to spend to gain a market edge.

According to Sterlite Tech Managing Director Ankit Agarwal, there is no change in the company's production scale-up plans or targets as demand for its product portfolio is robust.

"In our key accounts, most of our customers are public, and their investment plans are well known. We track it and see fairly strong capex investment plans over 2-3 years and for some even up to the next 5 years," Agarwal told PTI.

He said customers, both telecom and hyperscalers, continue to spend with a focus on innovation and technology. That demand is reflected in the company's order book of Rs 12,054 crore.

The term hyperscalers refers to large cloud service providers, whose offerings include computing and storage at an enterprise scale.

STL is also positive on India's market outlook. "Be it 5G and Fibre-to-Home plans, as also Government talking of next phase of Bharat Net project, which will mobilise huge investment into fibre networks, we feel STL is well placed to capture the good position in the market growth," he said.

So far, as its global portfolio is concerned, the company sees clear commitments from telecom operators.

"We see clear commitments with telecom operators. They are of the view that even if there are concerns in the near term, investments in fibre optics will be a key differentiator for them from a long-term perspective. We hear from most customers about very strong focus and prioritisation of fiberisation of networks," Agarwal said.

Cloud migration "is here to stay" even if there are some short-term blips in the market.

"All hyperscalers are actually continuing their commitments towards data centre build-outs, and our role will be to provide some of the optical fibre solutions both to connect data centres and within data centres," Agarwal explained.

Cloud migration will continue. "I don't think it will slow down and for that, you need to have data centres globally and in every location. So that is where we can support them with their data centre requirement...that is also a growth area for STL in 2-3 years," he said.

Accordingly, there will be no cutbacks in the company's plans for expansion, and the scale-up of cable capacity is proceeding as per plans.

"We are expanding cable capacity, as we had announced earlier. We are adding cable capacity from 33 million km to 42 million km...by H1 of FY24. That continues as planned, as we see strong demand for our product portfolio," the top STL official said.

The company on Friday reported a net profit of Rs 50 crore for the December 2022 quarter against a loss of Rs 138 crore a year ago. The loss in Q3 FY22 included a one-time provision. Seen sequentially, the net profit was up 13.6 per cent from Rs 44 crore in the September 2022 quarter.

Revenue from operations for the just-ended quarter stood at Rs 1,882 crore, which on a year-on-year basis was about 46 per cent higher than the Q3 FY22.

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

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Topics :Sterlite TechnologiesOptical Fibre CableCloud migration

First Published: Jan 29 2023 | 4:26 PM IST

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