Why call drops are music to iBus' ears

Call drops and poor or intermittent internet connectivity on smartphones have become so much of a bane today that the Telecom Regulatory Authority of India (Trai) has ordered telecom companies to pay customers Re 1 for each call that gets dropped.

Bangalore-based iBus Networks & Infrastructure Pvt Ltd, which provides in-building network connectivity solutions, spies a big opportunity here. The startup, which collaborates with telecom operators and builders to provide its services, aims to expand its service coverage to 70 million square feet of real estate within the next six quarters.

Ram Sellaratnam, co-founder, managing director and CEO of iBus, said the firm was looking at a 2,000 million square feet business opportunity within the next three to four years. The firm is also is looking to tie up with real estate management firm Jones Lang LaSalle, he said.

"As per information available with JLL, 2000 million square feet of committed and invested real estate will spring up at urban centres in the next three to four years," Sellaratnam told Techcircle.in.

iBus has six million square feet under its service coverage area and is likely to add another 10 million square feet very soon.

The solutions involve placing antennas, base stations, using Wi-Fi and ultrasonic signal emitters among other hardware components to solve problems of connectivity inside large buildings.

Services offered

iBus offers four types of in-building connectivity solutions, namely voice, data, BMS-IoT automation (building management systems based internet of things) and in-building navigation solutions.

The voice and data connectivity problems are addressed through injecting IP (internet protocol) packets into the environment using Wi-Fi on its grid, offloading the data onto its platform and increasing the range of the spectrum available.

Likewise, as large commercial buildings increasingly turn to automation to manage BMS (building management systems), connecting devices becomes imperative. iBus offers an IoT solution through its grid taking advantage of the already existing input/output points.

"We can eliminate up to 1-2 kms of wired connectivity, which can translate into considerable savings on capex (capital expenditure) and maintenance costs," said Sellaratnam.

Lastly, the in-building navigation solutions are offered through pseudo satellite – an ultrasonic emitter -- that sends pulses similar to GPS spectrum and helps in location and navigation up to a centimetre-level of accuracy.

Sellaratnam gives last year's Chennai deluge as an instance where iBus solutions could have been of help in providing network connectivity.

"Our iBus smart grid would have helped locate individuals despite the failure of mobile networks to provide connectivity," said Sellaratnam.

Potential market

"The mobile spectrum is very data intensive. As both voice and data come through the same spectrum, the data congestion causes network drops and connectivity issues," said Sellaratnam.

According to him, rapid urbanisation without taking into account radio frequency while constructing buildings, is one of the main reasons behind poor connectivity. Moreover, RF spectrum management in its current state, would require huge capital expenditure from the telecom operators.

"Connectivity is a sticky issue. Wherever there is problem of congestion we have a potential business. It's not unique only to India but even in advanced economies like the UK. Our solution is a cost effective alternative to address this huge pain point," said Sellaratnam.

Customers, revenue model

iBus clients currently include 24 premium residential builders along with telecom operators. Builders, at the project conceptualisation stage itself, can enter into agreements with iBus and integrate their smart grids during the construction stage.

However, completed residential projects also can have it installed on-demand.

Likewise, for telecom operators, iBus reduces call and data congestion through its platform. The company counts major telecom service providers including Airtel, Vodafone, Idea, Tata Docomo and Reliance Communications as its customers and is in an advanced stage of talks with Reliance Jio.

However, iBus is eyeing the bigger commercial and hospitality establishments for its expansion plans.

"Shopping malls, tech parks, premium hotels and residential properties is the pecking order of preference when it comes to our clientele," said Sellaratnam, adding that a pilot project is under way in one of the prominent malls in Bangalore.

iBus enters into multi-year contracts with its clients and earns its revenues on a subscription- cum-service based model from both. iBus charges on a per square foot basis.

Proximity user engagement is another revenue model which the company is keenly looking at. Proximity user engagement involves targeting customers with promotional and ad campaigns based on the consumer's proximity to brand outlets. "For instance, if you are walking past a Nike outlet in a shopping mall and you are a member of their loyalty programme, promotional and discounted campaigns associated with the brand starts flashing on your screen," said Sellaratnam. iBus may also foray into data analytics at a later stage, he said.

Currently, iBus's connectivity solutions are offered in Chennai, Hyderabad and Bangalore. It counts seven malls among its customers, including 1, MG Road and Mantri Square mall in Bangalore besides Brigade properties in Kerala. Among the hotels which use the services of iBus are JW Marriott, Courtyard Marriott and Crowne Plaza in Bangalore.

The firm claims it has already captured 50 per cent of the potential market opportunity in Kerala. Mumbai, Pune, Kolkata and Delhi NCR are the next port of calls for iBus.

While voice and data solutions are already available, the BMS-IoT and in-building navigation solutions will be rolled out by the middle of 2016.

Financials, funding

Launched in late 2012, iBus has been profitable since the start, claimed Sellaratnam. It expects to close 2015-16 with revenue of $293,000 (about Rs 2 crore). It aims to achieve revenue of $517,000 (Rs 3.5 crore) in 2016-17, and for 2017-18, it has set itself an ambitious target of $2 million.

Last month, iBus raised $2.2 million in Series A funding from Vallabh Bhansali, co-founder of Enam Securities; N Squared Management LLC and other investors.

Founders

iBus was founded by Ram Sellaratnam, Subash Vasudevan (chief financial officer) and Sunil Menon (chief technology officer).

While Sellaratnam was earlier Infosys' head of cloud offerings for Europe, Vasudevan was a principal technology architect at Infosys before launching iBus. On the other hand, Menon has worked with Skycell Telecom, TVS Interconnect Systems and Essar Telecom Retail.

iBus has appointed former Micromax chairman Sanjay Kapoor as non-executive chairman while former Infosys director TV Mohandas Pai has been roped in as an advisory board member. Both Kapoor and Pai are early investors in iBus.

Competition

While there are other players such as TE connectivity, Alcatel Lucent and Arqiva, Sellaratnam said most of them offer voice, data, BMS-IoT automation and in-building navigation solutions as standalone services, compared to iBus which offers all the four on a single platform.