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Speaking with Inc42 about what worked for Excitel in a market dominated by giants like Airtel, Jio and others, Raina said that the industry practices back then made little sense to him
However, what fuelled his vision was something else. Raina observed that at the time broadband in India was being promoted as a productivity tool — only useful for emails, web browsing, and basic tasks
Excitel has demonstrated consistent revenue growth over the past five financial years, increasing from INR 139.43 Cr in FY20 to INR 486.84 Cr in FY24
If you are the one who used to cough up as much as INR 300 for 1 GB data every month around 2010, you will know how brilliantly the country has forged its way in making the internet affordable and accessible, with some companies even offering 1 GB per day at a much lower price.
No wonder, India has become home to 900 Mn+ internet users. Also, to say the least, it’s difficult to picture a smartphone without a 5G internet pack or an Indian household without a broadband connection.
However, despite the widespread adoption of the internet on mobile phones, they are plagued with issues like network congestion and inconsistent or unstable speeds. In contrast, fixed-line broadband (delivered via optical fiber) offers a significantly stronger and more reliable internet connection. But this discussion of which technology ranks first on the efficiency podium is for another day.
Today, we plan to take you back in time when broadband was marking its explosive entry into Indian households. This was the time when we did not have the option to “Netflix and chill” and many relied on torrents that would seed for days to download a movie.
Compared to today, when the country commands an average internet speed of more than 50 Mbps for fixed broadband, 2010-2015 were the years when most of us would have to make do with top speeds of up to 10 megabytes per second (Mbps) on good days, which kept reducing with usage — a major peeve of those years, if you remember.
That’s exactly what led to the genesis of Excitel
“At the time, average broadband speeds ranged from 5 to 12 Mbps, with many internet providers offering a mere 1 Mbps for INR 700 to INR 800 per month. Additionally, these plans came with a Fair Usage Policy (FUP), meaning speeds would be throttled after exceeding a certain data limit,” said Vivek Raina, the founder of Excitel, the provider of fibre to the home (FTTH) services in India.
This is where Raina thought to shake up the market with his vision — broadband should be truly unlimited, with no speed caps or data limits.
So, how did the company manage to make a mark in the market? More importantly, what inspired Raina’s to give its users truly unlimited access to the internet when others didn’t.
Now, before we dive deeper into answering these questions, let’s steal a glance at the company’s humble beginnings when VC and angel fundings were few and far between in the country.
Excitel’s Match Made In Heaven
After concluding his MBA in 2001, Raina started working with Hathway, a cable and data company, and the first in India to provide the internet using the community antenna television (CATV) network.
Over the years, Raina gained more experience in the wired broadband sector, holding various key positions across different companies and regions. He has worked with Reliance Communications as the regional head of DigiCable and spearheaded multiple roles in the industry before founding Excitel in 2015.
Just two or three years after joining Hathaway in 2001, he realised that there was a need for a company in the market that could address discrepancies otherwise left unattended by the then industry giants. This realisation also served as the fodder for his dream — one that he had seen in his MBA days — of incorporating a venture.
Had he dreamt of becoming an entrepreneur today, it would have been much easier, given the growing influence of VCs, PEs and angel investors in the country. However, back then, finding a VC or a PE investor was a luxury not all had access to. Similarly, angel investors used to work in silos, unlike today when they are more connected.
While this did not stop Raina in his quest to raise funds for his capital-intensive idea, he wasn’t too lucky. During this time, Raina was working at DigiCable.
However, the stars aligned and as fortunes smiled, he met his cofounders, Victor Francess, Nikolai Gorchilov, and Plamen Petkov, who had previously built and sold an ISP business in Bulgaria to Deutsche Telekom and were now scouting for new opportunities worldwide.
They had come to India, and that’s when Raina met them. Everything fit perfectly — Raina’s expertise and understanding of the Indian broadband market and the aspirations of the three cofounders. It was like a match made in heaven.
Soon, all of them found themselves on the drawing board planning their maiden plan of action to disrupt the Indian broadband market. They discussed why broadband penetration in India was so low, analysed the challenges, and identified potential solutions. By 2014, the founders had a clear plan — the idea for Excitel had been born.
Their first investment came from a VC fund based in Bulgaria. In 2015, the fund invested around $1.5 Mn, which served as its seed funding.
“In the first year itself, we expected to reach 30,000 connections, with an internal target of 50,000. But we ended up doing 1 Lakh connections—far exceeding expectations,” Raina said.
Bucking The Trend To Win Hearts
Speaking with Inc42 about what worked for Excitel in a market dominated by giants like Airtel, Jio and others, Raina said that the industry practices back then made little sense to him.
“Unlike mobile broadband, which operates on a spectrum with finite capacity, wired broadband has no such constraints. The idea of imposing speed and data limits was counterintuitive. Just as television providers didn’t restrict viewing hours, broadband providers shouldn’t restrict internet usage. We came with a simple vision — broadband should be truly unlimited, with no speed caps or data limits,” Raina said.
However, what fuelled his vision was something else. Raina observed that at the time broadband in India was being promoted as a productivity tool — only useful for emails, web browsing, and basic tasks.
But, this had to change if the company was looking for the mass adoption of its product. Therefore, Raina thought of making his broadband connection a primary source of entertainment for Indian households.
How? Well, at the time, streaming videos was a challenge due to slow internet speeds, and many relied on downloading movies, which would take 12 hours to as long as 36 hours, only to watch them later.
Excitel wanted to change just that — the sorry state of a patchy internet in India.
Therefore, from the very outset, the company introduced plans with a minimum speed of 20 Mbps — far ahead of the industry standard — at a price point of INR 500 per month.
Tremors were felt across the industry, as Excitel, which, downplaying itself, projected 30K to 40K subscribers in the first year, was soon seen commanding a base of more than 1 Lakh subscribers.
“The demand was clear — consumers wanted high-speed, unlimited broadband, and they were ready to embrace it,” he said.
Following the validation of their thesis, the next big leap was to stay ahead of the changing technologies in the then ever-growing paradigm of broadband.
But, the transition was not as difficult as it would have been for others. This is because the company was already in its onboarding and expansion phase.
“We decided to go 100% on fiber to the home. At the time, most broadband players were using copper to the home and not truly fiber to the home technology. Even ACT, an Indian telecommunications company headquartered in Bengaluru, was not entirely fiber-to-home. They bring fiber to the building and from there onwards they use copper,” Raina said.
By 2017-18, Raina said, the company had fully transitioned to fiber, bringing fiber to every household and providing a very high-quality network and constant high-speed connectivity,” Raina said.
While 2019 was a challenging year for many businesses, it turned out to be a golden period for broadband companies. For Excitel, the biggest turning point came during the Covid-19 pandemic.
Before the pandemic, he said, Excitel had to convince customers why a fixed broadband connection was superior to mobile data. However, during the lockdowns, as people worked, studied, and streamed content from home, they experienced firsthand the limitations of mobile internet.
The shift was immediate, and Excitel’s subscriber base doubled from 3 Lakh to 6 Lakh. “Today, customers understand the difference between wireless and wired broadband, eliminating the need for lengthy explanations,” Raina added.
Excitel’s Costliest Bid
Besides technology and consumer awareness, another major challenge in this line of business was cracking the last mile in the most efficient manner. In this line of work, the last mile refers to the last meters of the cable that go from the nearest distribution point to the customer’s home.
“I think 70% of the capex in this business is in those last metres of the cable. It is also the most difficult part of the process,” Raina noted.
For the core fiber, for example, in Delhi, Excitel has around 6,000 km of core fiber in a self-healing multiprotocol label switching network (MPLS), which connects various distribution points.
A self-healing MPLS network can automatically detect, diagnose, and repair network issues without human intervention. Currently, there are around 800 distribution points in Delhi. Every other city follows a similar structure.
From these distribution points to customers’ homes, Excitel appoints local channel partners, usually cable operators. These operators play a dual role. First, they invest in the last-mile network, but this last mile is deployed strictly according to Excitel’s specifications and design. It must be a fresh network laid as per the company’s requirements.
Once the investment and deployment are completed, Excitel’s team inspects the network to ensure compliance with specifications. Once verified, the network is made ready for service, connected to the backend, and sales and service operations commence in the area.
Whenever a new connection request comes in, a ticket is generated for the last-mile operator, who then pulls the fiber from the nearest distribution point to the customer’s home. Since these operators are local residents of the area, they own and maintain the fiber, having invested in it themselves.
“This proximity allows us to attend to network disruptions within 5-10 minutes, much faster than an employee from a traditional telecom company, who would need to travel from the nearest office to address the issue,” he said.
The founder added that Excitel has a strong service level agreement (SLA) in place for its customers. If there is a network disruption, whether in the last-mile network or elsewhere, and the issue is not resolved within four hours, the customer receives one free day of service for every four-hour delay.
“This cost is deducted from both Excitel’s commission and the commission of the partner,” Raina said.
Excitel’s Leap To Next 2 Mn Users
Excitel operates in a highly competitive broadband market alongside major players like JioFiber, Airtel Xstream, and ACT Fibernet.
When Jio entered the broadband space in 2018, many expected it to be as disruptive as it was in the mobile sector. However, while Jio made strides in the wireline segment, it didn’t shake up the market as expected.
What happened instead was that Airtel became more active because of Jio. It became much more aggressive, especially in Delhi, which was Excitel’s home turf. They also became more aggressive in Hyderabad and Bangalore, taking a larger share of the market.
“However, for us, this didn’t make much of a difference because we have always remained focussed on unstructured urban India,” Raina said, observing that in any Indian city, only about 20-25% of areas are well-planned and in sync with broadband infrastructure. This means planned lanes, back lanes, and utility shafts for easy cable deployment.
Excitel’s unconventional strategy of targeted expansion in underserved urban areas, along with its affordable, unlimited internet playbook, is reflected in its financial performance.
The company harvested INR 486.84 Cr in FY24 revenues while reducing its losses to INR 120 Cr from INR 155.12 Cr in FY23. Raina projects to conclude the ongoing financial year with revenues north of INR 600 Cr. He also anticipates a significant decline in losses.
For the next financial year, Excitel plans to expand into Chennai and Kolkata. However, Raina emphasised that technological advancements will remain the priority before any further geographical expansions.
As of now, Excitel is also focussing on transforming its infrastructure by replacing coaxial cables with fiber and transitioning from traditional digital cable TV boxes to IP-based Android boxes. The company is actively seeking funding and partnerships to support this transformation.
“I believe there is potential to add around 2 Mn users over the next two to three years, on top of the million we already have. So, we hope to reach 3 Mn users within the next two years,” Raina said.
It seldom happens that a new brand emerges and changes all industry dynamics. Excitel’s journey has so far been just about that. It has demonstrated consistent revenue growth over the past five financial years, increasing from INR 139.43 Cr in FY20 to INR 486.84 Cr in FY24, marking a 249% rise. The company’s year-on-year growth has remained strong, with revenue surging 57% in FY21, 35% in FY22, 32% in FY23, and 24% in FY24.
Not just this, Excitel stands out as an affordable broadband provider compared to its rivals, Airtel and Jio. Its plans start at INR 699-899 per quarter and INR 449-699 yearly, offering speeds of 200 Mbps at the lowest tier and 400 Mbps at the highest. In contrast, Airtel charges INR 999 per month for 200 Mbps, while Jio offers 150 Mbps at INR 999.
However, the path forward won’t be without hurdles. As major players like JioFiber and Airtel Xstream aggressively expand, Excitel’s affordability playbook and its focus on serving underserved urban areas will be put to test. Besides, with the broadband landscape evolving and 5G gaining traction, the company must stay ahead of technological shifts while scaling efficiently.
For now, the key question remains — Will Excitel remain a disruptor or will it need to eventually give in to the new market dynamics, operating like the rest?
[Edited By Shishir Parasher]
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