Tulip’s Boston-bred Bedi goes rural, global to sell more

It was a chance meeting with Tulip Telecom Ltd executive director Deepinder Singh Bedi here at the Oberoi Hotel on Friday.

Five minutes into the conversation, Bedi said he was focused on increasing the company’s revenues from the government and international business, each contributing in low single-digit percentage to the company’s topline.

A more elaborate meeting with him was for the asking. Surely, it could be no less productive than one with the company’s chairman, HS Bedi, a retired colonel who founded the company.
And so it was at the company’s office in Okhla, a dusty industrial area in south Delhi, that we were headed to.

The junior Bedi seemed like a man in a hurry. But the sense of purpose was all too visible—signing cheques and directing his staff even while explaining how his company is exploiting the fibre optic it has laid in business districts across the country and how wireless communication network will be expanded in rural areas to tap government business.

Tulip has a vast communication network, comprising fibre optic, data centres, 3,000 towers and specialises in providing communication and data services to large clients, particularly in commercial areas where the need for communication is higher.
We started off from where we had left last week—Bedi’s focus areas of government and international business.

In between, the younger Bedi, 32, an MBA from Boston University, got up from his seat to draw bars, pyramids and pie charts to explain his strategy to us two guests. “In the next 2 years, a large part of our business should come from the government. We are in the process of expanding our network to 1,700 cities from 250 cities.”

Bedi believes government business has more stickiness and hence a share of the massive investments the latter is making on beefing up health, education, power infrastructure in the country, would be a good idea to lend predictability to the company’s revenues.

“We may look at monetisation of cash flows since government contracts are of longer term. We have done monetisation in the past and we may do it again in future,” he said.

Also, bolstered by the international long distance licence the company got last year, the company is targeting clients in the US for their data carriage needs from India.

It has also got a ‘214’ licence from the US telecom regulator that allows the company to re-sell bandwidth in that country. “We may look at similar licences in the UK and Singapore,” he said.

The company recently got an order from Saudi Arabia for managed services and Bedi says its success in there would open doors for growing this business in the coming years in developing countries.

Tulip is setting up six points of presence in New York, London, Los Angeles, Singapore, Mumbai and Chennai as part of its plan to grow its international data carrier business.

“We have 3 data centres, one each in Delhi, Mumbai and Bangalore. We are looking at setting up 2 to 3 more, one each in Bangalore, Kolkata and Hyderabad,” Bedi said. These data centres will help the company expand managed services business.

He also said the network integration business, its bread-and-butter a few years back, is likely to slow down going ahead. “It is a low margin business. It involves supplying PCs, hardware, etc. After we make the investment, payment comes nearly after one-and-a-half-month, which is very late. Network integration business gives less than 10% of business and could go down further,” Bedi said.

The company plans to fuel its expansion plans with capital expenditure of around Rs 500 crore this financial year, and the same in the next, Bedi said.

If needed, Tulip may raise more debt to fund its capital expenditure, he said. Bedi said the company could buy back more foreign currency convertible bonds of the remaining $98 million that mature in 2012. Earlier, the company had bought back FCCBs worth $52 million. “If the opportunity arises, we may buy back more.”

NewsWire18