Tikona Digital Networks today said it has raised $45 million to expand broadband network in existing and new cities in India.
IFC, which led the round of funding, invested $25 million and the balance $20 million came from existing investors, funds managed by Goldman Sachs Asset Management, Oak Investment partners, Everstone Capital and L&T Infrastructure Finance.
Tikona small cell infrastructure is already serving over 225,000 homes in the top 25 cities of India and the business model is now ready to scale to more cities.
Tikona also owns 4G spectrum in 2,300 MHz band in 5 telecom circles of Gujarat, UP-East, UP-West, Rajasthan and Himachal Pradesh, covering 28 percent of the population of India, positioning it well for 4G data services in the future. Though Tikona acquired the BWA (broadband wireless license) in 2010, the company could not launch the service in any of the telecom circles. 2015 June will be the deadline for launching 4G on TD-LTE technology.
It competes with Reliance Jio Infocomm, which today said it would hire around 3,000 resources to support its infrastructure execution plans. Reliance Jio is looking at launching its 4G LTE services in early 2015 after grabbing 2,300 MHz spectrum in 2010. Bharti Airtel has also presence in the 4G space with the same spectrum band.
“We are pleased to have IFC as an investor given their understanding of the broadband sector across the globe and long term approach to business investments. Additional capital from our existing investors is also a strong endorsement of their faith in the strength of our business,” said Prakash Bajpai, CEO and managing director of Tikona.
Ruchira Shukla, South Asia Lead for TMT investments at IFC, said: “IFC’s investment in Tikona will facilitate expansion of broadband infrastructure to middle income households and small and medium businesses, particularly in priority states of Madhya Pradesh, Chhattisgarh, Rajasthan and Uttar Pradesh.”