How this hyper local content delivery network is connecting running trains, aircraft with internet

Internet has become the electricity in present times. With rapid adoption of smartphones and cheap data, India has emerged as one of the biggest users of internet across the world. The Covid pandemic has worked a catalyst to provide further push to this trend. Digital adoption of enterprises is also growing at a rapid pace. Against this backdrop, SugarBox Networks - a hyper-local content delivery network - is witnessing swift demand for its services. Co-founded by Rohit Paranjpe, Devang Goradia and Ripunjay Bararia in 2016, the company is using its patented technology platform to provide seamless internet connectivity in metro, trains, rural areas and others. It has already tied up with Chennai and Hyderabad metro, Central Railways (Suburban Mumbai region) and is now present in more than 500 villages across India. In a conversation with Bizz Buzz, Rohit Paranjpe, Co-founder & CEO of the company, said as a landmark step, it has now tied up with Air Asia to provide services inside the airlines when there is no internet connectivity. He said that the company has seen good growth in 2022 and will double down on its new initiatives next year. He also said that the company will grow its rural consumers by 10 times in 2023 and will explore possibilities of collaboration with more airlines. The Zee-backed company has already achieved operational profits and it will continue to invest in its growth before achieving profitability on entity basis

How do you view the growth of cloud computing industry in recent time? Can you give some distinct features of this growth cycle?

The macro factor of even a small business wanting to hyper-digitalise led the demand for cloud. Industry has always factored that this demand at some point of time will come back to normal conditions. However, what the industry has not factored in that such demand surge would put pressure on ancillary services. For instance, nobody thought that high demand would choke the network. Nobody thought that people from the remote region would log in. Therefore, infrastructure required for this has never accounted for. This led to up offshoot of many ancillary industries, creating employment.

Secondly, demand for cloud is leading to line between several related services getting blurred. That is reason that we are witnessing telecom companies starting their own cloud platforms. We have also seen big technology giants like Google, Meta are trying to enter into connectivity solutions for connecting into the last mile. With rolling out of 5G, captive network is coming in. So, a lot is happening in this industry and what comes under cloud computing has become quite dynamic. With 5G, satellite technology; these lines will even be more blurred in coming years. Cloud computing will be the backbone of any hyper-digitalisation initiatives. That is the reason that opportunity is quite huge. During the Covid pandemic, a lot of things got digitised around us. But, there is a lot more which is yet to be digitised. This industry is growing very fast and that will come not only from current applications, but also from future applications.

How was the demand in 2022 for SugarBox Networks with things getting back to normal? What are your projections for next year?

For us, the demand has skyrocketed. The reason for that is people have come out. We are a unique cloud platform that provides hyper-local platform. For us, after the pandemic, as people come out, the demand for our services has gone up. For instance, within mobility, as people travel in trains, or buses; in hospitality, in retail, we are adding value when they are on the go that when they are at home. So, when people travel in metros, they avail our services. We have tied up with many metros. We have collaborated with multiple divisions of Indian Railways and are expand our footprint there. We have launched our hyper-local content delivery services in aircrafts now. That is a path breaking moment for us. We are seeing a lot of demand for this service not in India but also globally. In that way, 2022 is a landmark year for us with mobility coming back.

As far as 2023 is concerned, we see this momentum picking up further. We have launched our services in alliance with Air Asia. We want to double down on this service and capture 50 per cent the airlines market in the country. In 2022, we have doubled down on the digital India initiative of the government. With 5G coming in, rural India continues to be a big focus area for us. We expect our rural audience by 5-10 times in 2023. On the mobility services, we will focus on providing contextual services to audience. Today, we provide content services through our OTT platform or provide services to shop through our commerce platform. In 2023, we will focus on the what is the most relevant experience that a consumer needs. Satellite technology and 5G will unlock will throw open a lot of opportunities for providing hyper-localised services in the airlines. Without internet connectivity, we have made an OTT application work inside the airlines. That is a landmark step for us.

Can you throw some light on segment-wise revenue contribution for SugarBox Networks?

Currently, our revenue is equally split between metros, aircrafts and rural India. We have a large presence in rural India with close to 500 villages. Category split is more relevant. Within categories, video is our most important segment with close to 35-38 per cent of our revenue coming from videos. This is primarily OTT today but we expect it to expand with more short-format video providers coming in. Second is the commerce which is close to 30 per cent. We have all kinds of brands. In coming months, people taking up last mile mobility solutions will contribute significantly. Finally, edtech has not something been tapped into. With demand for such solutions going up in rural India, we expect it to grow 15-18 per cent of our revenue pie next year. We are in talks with all other startups like fintechs, healthtech and others to see what relevant services we can provide. We are actively exploring that space.

Do you have any exclusive arrangement with any cloud hyperscaler or do you work with all the major players?

We don't have any exclusive arrangement with any player. We work with most major players.

How big is the team now? What are your hiring plans for next year?

We are now 250-strong team. Around 150 people comprise the engineering team now. Next year will be very interesting because that is the period when the real disruptive startups will start growing.

Can you give some view on the profitability front? Are you operationally breakeven now?

We are breakeven at operational profit level. But, we are an infrastructure company and we have to invest in capital expenditure. So, breakeven as a company is a five-year goal for us. It is not a short-term goal for us. As an end goal, we see public listing as one of the possibilities, But we are good five year away from it if that happens.