Once ailing state-owned unit got revived after divestment

December 24, 2015

In 2001, the central government had divested majority stake in HTL, earlier named Hindustan Teleprinters, after the company accumulated sizable losses. Since then, cashing on the huge demand demand in fibre optic cables due to the telecom broadband revolution, and introduction of fourth generation (4G) technology, the company has turned the corner.

Mahendra Nahata, chairman, Himachal Futuristic Communications (HFCL), which acquired 74 per cent stake from the central government in HTL in 2001 (the other 26 per cent remains with the Centre), said demand for fibre optics was expected to increase to almost a million cable km every year from the current 600,000 km. The market size is estimated at Rs 3,000 crore and to be Rs 7,000-8,000 crore in four to five years.

The government’s Digital India and NOFN (national optic fibre network, laying 40,000 km of fibre optic backbone) is driving demand, from the defence sector, the railways (for communication of trains and signalling) and states, all of which are creating their own broadband networks. Also, the mobile telephone battle is shifting to data and all telecom companies need a fibre optic backbone, with 4G are creating a new market, he said.

To tap this, HTL plans to set up a new optical fibre cable unit in this city, for Rs 56.7 crore. Investment will be funded by promoter contribution and through loan. The Chennai facility will have a capacity to produce cables up to 70,000 km every year and HTL will be in a position to achieve annual turnover of Rs 300-350 crore, said Nahata. Once the Chennai unit goes on stream, he said, HFCL and HTCL together would be number two in this segment.