Aksh Optifibre to consider splitting mfg, services ops

MUMBAI (Reuters) - Optic fibre cable maker and broadband services firm Aksh Optifibre Ltd will consider separating its manufacturing and services operations into two entities, its chief financial officer said on Tuesday.

"This is still in the nascent stages. The company is discussing about hiving off manufacturing and services into two separate companies," Satyendra Gupta told Reuters.

The plan was still at a preliminary stage and was yet to be discussed at the board level, he added. The board is expected to take a decision within a month.

The idea behind the proposed split was to have two independently focussed companies and to unlock value for shareholders and allow investors to make a choice between manufacturing and services.

The company's growth had led to two businesses which were diverse in nature, Gupta said.

Aksh manufactures a wide range of optic fibres, optical fibre cables and fibre reinforced plastic rods which are used in the telecommunications sector. It derives the bulk of its revenues from the manufacturing segment.

Under services, which contributes about 3-4 percent to revenues, it has started offering broadband services such as television and video-on-demand and, more recently, telephony services.

Services, which is a high-margin segment, is seen growing faster, he said.

The potential for growth in broadband in India and the initiatives taken by telecoms players in offering various content and services over broadband networks, offers huge opportunities for vendors such as Aksh Optifibre in providing these services.