Indian fiber optic maker Sterlite Technologies (STL) is selling its Telecom Products Software business to Skyvera as part of its strategy to refocus on its core optical fiber business.
The Telecom Product Business unit sells network software, data analytics, and OSS/BSS business software and services. US-based Skyvera, an affiliate of TelcoDR, is a global acquirer of telecoms software businesses that operate and transform telco software companies by providing support, product innovation, and a path for leveraging the public cloud.
STL said in a regulatory filing Tuesday that the sale will happen “via business transfer agreement by way of slump sale as a going concern to Skyvera through its Indian subsidiary.”
Software unit accounts for 3% of STL revenues
“The deal is part of the Company’s strategy of calibrated exits from sub-scale businesses and realigning its portfolio to focus on growth opportunities and optimising the capital structure,” STL managing director Ankit Agarwal said in the filing.
“As we set out earlier in this fiscal year, we are intensifying our focus on the most significant growth opportunities in the optical and digital domains. We have our eyes set on becoming one of the top players in optical connectivity.”
STL’s Telecom Product Business currently has long-term relationships with over 60 customers across Europe, India, Africa, and the Middle East. However, in FY2022, the unit reported revenues of Rs 171.4 crores ($21 million), representing around 3% of the company’s revenues (consolidated) and less than 3% of company’s total net worth (consolidated).
STL also plans to exit the wireless products business, which includes macros, radios and Wi-Fi.
Optical fiber is where the money is
Last week, Agarwal told Indian media that the investment commitment of global customers such as telcos and hyperscalers for optical fiber remains strong despite macroeconomic headwinds.
The business opportunity in the optical cable and the optical interconnect space is currently in the range of $18 to $20 billion globally, and has the potential to be $25-$26 billion in the next few years.
STL last week reported a net profit of Rs 50 crore ($6.1 million) for the December 2022 quarter against a loss of Rs 138 crore ($16.83 million) a year ago. Revenue from operations for the just-ended quarter stood at Rs 1,882 crore ($229.51 million), which was about 46% higher than the Q3 FY22 year-on-year.