Southern Online to up bandwidth capacity

Company plans to increase bandwidth capacity to 75 mbps by April 2005

City-based Southern Online Bio Technologies Limited, formerly Southern Online Services Limited, is planning to increase its bandwidth capacity from the existing 44 mega bytes per second (mbps) to 75 mbps by April 2005. The company is the largest B-category internet service provider (ISP) in the country.

Of the 44 mbps capacity, the company sources 2 mbps from Dishnet DSL, 4 mbps from VSNL and 38 mbps from Bharti BT. "The company sees huge untapped potential for selling additional bandwidth in Hyderabad city itself.

At present, negotiations are on with bandwidth providers," N Sathish Kumar, managing director of Southern Online Bio Technologies, told Business Standard.

The company offers dial-up connections, leased lines, wireless hosting and cable services in three cities in the state -- Hyderabad, Karimnagar and Kakinada.

Sathish Kumar said that the significant fall in bandwidth prices from Rs 42 lakh per mbps in 1999 to Rs 12 lakh currently was helping ISPs attract new customers. He said the company was mainly focusing on the corporate segment which comprised 80 per cent of the total customer base.

Southern Online Services Limited recently announced plans to enter the biotechnology segment by acquiring a company Southern Biofe Bio Fuels Private Limited.

It held an extraordinary general meeting of shareholders on March 25 which approved of the change of name from Southern Online Services Limited to Southern Bio Technologies Limited.

The EGM had approved of the proposal to raise authorised capital from Rs 6 crore to Rs 12 crore. The company has sought approval from Sebi for rights issue to allot 62,96,603 equity shares of Rs 10 each in the ratio of 1:1 to the shareholders.

Of these shares, 3,43,097 equity shares will be issued to the shareholders of Southern Biofe Bio Fuels in exchange for purchase of shares of Southern Biofe Bio Fuels.

Southern Bio plans to set up a bio-diesel plant Samsthan Narayanpur in Nalgonda district. The plant will procure oil-bearing seeds such as Pongamia Pinnata, Jatropha Curcas etc by entering into buyback arrangements with farmers and tribals.

The bio-diesel project is estimated to cost Rs 14.84 crore. About Rs 6 crore is being mopped up through internal accruals and the remaining Rs 9 crore is yet to be mobilised either through debt or equity, Sathish Kumar said.

The bio-diesel plant project is being appraised by German Technical Cooperation (GTZ), a financial institution. The technology producing bio-diesel is to be sourced from LURGI of Germany, a leader in biotechnology, Sathish Kumar said.

The company is currently holding talks with International Finance Corporation (IFC) and a few venture capital funds in Germany, he added.