The internet has become electricity these days. With the rapid adoption of smartphones and cheap data, India has become one of the largest internet users in the world. The Covid pandemic has acted as a catalyst to further drive this trend. The digital implementation of companies is also growing rapidly. Against this backdrop, SugarBox Networks — a hyperlocal content delivery network — is witnessing a boom in demand for its services. Co-founded in 2016 by Rohit Paranjpe, Devang Goradia and Ripunjay Bararia, the company uses its proprietary technology platform to provide seamless internet connectivity in metros, trains, rural areas and more. It is already connected to Chennai and Hyderabad Metro, Central Railway (Mumbai suburban region) and is now available in more than 500 villages across India. In conversation with Bizz Buzz Rohit Paranjpe, the company’s co-founder and CEO said it is a significant step that it has now partnered with Air Asia to provide in-flight services when there is no internet connection. He said the company has seen good growth in 2022 and will double its new initiatives next year. He also said that the company will increase the number of rural consumers by 10 times in 2023 and explore cooperation opportunities with several airlines. The Zee-backed company has already turned operating profit and will continue to invest in its growth before achieving profitability on an enterprise basis
How do you rate the recent growth of the cloud computing industry? Can you point out some distinguishing features of this growth cycle?
The macro factor, even for a small company that wants to hyper-digitalize, has driven the demand for the cloud. The industry has always counted on the fact that this demand will return to normal conditions at some point. However, the industry has not taken into account that such an increase in demand would put pressure on ancillary services. For example, no one thought that high demand would choke the network. No one thought that people from a remote region would apply. Consequently, the infrastructure required for this has never been considered. This led to the branching off of many ancillary industries, creating jobs.
Second, demand for the cloud has become diffused among multiple related services. For this reason, we are witnessing telcos creating their own cloud platforms. We have also seen big tech giants like Google, Meta trying to get into connectivity solutions for last mile connectivity. With the spread of 5G comes the limited network. So there’s a lot going on in the industry and what’s available in cloud computing has become quite dynamic. With 5G, satellite technology; these lines will become even more blurred in the coming years. Cloud computing will be the foundation of any hyper-digitalization initiative. This is the reason why this opportunity is quite high. During the Covid pandemic, many things around us were digitized. But there is much more that has yet to be digitized. This industry is developing very rapidly and will be supported not only by current applications but also by future applications.
What was the demand for SugarBox Networks in 2022 when things returned to normal? What are your predictions for the coming year?
For us, demand has skyrocketed. The reason for this is people coming out. We are a unique cloud platform that provides a hyperlocal platform. We have seen an increase in demand for our services after the pandemic as people come out. For example, as part of mobility, when people travel on trains or buses; in hospitality, in retail, we add value when they’re on the go, not when they’re at home. So when people travel by metro, they use our services. We are connected to many metros. We have partnered with several divisions of Indian Railways and are expanding our footprint there. We have launched our in-flight hyperlocal content delivery service. This is a breakthrough moment for us. We are seeing a lot of demand for this service not only in India but also globally. In this way, 2022 is an important year for us when mobility returns.
As for 2023, we see this momentum continuing to grow. We have launched our services in alliance with Air Asia. We want to double this service and capture 50 percent of the airline market in the country. In 2022, we have doubled the government’s Digital India initiative. With the advent of 5G, rural India remains our focus. In 2023, we expect our rural audience 5-10 times. In the field of mobility services, we will focus on providing contextual services to the audience. Today, we provide content services through our OTT platform or provide shopping services through our commerce platform. In 2023, we will focus on what is the most relevant experience the consumer needs. Satellite technology and the unlocking of 5G will open many opportunities for providing hyper-localized services in airlines. We have made OTT application work in airlines without internet connection. This is an important step for us.
Can you explain SugarBox Networks revenue contribution segment?
Currently, our revenue is equally split between metros, aeroplanes, and rural India. We have a large presence in rural India with nearly 500 villages. The division of categories is more appropriate. Across categories, video is our most important segment, with videos accounting for nearly 35-38 percent of our revenue. It’s mostly OTT today, but we expect it to expand as more short-form video providers enter. Second, trade is almost 30 percent. We have all kinds of brands. In the coming months, people using last-mile mobility solutions will make a significant contribution. Finally, edtech is not something used. As the demand for such solutions increases in rural India, we expect this to grow by 15-18 percent of our revenue next year. We discuss all other startups like fintechs, healthtech and others to see what relevant services we can provide. We are actively exploring this space.
Do you have an exclusive contract with any cloud hyperscaler or do you work with all the major players?
We do not have any exclusive agreements with any player. We work with most of the major players.
How big is the team now? What are your hiring plans for the coming year?
We are now a team of 250 people. Currently, the engineering team consists of approximately 150 people. The next year will be very interesting because it is the period when the real disruptive startups will start to grow.
Can you provide an insight on the profitability front? Do you have balance right now?
We are balanced in terms of operating profit. But we are an infrastructure company and we have to invest in capital investment. So profitability as a company is a five-year goal for us. This is not a short-term goal for us. As a destination, we believe one of the options is on the public list, but if that happens, we’re a good five years away.