Tikona Digital Networks has reportedly raised Rs 1,150 crore from Overseas Private Investment Corporation, a US government development finance agency to revive its ailing operations in the country. The Mumbai-based internet service provider, owned by a clutch of investors including Goldman Sachs, Oak Investment, IFC and Everstone Capital, currently offers wireless broadband services to home and enterprise customers through its all India Class-A Internet Service Provider licence. It competes with the likes of state-run BSNL, Tata Teleservices, and other local broadband operators such as Hathway.
The funding, which is a commercial loan, puts to rest talks of acquisition of the company and provides it the liquidity necessary for revival, ET reported quoting Prakash Bajpai, founder of Tikona.
The company had last year kicked off a commercial pilot of 4G-based high-speed broadband services in Varanasi. Following the infusion of investment, it now plans to offer blanket coverage in the areas in 60 cities within the next 18 months.
Bajpai told the publication that Tikona can now produce 1GB of data for a mere Rs 5, following the latest technology investments. Bajpai said the company has been able to garner around half the market in Varanasi.
“It isn’t offering low-end solutions, and instead wants to corner the multi-device, heavy users who consume tens of GB data,” Bajpai said, adding the move has resulted in a seven-month break even for Varanasi.
Founded in mid-2008, Tikona won 20 MHz of 4G spectrum in five key circles including Gujarat, Himachal Pradesh, Rajasthan, Uttar Pradesh (East) and Uttar Pradesh (West) for over Rs 1,058 crore in the 2010 auctions.
The company has been exploring merger opportunities in the country. It was in talks with Norway’s Telenor and leading telco Bharti Airtel for a merger. The talks failed subsequently over valuation issues.