Atul Punj Gets Wired
If Atul Punj's plans work, Delhi-ites could be in for a new treat next week: the way they watch television is going to change beyond belief. Instead of getting a clear signal for just a handful of channels provided by the cable operator, they could get consistent clarity for all the channels.
By the first week of June, their cable operator could throw another proposition at them: they can access the Internet all 24 hours on their television. With a wireless keyboard, they can surf the Net for as long as they like without engaging the telephone. A few weeks later, the cable operator could call on them one more time: this time he will offer them the freedom to watch their favorite Hollywood or Bollywood film whenever they like. And the best part is yet to come: for all this, subscribers won't have to pay an extra penny to the cable operator.
It's the convergence nirvana and it's being offered courtesy a 300 km fibre optical network that the short and stocky Punj has laid down in capital. The 42-year-old Punj, whose ancestors came from a village close to Rawalpindi in Pakistan, can barely conceal his excitement: "Forget Bangalore, forget Hyderabad; I have wired up Delhi and created India's first cyber-city."
Punj didn't cut his teeth in the Silicon Valley. "I am not a techie," he confesses. He is a member of the low-profile Punj family which deals in airconditioners and insulators. In fact, till an year ago, his only claim to fame was being the chairman of Punj Lloyd, a closely-held company with interests in the construction business - laying pipelines, building oil storage tanks and building roads.
Some two years ago, Punj had been contracted by the Bharti group to lay down the fibre optic backbone for its basic telephony services in Madhya Pradesh. It was then that the thought occurred to Punj that he also had the wherewithal to get into the infotech business. What also must have played on Punj's mind is that worldwide companies like Enron are using their network of pipelines to lay a broadband network. Even railways minister Mamata Banerji has unveiled plans to set up a broadband backbone using the railways network.
Thus was born Spectranet, a 70 per cent Punj Lloyd subsidiary, the remaining 30 per cent being held by the Punj family and a clutch of financial investors. And when the licences for Internet services providers came up for grabs in July 1999, Spectranet promptly took one. Two months later, in September, Punj started laying the optical fibre network in the capital.
An optical fibre cable carries more bandwidth than other cables. This results in more signal being carried with superior clarity. But Punj's rivals are quick to point out that while he has a network in place, it will be difficult for him to get access to cable operators as most of them are hooked on to either Subhash Chandra's Siti Cable or the IN Network of the Hindujas. "These people have their own plans for a broadband network and the cable operators have been with them for so long. Punj will find it difficult to wean them away," says a Mumbai-based observer.
To get over this problem, Punj is working hard to strike deals with cable operators. As an additional sop, he is bundling the Internet into his services. The possibilities of the Net on broadband are enormous. For instance, with the help of a video camera, a patient can have a live session with his doctor. Or, chats across the Net can become live, again with the help of a video camera. Punj has also set up a website called WahIndia which is the country's first broadband website.
Punj's detractors are still unimpressed. They argue that the price of the equipment to access the Internet will deter most consumers. Punj admits that the equipment will cost around Rs 12,000. But, he is quick to add, that there are other economies as it offers 24-hour access to the Net without the telephone bills getting inflated.
There are some who agree with Punj's gameplan and see a bright future for Spectranet. "There are going to be 70 million cable households in the coming years; even if 10 per cent of them opt for broadband, Spectranet's future is made," says Gaurav Dalmia, a director with the investment banking firm First Capital.
Punj also as an eye on the corporate sector for business. To lure them, he has set up a data centre at Okhla in Delhi at a cost of Rs 35 crore which will offer them a range of services from hosting websites to creating a virtual private network and mirroring of data so that operations aren't stuck in case of a disaster. "It's the real jewel in the crown," says Punj.
In the optical fibre backbone, the data centre and the website, Punj has plans to invest Rs 300 crore. While some Rs 85 crore has already been spent, to bankroll the rest of the project, Punj is going for a second round of funding in Spectranet. Investment bank Jardine Fleming has been engagd to find a strategic buyer for 10 per cent of Spectranet shares. The deal is likely to be concluded soon.
Punj expects Spectranet to break even by 2003. But the projections could go haywire if larger players get into the act. The biggest threat comes from the state-owned Mahanagar Telephone Nigam which can put a broadband network on its existing network at a low cost. Till then, Punj can afford to ride the gravy train - or rather cable!