On the back of India’s booming digital economy, CloudExtel, a digital infrastructure provider, is targeting approximately 50% growth as it plans to invest heavily in boosting its fiber and small cells network.
CloudExtel offers various digital infrastructure services, including small cell hosting, FTTH, intra-city fiber, and virtualized networks to Communications Service Providers (CSPs), Internet Service Providers (ISPs), data centers, and enterprises.
The company recently secured INR 2000 million ($23.96 million) in debt funding from Macquarie Capital and Advancap. Last year, Macquarie Capital acquired a controlling stake in CloudExtel for around $100 million.
CloudExtel plans to use these funds to expand its small cells and fiber network across the country. “The roadmap going forward is to continue to accelerate capital deployment. It’s going to be equally divided between site build-out in the small cell space and fiber deployment,” said Kunal Bajaj, CEO and Co-Founder of CloudExtel. With Indians consuming an average of 24GB of data per month in 2023, and 5G data traffic continuing to rise, the need for robust digital infrastructure is growing.
Several government initiatives, such as Digital India, along with economical 4G tariffs, have fostered a flourishing digital economy. The popularity of e-commerce and digital public infrastructure initiatives like Aadhaar and the unified payment interface (UPI) have also contributed to this growth. Service providers are aggressively expanding their digital infrastructure to keep pace, and companies like CloudExtel are looking to capitalize on this opportunity.
Based on capital infusion and an aggressive deployment plan, CloudExtel is targeting at least 50% revenue growth this year. “Over the last five years, we have been recording a growth of 55% to 60% CAGR in revenues year-on-year. This year is going to be no different,” Bajaj said.
Boosting Small Cells and Fiber Infrastructure
Currently, CloudExtel operates in 6,000 locations with around 15,000 to 16,000 small cells. “We believe the market will require over 250,000 small cells for each of the three telcos [Reliance Jio, Bharti Airtel, and Vodafone Idea]. Considering that we were the first to provide small cells in the country, we will continue to invest heavily in building out. We see ourselves as a major player as continuous growth happens,” Bajaj told Fierce Network.
A key reason for this anticipated growth in small cells in India is the increasing 5G traffic. “The densification of capacity has been in the 4G space so far. It is only now that we are starting to see that 5G macro sites are also starting to hit capacity limits,” he added.
India’s top two telcos, Reliance Jio and Bharti Airtel, have launched 5G services but are offering 5G at 4G tariffs, leading to muted monetization. Together, the two telcos have around 172 million 5G subscribers.
On the fiber front, CloudExtel has deployed around 7,000 km of fiber and plans further investments to boost its network in the country. The company claims to pioneer the deployment of India’s first neutral shared radio access network (RAN) infrastructure, recently deploying shared RAN at nine railway stations in Mumbai.
CloudExtel’s Role in 5G Private Networks
CloudExtel also envisions a role in the 5G private network market. “One of the main advantages that we bring is our ability to partner and work closely with systems integrators who are building applications for enterprises that require an underlying 5G layer. We intend to be part of the private network space, working with both telcos and SIs [System Integrators] to deliver end-to-end solutions,” Bajaj said.
The company, launched about 10 years ago as a unit of Bombay Gas Company, initially used existing gas pipes to lay a fiber network in Mumbai, India’s financial capital, before expanding into other active and passive infrastructure.
CloudExtel is also exploring opportunities for inorganic growth. “We are definitely looking at the right opportunities where there are partners who want to develop and scale. We have had several informal conversations with people in the ecosystem, but nothing firm right now,” Bajaj said.
