Sterlite Technologies Limited (532374) Earnings Call Transcript & Summary

Hello, everyone, and a very warm welcome to STLescope 2021. I hope you and your loved ones are well and safe. Last year was a year like no other. The pandemic actually challenged us in all kind of different possible ways. We saw continued lockdowns. We saw different strains of the virus and so much more. But we actually saw the best of humanity come together during this year. And if there was just one common denominator in all the events of the past year, it was digital network and the power of technology. That is what kept us running in this year. Digital networks will also shape our collective future. So through this STLescope, let's have a look at the very exciting future of digital networks and that of STL. But before we start, I would like to add that some elements of today's presentation may be forward-looking in nature and must be viewed in relation to the risks pertaining to the business. The safe harbor clause indicated in the presentation also applies to this webcast. So let's move forward, but let's look back a little also with this very short video on the year gone by. [Presentation]

Indeed, it was a very remarkable year, which we will never forget. In this year, we actually faced challenges, came together as a company and made a lot of progress. Today, we have a forum of our global leadership from different parts of the world across our Board members, business leaders, some very cool technologists and our very savvy customer specialists. Who to better -- who better to take us forward than our very own Dr. Anand. Many of you might have met him. For those of you who haven't, he is the man behind STL's transition from an optical manufacturer to this end-to-end solution company. While the world was just beginning to decode the future of connectivity, he had this vision clear in his mind, and he has been steering the industry towards that. Anand, over to you.

Thank you, Khushboo. Good day, everyone, and I'm extremely glad that all of you could join us for this second edition of our Investor Day called STLescope 2021. I hope all of you are healthy, and you and your loved ones are keeping safe. So today, we'll take you through the journey that we've had over the last year. And more importantly, what -- how our strategy is shaping up as we look forward. We'll start off with where we left off last year and the subsequent investor interactions that we've been having, and we'll take you forward to showcase what we have delivered and where we are going as we connected to you over the last several quarters. So if we move forward, we had talked about how STL has evolved over the last -- over 25 years into different formats. We had started off as a company, which was focused on optical fiber and technology, largely present in India and having [ cables ] as our customers. Over the last 5 years, we evolved into a company which was more focused in creating end-to-end network integration with telcos, and we started becoming more and more regional. And now the journey has started. The 3.0 version is about creating that converged access between wired and wireless, creating an end-to-end system integration and all network creators, whether it is telcos, whether it is private equity holders, whether it is the new networks created by them, and are becoming the network creators. And we are truly, truly becoming a global technology company. So this is a journey that will take you forward through this entire presentation of STL 3.0 and how we are evolving forward. So if we -- we had talked about -- sorry, if you go to the previous one, we had talked about how STL has created this end-to-end solutions technology capability between optical, wireless and system integration. We had talked about how our 4 customer segments of telcos, cloud companies, citizen networks as well as large enterprises have been our focus areas and the fact that we are extremely globally present. We're truly evolving into a global technology leader, which integrates digital networks. I'm staying true to our purpose of enabling billions of people to -- in terms of transforming their lives. Now as we said earlier, the last year it was unlike any other in all our history of all that we have seen, we had the entire ecosystem impacted from societies to loved ones to our businesses. And we, as STL, did our part in terms of playing an important role with our ecosystem, whether it was our employees, the larger ecosystem of our customers, our partners, our local communities in which we operate. And we provided medical support. We provided financial support. We provided logistical support, whatever we could do. And we really truly hope that we are now coming out of it and looking forward to a more different, a more normal sort of an environment. Looking forward, clearly, the last year, as all of us know, digital is the technology which provided us the means to continue being connected to each other, whether it was the education, whether it was video conferencing, like what we are doing right now, continued to have a great degree of focus. And we found that our customers, the network providers played their part extremely, extremely strongly and extremely well. They continued to provide the connectivity during the pandemic. They continued to provide a much higher level of bandwidth that all of us acquired. And bridging the digital divide clearly, clearly became a priority for everyone. And this led to the fact that digital connectivity, the adoption of digital connectivity increased like -- unlike any other time in the history of when connectivity started. We saw that over the last 18 months, more than 2 million people started getting online or connected to the internet every single day. This is compared to about 700,000 people who were getting connected to internet every day before that. So as a result of the fact that we have more and more people getting added to the internet, we have more and more devices getting added to the internet, and we have each of us consuming more data. The data consumption pattern has been growing extremely, extremely significantly. And not only the data consumption pattern, we have clearly seen that the overall much, much more capital is now available in creating this digital infrastructure. And this capital is not only coming from the traditional sources, which used to be telecom providers, now we are seeing an almost equal, if not more, capital coming in from alternate sources as well. So while telcos have been extremely strong and continuing to spend, and the spend base has clearly increased, we find the alternate network infrastructure providers, whether it is the cloud companies, increasing -- significantly increasing their overall network infrastructure spend. We have also seen that private equity players like what we saw in India and elsewhere in Europe as well as in U.S. becoming a significant network provider in terms of investing in existing networks, in terms of creating new greenfield network, private equity became a significant area. We also saw that governments around the world continued to invest into the network. We saw yesterday the cabinet passing the addition of almost INR 20,000 crores to BharatNet. We are seeing the fact that U.K. Fiber Fast is increasing. We are seeing President Biden unveiling a $100 billion infrastructure fund for creating new infrastructure. And the last very, very important segment, which is also evolving is the enterprise segment, where enterprises are putting in their own capital and creating private networks of their own. And that's one very significant use case for 5G, which is emerging. So we are clearly seeing the capital abundantly available for digital infrastructure. And we are seeing the creation of almost a decade-long investment cycle, which we had spoken to you about last year. It's not only the capital, it's also new technologies are getting deployed. There is -- 5G is now clearly, clearly center stage with over 400 million subscribers now taking 5G. And it has been the fastest technology like any other ones to reach the 400 million users. There are multiple carriers around the world who are deploying it. Not only 5G, fiber to the X, where the X includes fiber to the home, fiber to the enterprise, fiber to the tower as well as fiber to the data centers are connecting many, many endpoints. And this 5G is getting deployed with this open RAN ecosystem, where open RAN clearly has become mainstream in terms of a nonproprietary ecosystem becoming more and more and open -- towards an open ecosystem. And we're seeing across the world industry experts now recognizing this shift, and this is where the bulk of the capital is going through. And what this has led to, these build cycle, the 5G build cycle, the fiber to the X build cycle, the rural connectivity has now fairly increased the overall fiber demand. If we see this year, we are supposed to have a fiber demand, which is significantly higher than what it was last year. And CRU, who tracks the industry, is predicting almost another 100 million kilometers of fiber demand getting added over the next 4 years. So clearly, this network creation cycle has just begun, and it is going to go on for at least another 8 to 10 years. And this network creation cycle that we had spoken about is happening with some technology confluences. This is a different cycle than what we have seen in the past. This network is getting created much, much closer to the end user. This network is not only, as opposed to the past, where the network used to be either a wireless network or a fiber network, this is a converged network, where every 5G network is actually extremely, extremely relevant fiber network also. And every fiber network has a wireless network as its endpoint. The other difference for this network is the fact that this network is not only a connectivity network, it is as significantly a compute network where there are data centers at the edge of the network, which provide equally compute as well as storage. And the third part, which is essentially about this new network, which is getting created, is that it is disaggregated. There is hardware, which is there on the ground, but the network is provisioned, controlled, managed through software in the cloud. And these are the convergences that we are seeing in the network where the layers between the traditional telecom layers and the IT layers are disappearing, and it is all becoming an end-to-end network, which is getting created. And we are seeing the fact that more and more people are now looking at this overall ecosystem and moving forward towards what we showcased last year. In this ecosystem, what we have spoken about the fact, we have created these capabilities over the last several years. If you see on the bottom-left part is our optical capability. The optical capability, which we have over the last 25 years created, we started off as a fiber and cable company, we added capabilities on the interconnect side, and then we added capabilities also on the software end, which is the disaggregation of hardware and software at the end edges, the endpoints of the network. And we have an extremely strong end-to-end play now on the -- which contains both hardware and software on the optical side. We are building a similar place on the wireless side. And this is all focused towards this open RAN movement. This is all focused towards both 5G as well as WiFi 6. Now with both capabilities that we have in optical and wireless, we are crowning that with our capability in terms of designing, planning, deploying, managing and operating network through our system integration business, which we have been doing over the last 10 years. And this convergence, the fact that we have optical capability, wireless capabilities, and we can design and deploy networks is creating large dividends for us with our customer base. Over the last year, we have clearly moved forward in our strategic direction, whether it is with adding marquee customers, whether it is British Telecom, Openreach with multiyear engagements, whether it is Airtel, we have moved forward in the direction of technology as well where we have introduced the industry-leading patented optical fiber called Stellar. We have a new, very, very high fiber count, almost 7,000 fibers in a cable called Celesta. And we have come up with this first indoor small cell based on open RAN called Garuda. And all these are new products that got introduced during the last year and taking our overall patent count to over 559. And clearly, clearly, the global reach, the global focus continues with now increasing the investments that we had been doing in North America in terms of understanding the market, establishing a presence is now starting to reap dividends. And we'll talk about all of this during the presentation. Our total addressable market, which is the focus that we had been speaking about has significantly expanded. So while 5 years ago, we were essentially as a fiber and cable company having access to about $7 billion global market, now with the addition of optical interconnect, system integration where we have taken the addressable market currently only for India as well as cloud data center in Europe, then the virtualized access and network software together gives us access to almost a fivefold increase in addressable market to about $40 billion. And this is something that we consciously built the portfolio over the last 5 years in having this addressable market. And our focus as we move forward is getting market share, increasing our market share in this total [ tab ]. So as a clear, clear summary, we are clearly now entered a decade-long network creation cycle where there is a great demand, where there is great capital in the segment. We have created our capabilities on the optical and wireless and system integration and to be an end-to-end digital network integrator. We now access globally almost a $40 billion total addressable market. And we have clear, clear focused efforts that my colleagues will talk about in terms of how we will increase this -- our market share in this total addressable market. So I would -- now the presentation during we will talk about what are the focused levers which we will use towards increasing this, our addressable market. We will talk about the foundational capabilities, which we give an update on in every meet that we have with you. And we'll talk about the financials, how it has been over the years and directionally how it is aligned with our strategy. I'll now hand over to my colleague, Ankit. Ankit has worked hand-in-hand with all of us for more than 10 years now. He's a great, great believer in innovation. He's been extremely, extremely close to all the customers and created great customer relationships globally. Ankit leads the Connectivity Solutions business. And I'm glad to hand over to Ankit to tell us about the 3 levers for growth.

Thank you. Thank you, Anand, and thank you, everyone, for joining us today. I look forward to running you through our growth levers, as Anand talked about. So the 3 focused growth levers that we have. Clearly, on the optical side, we've been very, very well present in this for over 25 years, and we have established a global brand and recognition for sure. We clearly want to grow this multifold from here, and I'll touch upon that. The second part is in terms of our wireless globalization, in terms of taking our system integration business global, and then you see a beautiful car -- delivery car of ours in the U.K. as we're looking to grow out there and other markets. And then the third lever is clearly in terms of building a strong access solutions business. And I think this is something that Anand also talked about in terms of our 5G and our WiFi 6 and the whole portfolio. This is something that we're extremely excited about. And we really believe that going forward, we'll build a great business on this. Coming to the first part of the optical business. The 3 most important elements are. Firstly, we're clearly looking to continue to grow our scale globally. We're already very actively present in India, in Europe, but we clearly see many more areas of growth, and we'll touch upon that. The second part is we are also looking to enhance our portfolio and move towards a system solution and providing an end-to-end solution to our customers. And this is something that is extremely relevant more than ever today, and we are seeing a strong interest from customers towards our Opticonn offering. In terms of scaling globally, the most important element is to operate close to the customers. The solution center has to be close to the customers, and this is extremely important, and we've already demonstrated this through our investment in Italy where we acquired Optotec. It was extremely powerful and useful for us to be present. It enabled us to get strong presence, not only in Italy with some of these customers, but also across Europe. And I'm very proud to share that looking at this demand and also a strong customer interest that we've already established, we are now looking at the U.S. and also the U.K. We're establishing a new U.S. facility, which gives us a capability to access this $2 billion to maybe $2.5 billion market and take a strong position in this market. We're also looking at building our presence in the United Kingdom, which is also going through a massive build cycle. We're looking at a new cable facility in the U.K. as well as a 5G R&D center where we will partner very closely with our customers to build next-generation 5G solutions based on open RAN. All of this will enable us to strengthen our position with customers and enable us to sell the solution, selling the system selling that we spoke of. As you can see on the chart on the right, based on this demand that we clearly see from our customers, we will be moving from 18 million to 33 million that we have already shared with you. And now towards FY '23, we will be moving to 42 million. So overall, we will be adding 9 million capacity. All of this will take us to one of the leading positions globally. [Presentation]

The video clearly showed our clear commitment towards moving our optic fiber cable capacity towards 42 million. We've already delivered on our 50 million fiber capacity, and this is really placing us well in terms of our customer demands. In addition to that, what is extremely important is that we have also increased our total addressable market with this Opticonn offering. And this is now clearly getting a lot of attraction with our customers. Essentially, the Opticonn is a system solution of our world's best fiber, the latest designed in the cable, our interconnect portfolio, which we've added to our Optotec acquisition, and then the end-to-end logistics with light tracking and a whole host of features, which provides this complete solution for our customers. This system solution will essentially enable our customers to get -- provide connectivity to the home, to the data centers, to small cells or macro cell or to the enterprise. So essentially, every element of the network, which needs to be connected, we believe an Opticonn is the best solution available in the market today. Clearly, all of this will lead us to increase our total addressable market, it's about 7.5 billion currently. Already, we are seeing with this portfolio, we're at $18 billion, which is a massive growth because of this end-to-end solution. I will now like to hand over to my rock star and friend, Steve. He is based in the U.S., incredible experience over 25 years. He is guru on optic fiber and broadly on the telecom networks, and he will touch on forward about our global growth. Steve, over to you.

Thank you, Ankit. By virtue of STL's digitization solutions, I'm able to connect to this shareholders' meeting. To the world, 10.5 hours away from India, from a small town in Alabama, U.S.A., this would not be possible in a prior era. It would not be possible without the digital technologies that STL is developing and commercializing today with the impetus to connect the globe. I'm a perfect example of that, speaking now. STL's global capacity and comprehensive optical and digital solutions, as Ankit was explaining, by redefining the industry while increasing STL's addressable market locally and globally. A perfect illustration of our commercial and technological advancement in major markets outside STL's traditional home market can now be seen and felt in Europe, the U.K. and the Americas. In my 25 years of industry participation, I've never seen anything like the current cycle of optical and network monetization by key carriers, fiber, wireless providers, citizen networks, all driving and increasing the demand of optical stress on hyperscale entities. We consider the current optical market and economic cycle to be unlike any before. And unlike prior cycles, which tend to be short, this cycle has long legs, we believe, could run to the next decade. Next slide. We have a guy on our team, who was in the trenches developing these optical connectivity solutions with the aim of optical connectivity across the globe. Sam, let's hear from you about STL's Opticonn solutions.

Absolutely, Steve. Thank you. Can we move to the next slide? Our strongly enhanced technology portfolio allows us more than ever to be the one-stop shop for solving some key challenges of our customers deploying high bandwidth fiber networks. In our previous investor call, we summarized these challenges as ABCD, where operators need to manage A, attenuation, causing a signal decay; manage B, band sensitivity, which is signal decay through installation in perfections; C, compatibility to older generations of the fiber network; and D, for duct space, increasing the fiber density in the same duct space allows operators to increase fiber capacity without having to dig the streets as this typically takes up 70% of the total cost of deployment for the operator. With our enhanced technology portfolio, we can offer integrated end-to-end solutions for the complete network build of densification or densification programs, including new fiber technologies like, for example, the bending sensitive -- backwards compatible Stellar fiber. High-density IVR cables that allow to maximize the glass ratio in existing ducts. And having high-density connectivity solutions, build and qualified to reach more than 30 years of operations in the field. Next slide, please. With the acquisition of Optotec, which is a leader in the space of fiber and cable connectivity, which we name optical interconnect, we can now discuss and offer end-to-end solutions to our customers for every challenging encounter, which differs strongly from operator to operator, but also from geography to geography. With Optotec's optical interconnect products, we strongly increased our presence in the operator spending, mainly in Europe and the U.S. And we target to grow our penetration with our key accounts by offering a collaborative environment for co-development and co-innovation together with these key customers. The Sterlite product offering in optical interconnect starts from central office ODF solutions, over aerial and underground outside plant solutions to reach the fiber connectivity plug in the residence home or the connectivity room of the enterprise. Any solution offered focuses on helping the operator to reduce its total cost of ownership by implementing solutions that install faster, in a more reliable way with reduced field labor and reduced skills. With this, it's over now to K.S., K.S. Rao, who is our CEO of Network Services and Software business in STL. K.S. is a long-term veteran in STL, who was instrumental to guide us already through multiple transformations. So K.S., over to you.

Thank you, Sam. Now let me know how this uptick on an optical interconnect as a system solution is creating value to customers in STL. Let me tell you a little bit about what are we doing in system integration to further strengthen this STL value proposition to our customers. So looking at the 3 things. One, we invested in building expertise for building various types of networks, which are applied for digital communication. Also, we are looking at further strengthening our Opticonn and optical interconnect towards creating these 2 strong offerings, which are Lead 360 and [indiscernible] to further strengthen our system solution. And we are trying to expand from geographies. We've been focusing on India so far, we will be now looking at expanding this non-India. So let's look at the next slide, please. Let's look at how we have been building these expertise over the years. So we started with building long-haul networks for Indian Army and citizen network. That's been our biggest strong foundation that we built. Then we involved in creating a PAN-India complex net of modernization for Indian Defense, which is the Indian Navy project, which is a digital communication. And we're actually involved in designing and developing a fiber network for connecting both cell sites as well as connect fiber to the edge networks for most of the metropolitan cities for telcos. And we are involved in building the data center connectivity for cloud companies. So with all this, I think we have built a strong end-to-end capabilities for connecting and integrating server to server, small cell to small cell and enterprise to enterprise. What it helped us is to improve our total addressable market towards $6 billion to $7 billion. That's what is currently these offerings and these capabilities are actually helping STL to go and address our key customers. So in terms of -- if I just showcase some of our key capability in terms of building this network across layer. So we built 1 network for Indian Navy, which is a project Varun, what we call. It is basically creating a private backbone and a secure data network across all coastal lines of India and by building about 12 high-performance data centers in across 33 locations. And more importantly, consolidating 1,500 sites through our end-to-end network modernization solutions. Let's see the video of project Varun and how we delivered. [Presentation]

So this humongous capability that we have built in should not stop here. So as I said earlier, we are now focusing on globalizing this network system integration. Let me invite my colleague, Keith Rowley, who joined in U.K. London as a CEO for taking this network globalization, services globalization to the U.K. market. Keith comes from an extensive background of deploying digital networks with 25 years' experience. And he's been with us for the last couple of quarters, putting the entire road map towards how we can help making U.K. a digital country. I think this is where Keith is laying his entire efforts. Keith, over to you.

Thank you, K.S. If we can move to the next slide? So STL has made significant strides in globalizing its free integrated network services offerings by establishing itself firmly in the U.K. over the last 6 months. I'm honored to be leading this expansion in such exciting industry times. U.K. market is currently experiencing unprecedented and significant activity and investment in its pursuit and first for extensive full fiber connectivity on a national basis. The 3 largest U.K. operators combined are currently targeting the completion of over 28 million premises to be connected within the next 4 years to 2025. And the same operators are seeing the same expectations for this program to continue well past 2025 to 2030, a 10-year program. The U.K. government has placed high priority, made full fiber connectivity central to digital policies. The need for rapid progress on full fiber connectivity to achieve the digital Britain. Even throughout the extensive lockdown restrictions enforced by the local -- the recent global pandemic, the U.K. has ensured the continuity of investment and focus and recently initiated Project Gigabit, an investment of GBP 5 billion, to speed up deployment of lightning-fast broadband. Can we move to the next slide, please? Customers within the U.K. are in a situation due to increasing critical and hard achieved targets with faster speed of deployment, land grab against competition and greater volumes of deployment, the legacy approaches and structures of multiple vendors providing multiple products and activities is weighing heavy on their ability to achieve these targets. STL are in a unique fighting proposition to the U.K. market, which we believe really catapults STL apart from the more historic legacy approach to alternative vendors that you find with basis on the following 3 key principles: average tried and tested STL process of our Lead 360, as K.S. mentioned, product and deployment methodology, utilizing extensive existing software solutions and also the end-to-end automation to digitally transform our deployments here in the U.K. and tailored towards the U.K. environment. Secondly, we're offering a fully integrated end-to-end solution for our clients. We solved multi-vendor complications and are able to supply it as a single vendor. Everything from the factory to the field, providing table concept design and manufacturer through to deployment and field acceptance to the end customer. At the moment, within the U.K., the availability of this kind of vendor is not available. Three, we've -- and finally, we've really focused on attracting and building a solid, highly experienced U.K.-based and local leadership team in order to fully understand and adapt to the unique and local conditions of the U.K. market and the ecosystem. We're looking forward to extending our full end-to-end integrated services footprint across further European regions in the future. Thank you for your time, and I would like to pass you over now to Chris Rice, our STL CEO of Access Solutions.

Thanks, Keith. Appreciate that. If we just go to the next slide, please? So you heard Ankit and his team talk about the infrastructure elements and what we're doing there to create differentiation. You heard K.S. talk about how we're taking those infrastructure elements and putting them together in a system integration. I now want to talk about some of the network elements that we're putting across that particular infrastructure and tell you why we're doing this. And you can see that we're putting our efforts in the 5G wireless area. We'll talk about its growth and expansion capabilities there as well as in the fiber to the X environment that Anand had talked about earlier, all the different areas there. And then largely, our contributions are in the software space and more systems integration, but also software space as well. Next slide, please. So really, why are we doing this? Why are we going in this area? It's a big area for growth, but there are some truly disruptive trends that are going on that are allowing us to get into what was previously closed ecosystems. Previously, you would see that the ecosystem that was supplying these markets was monolithic proprietary systems from a small set of vendors, relatively expensive. But there are some trends that are moving on that are disrupting this, that are basically opening up those interfaces, disaggregating those solutions and making them more programmable. Those will create opportunities for us. And you can see at the very bottom of the graph that the ORAN -- Open RAN wireless is around with -- the next-generation broadband around $4 billion to $5 billion today, growing to $25 billion in 2026. And so these are trends that we think will drive us forward in some of the things that we'd like to do. And then there's a question of how are we going to go do this, a relatively small company compared to some of those names I mentioned. But part of this is aggregation is also opening up the ecosystem. We have folks who will help us out as we go forward. And so let me talk a little bit about those on the next slide. And you can see there that you have to have a certain amount of expertise in the hardware and hardware system space, and we have some really key suppliers there with whom we're working. Go-to-market is critical. We made some investments in a company called ASOCS, which is kind of an enterprise supplier of 5G systems. In addition, we're working with what people would probably consider the top tier, Mavenir and Altiostar in the ORAN space for the telco area. And as long as Facebook with their tip activity is driving us, and we're very integrated into that environment as well. The radio components, there are some big names there. And essentially, what's happening is that the Ericssons and Nokias and those are the world who've had kind of captive silicon in that area, it's been wide open for merchant silicon now. And again, those 3 items really allow us to put together with our system expertise and our radio expertise that we've built and our software expertise complete end-to-end systems to deliver into this space, both in the 5G wireless as well as the next-generation broadband capabilities. So go to the next slide, talk a little bit about kind of what we've done in this space. And Anand and others had mentioned some of the GA products that we have and the center there, which is a Wi-Fi access solution, really an outdoor care WiFi 6 solution that really applies to carrier-grade solutions, not the indoor kind of WiFi. But we're also coupling that with other areas in 5G, which are the Garuda system you see just to the left of that, which is kind of best-in-class, low, very highly power-efficient, low-power, small cell, met for indoor environments as well as we're looking at some opportunities with really global providers in this 5G broadband area or 5G and wireless area for macro radios as well. And on the very far right, you see the additional work that we're doing there in the software space around RAN and touch controller. I think of that as a brain, which will eventually control all these new 5G systems. And then our last area that we talked about, which is very well aligned with kind of our end-to-end solution capability in the fiber space is what we call our programmable FTTx, which is essentially a next-generation 10-gig solution for fiber-to-the-home, fiber to the enterprise, fiber to the tower, et cetera, that we discussed earlier. And while all these are open systems, we do obviously want to make sure that our solutions from STL are differentiated from others but not differentiated in a way to kind of close them off to our customers or create any problems for them, but provide some benefits. And so we've looked across all these different products that we're building as we build our product road map, and we've come up with these 5 big discriminators that we look at. And more and more of these apply to all the products we're building, which is really to be smaller in size, better in cost, lowering in power, easier to deploy and simpler to operate. All of these things hit the TCO that we're looking to do and deliver to our customers. Just go to the next slide, we'll finish up. And so the good news is that we're seeing this work that we're doing in this whole system space and moving into this network space, access space tied to that paying off. You can see some of the discussions there from some industry folks that are very well known. They are talking about how well STL is delivering into the space, what we're doing in this space, the appreciation for what we're doing. We've seen orders already. Don't talk exactly who those are now, but those are the areas in which we've seen those orders. And this is something that we're already seeing revenues for in the second half of '22. So very excited about this. I think it complements a lot of what Ankit and his team and K.S. and his team talked about. So let me turn it over to Manish now, who I think has a little quiz to kind of get us going.

Thank you, Chris. I thank Chris, Keith and all the people here who have shared some incredibly interesting information with you about what's going to happen to digital networks. One of the fun things that I know is that the Internet knows everything about us. One day, I was asking my friend, Mark Zuckerberg, which hotel room did he stay in. He was not telling, but they get to find out about everything that is happening with us on the Internet The question today is, how much do you know about the Internet. So let's have a little quick here. Sorry about that. Here's this. It works very simply, you pick up a cell phone or any kind of Internet device that you have, you go to menti.com M-E-N-T-I .com. And you use the secret that we -- the secret code that we have to get you into this interesting quiz. The secret code that we have is site 52928965. Pretty easy. Yes, I can see some of you have already figured it out. All you have to do is to take a cellphone, type menti.com and enter the code 52928965. We're going to get -- yes, this is a fast-moving group. We have about 21 people already. And all of them, I think, have a very strong confidence that they know everything about the Internet, but the truth is going to be out very soon. Hopefully, they know all, right? Right? 40 people, that's pretty good. Let's have some more come in to see if we can click a half century here, almost there. Well, somebody has actually decided to drop off, don't be shy. There is actually a gift hamper at the end of this, sponsored by [indiscernible], you get some really cool stuff. I'm trying to flip one of those Garudas from Chris and send it to you. It will be a small cell with very big potential. So -- okay, yes. We are at 50. So what I would do is go ahead and start with the first question. I'm going to give you one more small second there. I am thinking maybe we can get to 60. Looks like my wish is going to be granted. A few more seconds. Okay. Here we go. So now we enter the first question. Okay. What percentage of cellphones aim to support open interfaces, multi vendor RAN in their 5G networks. Is it less than 10%, about 25%, about half of them, nearly 80% or almost all of them. This is what we have -- how many of them will support open interfaces. You can answer and open interfaces means they are not, they don't like vendor lock-ins. They would like to get all the open disaggregated cool stuff that Chris talked about. Okay, well, a lot of you actually have higher expectations than Omdia and Analysys Mason and STL Partners have. But you are -- I can certainly see your hearts in the right place. So -- let's see how are you doing with the leader board. Okay. This is the fun part. This is the fun part. There you go. The wizard is really leading the game here. Let's go to the next question.

Manish, we can maybe announce menti code once more in case someone missed.

It's up there. The code -- the core code is go to menti.com and enter 52928965, 52928965. Okay. Here comes the second question. How much time do Internet users globally spend each day on the Internet. I for once sleep at about 6 to 7 hours, except yesterday night. I'm not telling you that one. But do this do 1 hour of Internet; 3.5 hours on the Internet; 7 hours or more than sleeping time; or 10 hours on the Internet. Well, we're doing everything on the Internet these days, talking, everything, right? So what is the answer. How much time are people actually spending on the Internet? A lot of you are doing a lot of paper reports. The world has actually moved on to 7 hours and plus on the Internet. Or maybe when you are sitting on Whatsapp and chatting with your friends, we don't count it as Internet, Mark Zuckerberg disagrees. He considers that Internet, except when he's called to the Federal Court. When he answers it differently, but very good. Let's see how this one is going now. Okay. Some change in order of -- Oh yes, we did have a yoyo there. So now yoyo is leading. Well, if you really tell us the real name, you actually get a gift hamper from me. That's not untrue at all. So let's go to the third question. And I'm going to go quickly on this one. The percentage increase in number of 5G subscribers in 2020 were 100%, so it doubled; 400% so it went 5x up; 1,000% it went about 10x up; 2,500%, which is 25x; and 4,000 or 4,000%, which is 40x. How many times, what percentage increase in number of 5G subscribers we saw in 2020. Time is up. Okay. 400%. And there, you would be wrong because the actual answer is 2,500%, okay? So this 5G thing is way faster than you think it is. Let's see who is the fastest in answering though. Talking about doing fast. I don't have 5G, as you can, obviously see. Maybe very soon if these STL guys come up with the fiber sometimes. Here you go. Rakesh Shah and Bhupendra have pushed yoyo below, Rishabg is ahead. Let's see, this is getting exciting. So we want to go to the next question. That's 4 of 7, I'm going to move this fast now. It took 5 years for 4G to achieve 400 million subscribers. How many years has it taken or will it take for 5G to achieve the same milestone of 400 million subscribers? If you were paying attention, the answer was in the preparation section just before here. But how many years would it take for 5G to achieve 400 million subscribers. 4G took 5 years. Are we going to take 6 months, 2 years, 3 years or the whole 5 years again. Let's see. Time is up. Ian, got it right. 36 people got it right. Actually, it has already happened. If you were just noting you would have known, I didn't get 5G somehow. But there are 400 million people in the world who got it and it all happened in 2 years. So this thing is fast on the uptake. Let's see. We are now going to keep the leader board come in a little bit later because we are getting into the questions with a lot of -- let's see if the question is coming on. Which country tops the Network Readiness Index in 2020. That's an interesting one. We will figure out. Which country is connecting its people and giving the benefits of the Internet to people. Well, is it India? I'm biting the nails there? Or is it Sweden? Or is it Singapore? Or is it Keith's United Kingdom or Chris's United States, which one is going to win here. Let's see that one. Oh, 6 people believe it's India. Let me guess. The real answer is Sweden. It's funny, but it has been the consistent winner. I was just traveling once and the Internet did work there quite nicely. So here we go. The Network Readiness Index, which is the best Internet experience is found in Sweden. United Kingdom and United States are in top 10. India is -- I won't share on this call. I can give you the report though, sorry about that. Carrying forward, we might see the leader board now. And we can see that things are changing. Rakesh is maintaining his lead, Bhupendra is there, ET has entered. These aliens do know a lot more about us than we do at times. Rishabh is holding his fort. Let's see what happens when we move forward. There are 2 more questions, and there are at least 4 hampers out there. How much are North American broadband providers, not the government expected to spend on FTPS over the next 5 years? Is the money question. There was a question -- there was a little bit of data about how much the government is spending and that is around $60 billion I believe. How much are the provider, the private companies, are they going to spend $5 billion that's really small change compared to the government; $15 billion getting somewhere in the range; half of the government; almost as much as the government; or way more. Let's see. Who is doing it better? None of you think that they're going to match the government nearly and seems like that's what they're planning to do. You've got there -- some of you really got that false ride. Very good. We've got the final question, and we'll find out who knows the Internet the best very quickly. So carrying on. While we get the final question. Rakesh is still winning. No, no, okay. But Bhupendra beat him. That was the final question, actually. So Bhupendra you actually missed it by a little bit of a whisker here. Bhupendra got 4945 points. I don't know how they calculate the number, but it sounds really good. I wish you had some 55 more points you would have gotten 5,000. But here's the thing, Bhupendra, ET, Rakesh Shah and Rishabh, I'll drop you my e-mail. If you tell me who you really are and where you really live because I'm not [indiscernible] so I can't find it out by myself. There is a real physical hamper of goodies from STL that will come your way. But in the meantime, let's get back to see what STL is actually going to do. Because I hear they have some really nice ways of explaining how this Internet actually comes to you. So thanks so much for participating, and I will bring the session back to our dear Dr. Badri. Dr. Badri is -- we're getting somebody telling us who's coming second. I guess, we will give your hamper then. Dr. Badri is a very good friend and an amazing person because he understands all the layers of the network. Now literally, he does. He understands how you spike an optical preform to make it have much better bend sensitivity, and he understands how you play around with the codes of it will be open radio access networks to make sure that these OEMs don't lock you in. And he's not just the one who understands, he makes sure that the technology teams convert those understanding into real products. But today, we are going to have a little session of Dr. Badri being Professor Badri. So over to you, Badri. And please take us to how these networks are evolving? And what are we going to do about? But as you do that, also remind us of our capabilities that you have helped so much then.

Thank you, Manish, for the generous introduction. Welcome, everybody, and thank you for the time that we have with us. All right. So foundational capabilities is what we're going to spend a couple of minutes on. How the market is open for us. I think Anand and the rest of the team all of us spoke about how we've grown our addressable market. But what are the key foundation capabilities that is going to help us succeed in this journey to addressing that market. That's really what we're going to speak about here. Just over to the next slide, Manish. So 4 pillars, which we spoke about, technology, accounts management, the customer management, the key account process very important, the ecosystem alliances and investments that we're making very important with our culture. But I'm going to spend the next 3 or 4 minutes on the technology part, which gives us that ability to address that market share, right? So we spoke about the 3 solutions. What are these solutions. Basically, the solution means some of parts is bigger than -- the whole is bigger than some of parts. The Opticonn portfolio that comes with us traditionally from our fiber and cable business and now brings in interconnect and programmability. The wireless solutions that Chris spoke about in the accellus platform, all bringing us together with what K.S. spoke about earlier on the netmode offering on the end-to-end solutions part, right? We'll speak a little bit about how each of these components and systems and solutions fit into the network that you are familiar with as users. And just a little bit about how we got here systematically over the last 3 to 5 years. Our R&D spend has risen significantly over the last 2 years. And now it is at over 3% of revenues. And that has led to an exponential increase in our patent application filings and patent brands, right? Each of these solutions is covered by our intellectual property, whether it is in the OpenRAN ecosystem that Chris spoke about or in the services ecosystem that K.S. and Keith touched upon or in the optical portfolio that Ankit and Sam and others spoke about earlier, right. And those 569 patterns continues to grow. Year-on-year, we are going to match that growth with that exponential focus on getting our intellectual property in this time of excitement with 5G coming in. Next slide Great. So we'll spend a couple of minutes just going into understanding how we fit into this access the last mile, where all the excitement is. And access means basically the access to the customer, the end customer, right that is all the stuff that's happening today. We have established ourselves as a complete solution provider in what is called FTTx, fiber to the x, meaning fiber to the anything, fiber to an enterprise, fiber to a home, however to the huts, if you will, in the emerging markets, right? So if you look at it, how our each of our pieces fit, the red lines that we just saw pop up on the screen, the 4 tech confluences, that's where our optical fiber and cable is heading to, right? All of the cool stuff on the cable and connectivity, which you see is sort of embedded in that 6912 cable that we spoke about earlier, terminating between data centers for feeding central offices and then eventually to the homes and the buildings and the apartments and so on and so forth. So that's our entire portfolio, right? And if we flip through to the next thing, the next icon here. All of the fiber that you put in the ground has to be connected by what is called optical connectivity or passive connectivity, that will also take outside plant, in building. Each piece of these are fairly sophisticated engineered solutions that had to be installed carefully and to maintain and last a very long time. And these are highly engineered products that enable the signal to reach the customer, right. A very important portfolio from the Opticonn. That terminates in an active network with lasers and detectors and all the networking equipment in our programmable FTTx portfolio that Chris touched upon. And that is really what you get with Sterlite here is an edge data center package in a footprint of a pad, right? And you've got a component called orchestrator, software-defined network controllers, hardware abstraction for what was used to be a very sophisticated component in the OLT and in the ONT where you terminate the fiber at the customer's premise. All of this with our software stack has moved into the edge cloud. Literally, what we are building from the ground up, the fiber layer, the connectivity layer, the OLTs and OLTs directly into the edge cloud. And for the cost and scale and efficiency that, that one brings to this market, we are bringing an edge cloud along with it. And that is where we find our strength in the technology stack that we're building here, right? So that then needs to be put together in terms of data center services, that's our IDS portfolio. And the design, build and manage capability that we spoke about a little earlier in terms of integrating it. Putting the outside plant network, commissioning the subscriber, managing the experience after that, and that is all part of the Lead 360 and the IDS journey. And this kind of hopefully gives you a quick overview of how this network is built out, where all our technology stack is growing. And as you see, we have not left anything -- no problems on the table here. And -- to put it all together, the last part is the network software, what we call the design and build and all of that is also run to a very efficient software system that starts all the way from designing the network, all the way upto the billing day, right? That's a quick summary of how the wired journey, how our technology feeds into the end user through the operative network. And moving that story along with the same theme from the wired experience that one is familiar with as residential broadband, enterprise broadband is mobility. Mobility means today, it is 5G, 5G began. Fiber is key to the 5G journey. Fiber is key because you're going to have a lot of small cells, lots of macro radios, very high capacity, large number of end points each of this has to be front hauled so-called front haul, meaning from the radio head to the central office, from the central office back to the cloud. All of that is fiber. There is simply no alternative to it other than to connect them to fiber. So fiber has to go everywhere, people call it deep fiber and whether you're up in the top of a building or surfing on a hot air balloon, you are going to get connected through a radio signal to your mobile. And that signal is part of our ecosystem of the accellus solution. Garuda is a small cell that we just launched. We believe we are the first launch in that category in indoor small cell and enterprise small cells where it's manufacturing, or whether it is a campus or an enterprise. All of these radio end points, along with the compute and the software infrastructure that is going to be needed, it comes with this end-to-end solution. So we are multi-generational compliant. We are open, they are disaggregated and that has brought a tremendous amount of innovation that earlier Chris has spoke about leading into traction with customers, with hardware business and what we believe is a very, very exciting time ahead. So I'll stop there and introduce my good friend Sandeep. Sandeep has been here with us for about 6 months. A terrific sales guy. He's been in the industry for more than 2.5 decades, and has led Nokia through multiple roles in the Asia-Pacific region. He lives, breaths and thinks access and wireless. Over to you, Sandeep. I will...

Okay. Thanks, Badri. Hi, everyone, on the call. So I'm going to take just 2, 3 minutes here and very quickly tell you about -- our teams have talked about some wonderful solutions, a wonderful strategy and thinking, which is well ahead of the curve. So the good news is what I want to share with you is that our customers are responding to this extremely, extremely positively. I'm going to give you a bit of a snapshot of behind the scenes with some real data to tell you that whether -- how well it is working or not. I leave that interpretation to you, but I'll give you some real data. So to begin with, we have key accounts across the world. A couple of them, Openreach, which is -- which has been talked about, Airtel in India, then a large account in the U.S. and a large account for digital transformation in South Africa. And this account in the U.S. is about our open RAN solution, which Chris and Badri did touch upon. When we look at our business pipeline, which have these 2 pie charts on to your top right. If you just look at these pie charts, you start to look at that our company, which took a very strategic call to start expanding not only the solutions portfolio from optical fiber or connectivity solutions to access to software to services and globally. If you just look at this whole chart, we are starting to find some excellent traction around the world. EMEA, almost 2/3 of our total participation pipeline as we speak today. And this, of course, changes over a period of over the year, but this is the snapshot as we look at it today. Then the second point, which was talked about very briefly in the beginning was -- just stay on the previous slide, please. Thank you. So that we are consciously building a key account management structure, which takes all our solutions to our key accounts around the world. And if you look at the development over the last 6 months or more, the total participation funnel, which we have is nearly 2/3 of that is coming from the key accounts, which just tells us that the spenders, the spenders who consistently spend on the type of solutions we have to sell. We are starting to see some great traction with these consistent standards. And just to give you another quick flavor, which is how are our deals progressing, not only that we have a large number of big deals on our pipeline, but what I want to draw your attention to here is on the left bottom of this slide, which is that our key accounts are starting to engage with STL on multiple solutions and multiple portfolios at the same time, which just tells us the following things that they start to see a huge amount of viability in our portfolio, and they start to see a huge amount of credibility what STL brings to them in stitching all of that together. And just as a quick customer validation for all of us on the next slide, please. Kevin Murphy of Openreach turned around to say the statement, which you can read on the top of the slide. STL is 5G ready, high-capacity network will enable us to now provide faster delivery and enhanced user experience, all of them the right words. But what I want to bring to your attention here is that these are not only the words, but when we look at our relationship with Openreach just as a customer validation point from 2020 to 2021, today. It started with a transactional relationship where they had a problem. We had to solve it. In 2021, it has already moved into a long-term relationship where we have added more portfolios, more products, longer-term agreements. And as we are moving into the future, we are adding more portfolios that becoming much more consultative in our engagement with Openreach just as an example of customer validation here. So happy to take questions at the end of the whole session, but hopefully, I've been able to get the message across. Getting Anjali on board to speak to you next. She is our Head of Human Resources, a very strong professional who puts a lot of focus on building talent, attracting talent, building culture, values and diversity in the organization. I'm sure you'll enjoy this. Anjali, over to you.

Thanks, Sandeep, and warm greetings to everybody who's joined today on STLescope. When you take a peek into what we are doing, you've been listening to all the school, exciting cutting-edge next-gen technological work that we've been doing and will continue to do at STL. But at the heart of it all, at the heart of it all is our people and our culture and our talent. We call ourselves the [ Stlellars ]. So when you step into STL, you'll see that we are really investing part of lots of skills, going -- having expertise across the stack. People from more than 30-plus nationalities working together, bringing in very, very diverse, new, different ways of problem solving, new approaches all of that, but the thing that binds us together is our common purpose and value creating One STL. Again, stepping in into the organization, you've experienced that we have a very, very empowering culture, which I'll talk a little more about. But equally important, it really drives a very enriching experience and growth opportunity for our employees. Over the years, it's been possible for us to really deliver on all of our commitments, primarily because we've been able to attract some of the best talent across the world, really exceptional talent across areas. Business leaders, market experts, technologists and a vibrant batch of graduate engineers and management trainees, all of them working on next-gen technologies, customer enabling solutions and things that are really, really cool and next-gen. So this is really something that is very exciting inside the organization. Moving forward, what really makes it happen when you get it into the fabric of [ Stlellars ]. I think the thing that really stands out is that learning is really in our DNA. And it cuts across the board. In fact this last year alone, we clocked more than about 40,000 hours of learning, with access to some of the best global universities, marquee colleges with courses available to employees on next-gen technology, looking at leadership courses, future capabilities, all that we think is really, really valuable for bringing meaningful contributions for our customers. And therefore, no surprise at the start of the session today, we talked about how we are clocking patent portfolio hitting 560 plus patterns at this point in time, all the result of this collaborative learning and growing together. Adding the validation for us has been consecutively winning the Great Places to Work certification as a validation of what we are and the culture that we bring in on learning and trust for employees and a great place to grow. Going forward, this last year has been an unprecedented year. It has truly been an unprecedented year, but we really held hands and rode in one direction. We created an STL family task force team that works across the globe to make sure every employee had access to medical health and support as and when it was required. In fact, what we did is we went out and built a partnership all the way from the symptom being identified to post care treatment for every employee, every partner that we work with. Whether it was looking at telemedicine or mobile centers for COVID care, all the way through mental and emotional wellbeing for employees and their families. So we really have come out stronger together already and fit to drive towards the next phase of growth. And with that, I am very happy to introduce a very dear friend and our CFO, Mihir. Mihir needs no introduction, a very prolific professional with broad experience and deep expertise across various areas of finance and mergers and acquisition strategies. Before joining us he was even a cofounder for a digital media content company. And we are very, very happy to have him come in and partner with us building this entire value for businesses that he has always consistently done in his profession. So over to you, Mihir.

Thank you very much, Anjali, for this very generous introduction. So let me talk about how only excellence strategy, the work that we're doing on the people side finally kind of translates into numbers. Eventually, I mean, our community, this community gave us all the good things and we like to, finally, we kind of sign off the bottom line with the numbers. So let me touch upon that a little bit with you all right now. As we've been hearing over the last kind of hour or so, we've built these foundational capabilities on the back -- and on the back of those foundational capabilities, we have the levers that we are going to drive ahead for our growth. These are exactly what will drive our financial success going forward. Our strategy that we've been following is panning out exactly the way that we thought and we will take this ahead now to kind of convert into more financial success. Let's focus on the current year first. The year that went by, was slightly difficult year with in an unpredictable environment because of dynamics. We had a slight dip in the first quarter, as you see, but very quickly, we put our act together and put out a robust financial performance in what was an unpredictable/difficult environment. And the growth momentum was pretty much back in the second half of the year. We continue to grow quarter-on-quarter from the dip, and we delivered the full year EBITDA at about 18%. What I'd like to say here is that all the efforts that have gone in over the years kind of helped us come out of this situation much faster than we otherwise would have been out those. Not just on these parameters. I think on the revenue side also, we grew globally and in the telco and cloud segments, our intended focus areas as we move from FY '20 to FY '21. Our Europe, U.S., EMEA and U.S. shares of our revenue went up, and that will continue to grow in that direction is what we believe. Our telco cloud segments also will continue to strengthen as we move ahead implementing our thinking and strategy. But as I kind of zoom back a little bit, zoom out and look at the last 3 years, all this has happened on the back of very structured and systematic investments that we made in organic capacity building, in inorganic capability acquisitions. So we spent more than half of the funds that were available over the last 3 years on organic capital expenditure and spending to build our capacity. Our optical fiber capacity is now up to 50 million, fiber kilometers, optical fiber cable capacity is up to 33 million fiber kilometers. And we want to keep focusing on that, of course, along with making sure that we also return capital to shareholders. We've had consistent dividend payout at 30% of our net profit, and we hope to continue to do that in the future as well. So this has brought us to the space. And as we continue to create a little more capacity, as Ankit mentioned earlier, we are increasing our capacity on the optical fiber cable side to 42 million now. We will slowly shift from this capacity focused investments to more global capability and R&D investments. On the organic side, we are creating the capabilities, investing in R&D in particularly in disruptive technologies. And on the inorganic side, we will continue to look at capabilities, technology, which we can have access to, to accelerate and push out our growth. Of course, now we are at a stage where we will -- just on the previous slide, 1 second, please. We are at a stage where we will also use a lot of extra funds generated to reduce our debt. We will deploy funds for debt repayment so that our net debt equity goes below 0.5%, and that's a clear objective and focus we have. Next one please. All these focused investments that we have made in the last 3 years and we will make over the next 3 years will push us, propel us forward to a $100 billion exit run rate by FY '23. Now we -- because of the pandemic year, we are behind by about a couple of quarters, but our focus is very much on the $100 billion run rate by FY '23. Though we had earlier said the full year numbers will be -- FY '23 number will be $100 billion, but given the pandemic, we are behind by a couple of quarters. But I would focus on our target, and we will get to a run rate -- exit run rate by FY '23. The 3 growth levers that we spoke about in a very, very structured manner, very focused manner is what will drive our journey from last year's exit run rate of $59 billion to what -- in a couple of years' time from that Q4 of FY '23 to a $100 billion run rate focused on growing the optical business, globalizing our system integration business or foray into Europe, et cetera. And of course, we are building our Access Solutions business, and that will take us to the $100 million mark by the end of FY '23 is what we are aiming. So overall, our goals remain pretty much same barring a couple of quarters out. We will focus on the $100 million number, but by -- as an exit run rate for revenue by the end of FY '23. And we will again, keep focusing on the net debt-to-equity ratio of 0.5, again by that time period, given that we have some opportunities and we decided to invest a bit in that. ROCE remains -- the target remains to -- at north of 20%. So that's what we are anchored on. We are all geared up to do that. Now how will we do that? We'll do that under the able guidance of a very, very strong board that we have, including some stalwarts and very reputed individuals as independent directors. We have Ms. Kumud Srinivasan, VP Director at Intel Corporation, spent more than 3 decades in the U.S. She also served at Intel, India from 2012 to 2016. We have Mr. Sandip Das, I suppose one of the most respected telecommunication professional in Asia, former MD of Reliance Jio, former Group CEO, Maxis's Communication, which is now Vodafone India. And of course, he was founding member of the private telephony in India, he was part of the group of individuals who founded Hutchison Max in the '90s. We have Mr. B.J. Arun. B.J. comes from Silicon Valley. He founded and led multiple successful ventures there, founded California Digital, Librato software company; and recently he was CEO of July Systems. He was instrumental in scaling these companies, we look forward to his guidance on how we scale domestically, if I can say that, if you are at STL as well. Industry leader, Arun BJ is Vice Chairman of TiE Global, very, very happy to have. Last but not the least, Mr. S. Madhavan. Mr. Madhavan is a fellow member of the Institute of Chartered Accountants of India, has been a stalwart in this industry across consumer, banking, technology and holds position of Director on various listed companies, like HCL technology, ICICI, et cetera. Worked with HUL. He had a very successful practice of his own, which merged into PwC. And there he led the tax practice into a very, very reputed one there. So will be very happy to have the guidance of a very strong board. And we believe that with the guidance, with the strategy that is put in place, the excellent team that we have, we will look to doing all that we intend to do. With that, I would like to invite Mr. Madhavan and request him to share and talk about thoughts -- of his thoughts on the governance, sustainability and impact at STL. If Mr. Madhavan, you may please kindly take over.

Thank you. Thank you, Mihir. Thank you for those generous words of introduction. The slide talks about sustainability and impact. And I think those are 2 very key words. But on a broader note, as you can see from the other byline, ESG, which is environment, social and governance. Clearly, the topic of the moment, every Board that I'm involved in talks about ESG. But I'm particularly pleased in this STL Board to talk about the initiatives that STL has taken in this area. And while environment, social and governance is clearly very topical, as I've said, there are companies which are pioneered and I use the word advisably, in many aspects of the ESG framework, sustainability and impact to be particular. Next slide, please. So I was -- I'm delighted to talk about what have we done in this company in regards to some of those specific initiatives forming part of the overall ESG framework. Here's one element of sustainability that we've looked at very carefully over many years. And I think the company is very proud that it's the very first certified fiber and cable company in the world to be certified for a 0 waste to landfill capability. Which is extraordinary, really coming to think of the amount of waste, which is generated in a typical fiber and cable companies. That you actually have eliminated the need and the obligation to take your waste to landfill, which I think is extremely creditable and it's from a very reputed certifying agency. There are globally very many standards that one needs to observe to even approach and even participate in the certification process. And some of these metrics that we see in the slide before you sort of testify to the progress that STL has done in order to become an environmentally responsible company. The -- I particularly call out the 97% figure of the fact that all of the waste is actually recycled and reused, based on the 3R approach of reduce, reuse and recycle. And the resultant benefit of the significant reduction in carbon emissions is something that is to be called out. And this has been an initiative over many, many years, long before ESG and sustainability even became fashionable. Next slide, please. But let me step back a moment and talk about the broader social initiatives, of which the landfill initiative is one part. And if I talk about the environment to begin with, the ecofriendly responsible operations that STL strives to operate on from a standpoint on whether it's human rights, whether it's labor practices, wages and salaries and all of that, so that's one component of being eco-friendly. But on a more specific note, I already alluded to the carbon emissions reduction. But in this slide, you will see on the far left-hand side, with regard to the 9 lakh cubic meters of water recycled and reused and replenished in the communities surrounding the factories in which the company has its operations. Also with regard to the 6,000-plus tons of carbon dioxide, with regard to the plantation in the surrounding location, and that's an ongoing initiative. And I think if any of you have spent the time to go to one of our factories and look at the surrounding communities, there will be evidence with regard to the breeding that you would see before also. Specific to CSR, which is, of course, everybody here on the call would know that this is an obligation. But I think the better companies, the more socially responsible companies have never looked at CSR as obligatory or as mandated by law. They have sort of gone beyond that. That's just the baseline. And this company, particularly STL has gone ways beyond what is required. But specific to the CSR, what have we done in this particular year is something that has been called out here. Talking about the 1.32 million people whose lives have been impacted simply for the reason of better connectivity through the variety of products and services that STL provides. It's, of course, the company is a signatory to the UNGC, the charter of the sustainable goals. 3,000-plus women empowered, that's 3,000 and counting, I guess, because every day, there are additions to the number of people who are empowered simply because of the digital abilities that they are provided. I talked about the 0 landfill. But on a broader note on sustainability, 100% of the manufacturing interruptions, they are all certified for this purpose. And that also, I think, increasingly, and I was in global panel just the other day where the clients and the markets are increasingly demanding that you are certified for a variety of things around the ESG even to qualify to respond to tenders. And I think globally, whether it is the pipe and cable industry or even beyond, increasingly, sustainability goals will be achieved simply because clients would demand that the market would demand. But as I said, before when I began this talk, I think social initiatives and sustainability goals have been something that have been basic and fundamental to how organizations have gone about the larger purpose and STL clearly has realized that you have to repurpose the company for the times to come in. So Sterlite, clearly, is one such fulcrum or the anchor based on which you sort of repurpose the company and here is evidence as regards to that. And finally, of course, I talk about a more inclusive society. And again, I think the pandemic, to be fair, has accelerated the need to be more inclusive, has accelerated the need for corporations as opposed to the governments of the world to address inequality in all its terms, and I make a fairly big point here. In other words, I do make the point that the pandemic and the aftermath of the pandemic will force companies to repurpose beyond just the bottom line. And therefore, as a result, sustainability in all of these initiatives will be improved. Quickly now, I follow one initiative out of the whole host of CSR initiatives, which is on Garv because it does talk to the fact that -- it addresses the fact that we do provide digital connectivity and manage networks for a variety of client interfaces. And Anand, in the earlier first part of this presentation, did call out the BharatNet initiative of just this morning, that the cabinet has announced a significant capital expenditure. And this -- that initiative addresses all of those elements and provides connectivity to big interiors of the country. Next slide, please. I will conclude with this last slide on governance, which is the last part of the ESG framework. And these are various elements that you can see in the screen. But let me limit myself to my concluding remarks with regard to Board governance, which I think drives all of the other elements that you see in this chart. I think all of the ESG, which is increasingly being mainstream due to the company's strategy, is driven by the fact there is a strong governance oversight provided at the Board and Mihir did talk about the number of [indiscernible] kind of talent and expertise and diversity that is available today at the STL Board. So whether it is strategy setting or managing talent or working with Mihir and his team on capital allocation that he talked about or on a broader basis, looking at enterprise risk on an overall basis given the variety of addressable markets that we look at, I think governance is at the core of and the company and the Board take this very seriously, extremely top of the mind agenda, and every meeting of the Board and the committees do look at doubling issues in very fair detail. I think I have finished my part of talking to you all about ESG, and I'll hand it over to Anand to take the presentation forward.

Yes. Before we -- thank you, Mr. Madhavan. I request Sandip Das -- Sandip to make a few comments, and then I'll just summarize. Sandip, if you may, thanks.

Thank you, Anand. And -- this is a good evening from New York, which is extremely warm and unusual with the morning in New York. Thank you, everybody, for being here today for this very interesting presentation. For all investors who are watching STL for a long period of time and have seen the manner in which this company has grown, clearly now, we have stepped on to the escalator, and we have 3 or 4 things that are facing us today. The first thing is that we are planning hyper growth. We are expanding furiously across the world and across portfolios. And on top of all that, we are delivering all this at enormous speed. Now any investor was aware of the strategies and the structure in the manner in which this company is moving forward, but they, at some stage, also wonder whether this company would have the sustainability and medium- to long-term ability to withstand this growth because. While we have our head in the clouds to borrow [Audio Gap] along with the senior management of the company. And the Board is very diverse in its multinational experience and the experience of tech backgrounds, which is enabling us to ask the right questions to the firm. And I must say that we are trying to make sure at all points of time, the company remains vigorously and maniacally focused on its strategy because strategy has to remain sharp in the ultimate delivery of what we want to do. But in the process, we are trying to make sure that we don't lose focus on fundamentals, processes and everything else that goes with it. So therefore, systems, processes, the whole process of globalization and as Anjali spoke about people, very, very important. I mean, at the end of it, you can have the best strategies in the world, but if your people are not skilled and focused and coherent and cohesive and aligned towards the purpose of this company, it's going to be very, very hard. And now as you can see, across the faces, that we are now truly, truly global. And therefore, it is understandable that various parts of our company will remain culturally local. And there'll be a U.S. firm, there'll be an Italian business and then British business. But at the heart of it, we will all be joined together in our alignment on our cultural values of the company. And that's going to be our major integrator and that we are making sure that it's happening. Skills have to be developed at very fast rate. And unless the entire machinery is delivering together, it's going to be very, very hard. Madhavan spoke about governance because in your attempt to try and do things quickly and fast, it's very easy to get seduced in skip levels and skip processes. So therefore, the Board is remaining focused at all points of time to see that there are strict governance processes. We are a company that is becoming larger and larger presence in the stock market. [Audio Gap] it is almost inevitable that we have to maintain extremely high standards of governance and processes. So I want to assure the investor community that a lot of work is being done by the Board and the senior management to make sure that this company is not only going to achieve its goals, but it's going to sustain itself and strengthen its fundamentals. One -- 2 more aspects are very, very important. One is that we are continuing to make sure that at all points of time, we do not lose grip or grasp of technology. We have to be our -- if we are not technologically contemporary, we will be dead as an organization. And so we are keeping our fingers on that pulse all the time. A lot of our growth will come through a conglomeration of alliances, acquisitions and our own organic growth. And I think managing all the 3 together properly will require enormous amount of skills, which are requiring and very deft handling. So right now, I'm very pleased to announce that all the -- we are on all 4 positions as far as these things are concerned. Now the future will tell us how successful we will be. But I'm glad to mention that all these things are in place. And the Board is extremely committed to make sure that we not only become -- achieve our goals, but also become a very finely run reputable international organization. Thank you, Anand.

Thank you. Thank you, Sandip, for truly guiding us during this journey and providing us a direction you and the entire Board keep providing us the impetus, at the same time making sure that we are staying true to our strategy as well as executing as per the plan. So I'll just summarize today's presentation and the discussion that we had. We essentially talked about 5 things that I hope we've been able to register that effectively today. One clear thing is the fact that we are now truly in a decade-long network creation cycle, which is being driven by 5G, the overall digitalization by the fiber to the x. What we spoke about last year has been clearly validated by this pandemic and the capital infusion in the sector that we see. The second part is now we have an addressable market globally of about USD 40 billion with the portfolio additions that we did consciously, and the global positioning that we did, now we have a much, much larger total addressable market. The third aspect is that we have very clear focus on our 3 growth levers, which is growing the optical business, globalizing the system integration business, and building the best-in-class access solutions, which is our wireless 5G hardware, software disaggregation business. The fourth point, which Mihir talked about is the fact that we are clearly on our path to achieve the $100 billion revenue run rate with the net debt equity that we talked about and the ROCE of greater than 20%. This is all done with Sandip talking about the 4 foundational pillars of technology, of solutions, of ecosystems and the great talent and culture. And clearly, clearly, all this is guided with our values, with our purpose and a great, great commitment and responsibility towards our environment sustainability with the highest standards of governance. So thank you, everyone, for giving us this time to explain and to talk about STL strategy. And I'll request you all to please bear with us and continue to stay connected for some more time, and we'll be very happy to answer any Q&A that you may have at this time.

[Operator Instructions] So the first question is from the line of Mr. Neerav Dalal.

I have 3 questions. First is that when we started our journey, we used to look at -- we were looking at optical fiber cable capacity at 50% or close to 50% of our optical fiber capacity. But now that we are moving ahead, say, FY '23 will be 50 million fiber and 42 million fiber cable. So I wanted to understand the thesis behind this change in your strategy? That was first. The second question was that what would be the CapEx plan for FY '22, 2023 now that we are spreading our reach into U.S. and U.K.? And thirdly, with multiple businesses or new businesses coming in on the asset side, more products coming in outside of the optical fiber and services coming in, in U.K., how should one look at the EBITDA margin profile moving ahead? because U.S. and U.K. would be high sought locations and margins could be lower than -- so these are my 3 questions.

Sure. Neerav, we have the full team today, so I'll request the team members today to start doing that. For optical fiber part, which you said that we started with 50% capacity utilization, how is it looking right now and what's the rationale for us to increase the capacity, I'll request Ankit to give perspective as to what gives us confidence to increase the capacity to 42 million and what's sort of utilization we're running at.

Sure. Thank you, Anand. So I think clearly -- there's a clear intent and focus from various stakeholders, whether it's type of operators, the hyperscale players as well as government to invest significantly in building fiber networks. As we clearly said, whether it's for 5G, whether it's for fiber to the x, any of these applications are in the rural connectivity, we clearly see this as an 8- to 10-year build-out that Anand must have touched upon. So looking at that clear commitment in our clear conversations with the CXOs of multiple customers, our key accounts, as Sandip talked about, all of this is giving us a lot of comfort that we are -- there is this clear build-out happening. We are well positioned with our end-to-end Opticonn offering. And that is really the premise that we have taken this decision to move towards a very, very end-to-end solution offering that we spoke of as Opticonn. The whole play towards customers has moved from a component sale to this end-to-end solution sale. And that is giving us this confidence and hence, we have taken forward this decision.

One thing here. My base question was that, see, earlier, we -- so we have 15 million optical fiber cable capacity and 30 million optical fiber capacity. We moved ahead. We have -- we now have 50 million and 33 million. So is it that we are now looking at more supplying -- rather than supplying outside the fiber, we are now looking at using it within the organization and hence, this will have a benefit on the margins or on the business. So that was where I was actually going.

That's absolutely right, Neerav. That's absolutely the intent that a large portion of our own fiber will be utilized for our cable requirements. But from a customer perspective, it will be this next-generation fiber that we've spoken of, our solutions on cable, all integrated with our optical interconnect that we have now acquired the capability. All of that then coming together as a solution going to our global customers. So our go-to-market is moving very, very actively and very positively. And the response from our customer is not just an Openreach, but many more are really looking forward to that.

So it is moving from an optical fiber contract to an optical fiber cable contract. That would be the right way to [indiscernible]

It's actually going even beyond the cable to this Opticonn offering. So we are actually talking to our customers on a TCO basis. For example, in the U.K., we're talking to our customers about our cost to home pass -- cost per home pass and we're giving them an end-to-end solution for looking at a lower TCO for that. So that's the conversation and that's our sale to customers going forward.

Mihir, would you like to talk about the CapEx that Neerav spoke about and the margins looking forward?

Indeed. Indeed. Neerav, so our CapEx with the new plan that we had to increase the cable capacity, we believe that a large part of the cash flow will come next year. So this year in FY '22, we expect the CapEx to be around INR 500 crores, which is slightly up from what we had indicated before we made this plan to expand capacity. But next year, we may have around INR 250 crores of CapEx payout, is what we currently expect.

So the current INR 500 crores is about -- the end of -- the balance of our cable expansion up to 33 million. And so if you could give us a breakup in terms of 33 million and -- 32 million to 42 million?

So the way we are looking at this is about INR 200 crores -- approximately INR 200 crore is the additional CapEx because of this additional capacity. The rest is what we had already planned, and which is the current CapEx cash flow that will go up. So we had mentioned about INR 400 crore to INR 450 crore so far. And now that goes up spread into 2 years, as I had mentioned earlier, to around INR 500 crores and about INR 250 crore in the subsequent year.

Got that. Got that. And on the EBITDA...

So regarding EBITDA, so the way that we see it, of course, there are many factors at play and some working in the same direction, some working each other when we talk about the global markets, there are the realization benefits, pricing benefit, we have costs issues, cost -- higher costs in some cases but not necessarily. All put together, I think what we believe is we will be stable at about 17% to 18% EBITDA margin blended. And that too largely because we are consciously investing in R&D. R&D is almost 3% of our revenues now, and we are passing through all of that through the P&L anyway. So that's the reason we will be around 17%. The rest of the factors that you alluded to, that you mentioned will kind of blend into this outcome.

[Operator Instructions] The next question, we'll take from Mr. Mukul Garg.

First of all, Anand, many thanks for doing this meet. It is a very, very well-organized meet with -- we heard from more the senior management for the first time. So thanks a lot for that. Coming to the questions, the first on the cable expansion and investment in U.K. and U.S. While we understand there is a clear opportunity in both the markets, it is probably easier to justify the expansion in the U.K. given that you already have new orders there. Do you have similar Tier 1 orders in U.S. already, which support the local expansion? Or is this more of an upfront investment in the anticipation that the spend is picking up and you can capture on that? And, Mihir, if you can just also share the respective capacities in both the countries and whether the tickets include greenfield land investment also? Or do you already have places where you have taken onboard in U.S. and U.K.?

Yes. Thanks, Mukul, for the complement. I'll again request Ankit, if you can talk about the cable expansion U.S. Tier 1. And you can also talk about how we are doing it the greenfield versus...

Sure. Okay. So yes, thanks, Mukul, for the question. Absolutely, as you mentioned, these 2 focus areas, both the U.S. and the U.K., as we talked about, the demand is very clearly there. We actually have very strong commitment and interest in both places. And that's given us this clear commitment from our side that we should be going forward. We have actively in the U.K. -- I talked about a couple of our customers, like Openreach, Netomnia in our sights. Similarly in the U.S., we are actively in conversations and actively doing business with customers like Windstream and TruVista. Just to give an example, TruVista is a very interesting partner of ours who is already helping us provide and support the U.S. ad hoc program, which is a rural development of our broadband. So these are just examples of business that we actively have, Steve Szymanski, who you heard from earlier, has been actively promoting STL in the market. We've been getting very good traction from Tier 2 and now increasingly the Tier 1 customers. And all of them really looking at as they're doing multiyear buildouts, how does STL provide a unique solution to them that they cannot get currently from their suppliers.

Sure. Mihir, on the respective CapEx and capacity in other countries?

Yes. So the capacity is U.S. through U.K. would be -- so because the total we are looking to add is 9 million fkm and it would be about 55% to 60% of that in the U.S. and the rest in the U.K. broadly is how we see it right now.

Sure. And secondly, Anand, again, while all the areas you predicted today are attractive and massive in their own rights, is there a risk of you taking on too much on your plate by expanding at the same time, Jio industry as well as technologically, at the same time. So the question is that, a, how do you kind of risk off these investments, which are kind of coming at the same time? And, b, which among these do you see as a relatively lower hanging fruit and this will require a little more handholding from your side?

Very, very relevant and important question, Mukul. And we keep debating that -- this all the time. And the areas, if you think about it, there are 3 industries in which we are sort of -- or rather 3 capabilities, which we are co-building, but they are in different stages. And our investment and our focus and our go-to-market is related with the maturity for each of the businesses that we have. On the optical business, we are extremely global, almost 70% to 75% of the revenues come from global. And we are just doing -- expanding both the portfolio as well as the global reach. And we are very clearly moving on the strategy, which is essentially there towards doing that. System integration business for the last 7, 8 years, we created capabilities in India across all the spectrum from smart cities to rural broadband, to army and navy, to telco network. And we are taking that in a very focused manner to U.K. where we already have data center capabilities. And wireless 5G business is in its stage of infancy. And that's where we are putting in capital, all largely organic capital in terms of developing the right product ecosystem. So there is a strategic element to it. There is a management bandwidth element to it and there is a capital element to it. And we are making sure that each of that is appropriately balanced for us to make sure that we don't open too many fronts. But all this is converging towards the customers and the networks that we wish to operate. Mukul, the entire focus that we are doing is to move much higher on the value chain. Instead of selling individual fiber or cable or radio, we are now providing this end-to-end network through the solutions that Badri spoke about. And that's the clear endeavor. While these look like individual businesses for the customer, they start converging as a full network towards fiber to the extent network towards the 5G network. And that's the focus that we are moving towards.

If I may just ask one more clarification question and with your plan to expand your cable capacity, I think we are now entering another CapEx cycle on the fiber side, which you guys indicated that like this is a new 10-year movement, which is starting off. Isn't the new demand a little bit lower than the capacity, which is coming up? You mentioned 100 million over the next 4 to 5 years. And in your view, what is the learning, which ecosystem players have taken from the oversupply scenario we have just exited from?

Yes. So clearly, the oversupply scenario -- I mean the supply as you are fully aware, it is controlled through the preform route. And we do not see anybody investing on the preform side. And we believe the supply-demand situation is clearly, clearly well matched right now where the lead times are also increasing globally right now. So our focus is we have invested on the fiber side. We have invested in the preform side, which is where the technology is, which is more capital intensive, and which is what takes time for it to come up. So I think from a timing perspective, we did great in terms of investing ahead of the cycle on the fiber side. Cable is a downstream investment, and we keep adding that as we see the market evolving. And I believe within the next 3 to 4 quarters, our increased -- our 33 million capacity is already in play and our 42 million will start coming in 3 to 4 quarters from now. So we are balancing both the parts but staying true and core to our strategy. And we do not believe at least that there is anybody who's putting serious preform capacities, which is -- at sometimes create these industry demand-supply mismatches.

We will now take the next question from the line of Mr. Pranav Kshatriya.

A few of my questions have been answered. I have only one question. If I look at more from a 4 and/or 5G space, where you are really trying to engage with most of the operators, what do you think will be the right to win? Because if I look at what you're talking about, you have one radio platform, then you have developed something on the hardware side, you have [ OSS ], which is more of a -- it's a product software stack in the sense. And then you're talking about system integration. Now given a lot of telcos have already engaged with large system integrators like Tech Mahindra and other players like that, what do you think is the niche or the capabilities, which Sterlite brings to the table to have a role in this? So that's my question.

Another great question, Pranav. I'll request Chris, who has spearheaded this movement over the last several years in AT&T and now with us, to answer this.

Yes, sure. Thanks, Anand. Yes, thanks for the question. So I think one of the things is there's a big -- I just want to make sure we understand, there's a big difference between kind of what a lot of the system integrators do today for the telcos, which is really more on the OSS, BSS, what I'll call the IT stack side versus the network side because classically, that had been done by the traditional OEMs. And now with ORAN or Open RAN, there's a need for somebody who not only can build the components that go with this, it's disaggregation that we're talking about, but it also knows how to stitch them together and can create the partnerships to do that so that when we come back into the telcos, we come back in as an integrated unit. And so I think our right to win is obviously, we're going to be a scaled player in the areas that you saw there, in the radio area as well as the software area. We're going to partner with the right people to provide these end-to-end solutions and the system integration that we described. And we're going to differentiate ourselves along those 5 dimensions that I mentioned, right, size, cost, power, operability and deployability. And we believe with those kind of fundamental capabilities and I'll give a little nod out to Sandip and his team, remember, we already have distribution that a lot of the other folks would love to have, thanks to our other businesses. And so I think if you take all those things into account, we have a really good chance for that right to win as you asked.

Okay. And if I just have a small follow-up -- I mean, what is more important in this business to get more -- is it the right partnership in the minds of the like of the Mavenirs and Altiostars of the world or more direct connect with the customers like the BTs and other telecom operators? What really gives you the foot in the door for this business?

Well, I mean, which child do you like better? So I think the answer is, if I had to pick one, it's certainly the telcos and the relationships with the telcos. But I think because of those, we can actually garner a lot of those relationships. And I don't think we're successful to look. We're not successful unless we actually have those relationships that can provide that end-to-end capability. But it clearly starts with television, our distribution helps us a lot with that.

You -- I mean, in the Q4 presentation, you did talk about one of the partnership. Any more color you can share on that?

Yes. Look, Pranav, if you recall, Chris showed the chart with various partnerships that we are gradually -- we have partnerships on the [indiscernible] investment with the Xilinx on the chip side. So this continues to grow. 5G is clearly an ecosystem play. You spoke about Mavenir and Altiostar, there were interoperability partners for some of the telcos that we are moving forward. So it's just a continued way for us to move forward.

Yes, sorry, maybe I didn't undertake -- talking about a previous one we've done that I wasn't a part of, but I think everything on and said there, but if you're asking, is that complete? Or do we not plan any others? We certainly plan to have others, but none we're ready to announce right now.

We'll now take the next question from the line of Mr. Vipul Kumar Shah.

So sir my question is whether this capacity addition of cable from 33 million to 42 million will be in U.S. and U.K. only or it will be in India also?

It's going to be largely in U.S. and U.K. right now. So India, we have created scale capacity. So this is more about being closer to the market.

Anand, we'll take some questions from the chat, which have come. So first question is that -- from Mr. [ Mangesh Kulkarni ], how do you view impact on our business from technologies like space-based Internet services?

Badri is our expert. Badri, would you like to talk about the impact of space on our terrestrial technologies?

Sure. Sure. Okay. So this one is a popular question that comes up quite frequently. So the lower orbit pathologies that are currently a lot of -- attracting a lot of attention are interesting, both from an academic perspective and the feasibility of a proof-of-concept perspective. But there's certain 2 or 3 fundamental physics limitations that prevent it from becoming a seriously scalable alternative to what we know and believe in and recognize today, which is fiber-based connectivity, whether it is mobile or residential or extraterrestrial. So there is physics part . The second is some of the statistics, if you get into the details, a large part of the earth is uninhabited, the oceans and the polar land masses and stuff like that, right? So unfortunately, for lower orbit satellite, you have to have connectivity across -- you have to be moving and cover the entire globe for the entire -- for that capacity to be dimensioned and utilized. So this is kind of a bit of a chicken and egg problem for LEO Technologies. Because if we don't do that, then it's different from Jio, which is you stay in one place and cover large area. Here, you have to keep moving and build lots of constellations. And every time a satellite fails, you have to [ react differently ]. So there are some driven costs to this. But yes, I mean, we are watching it very closely. We don't see it as a fact, but in fact, it could be a pretty good supplement to ground stations in rural -- connecting our rural and less densely served populations, and it could be a pretty good connectivity layer that sits on top of a robust fiber user. I hope that answer your questions. Let me [indiscernible]

Clearly, I think, what Badri is referring is that the 3 billion people, which are unconnected, satellite will provide a complementary connectivity and capabilities to all of that. But currently, both from physics and from economics perspective, the high amount of data, which is required will not be transmitted via satellite, but it will be done via down stations, which will be connected by an alternate technology like fiber. So from that perspective, it is great that more people will be coming and the digital divide will decrease. And from a business perspective, it starts making a lot of sense that the ground stations will -- just like you have the -- today, cell towers connected with an alternate technology like fiber, we believe the ground station staff as they start transmitting more data would be connected with technology like fiber.

Thank you so much, Badri and Anand. I hope that answers [ Mangesh ]. Anand, we'll take another question from the chat and this has come from [ Payal ]. She is asking, it would be really helpful if you could elaborate more on the PoC completion that took place with Chunghwa Telecom? How do you foresee this opportunity?

Chris, would you like to talk about this FTTx with Chunghwa?

Sure, sure. So I'll be glad to talk about it at a high level. So yes, Chunghwa Telecom basically took our solution that we described today, what we call the [indiscernible] FTTx, which is that disaggregated solution, software based for fiber to the home. Now the difference is that what they were looking at wasn't the standard GPON, it was what's called XGSPON and the X stands for 10 and the G stands for gigabit. So this is a 10-gigabit symmetrical PON. That's our product. And at least as my old boss here in the United States is to say, you got to skate as hockey players skate to where the puck is going to be, not where it is. And that's kind of where we're looking to do with this XGSPON is moved to where all the other folks are going in the next few years. And so we participated in that where -- I can't go into all the details, but we were very pleased with the results as was the folks at Chunghwa Telecom. So we look forward to the opportunity to serve them in the future.

And I can just add, [ Payal ] the fact what Ankit spoke about, the fact that now our system is becoming fiber and interconnect, and we are adding these end equipments, which are disaggregated that Chris was talking about 10-gigabit transmission equipment, both the optical line terminal as well as the networking unit. This is the -- what Chunghwa is doing is connecting enterprises in Taiwan with 10 gigabits per solution. So our Opticonn with this programmable FTTx goes together, and we then start providing FTTx to small cells, to enterprises, to homes to data centers. And that's the capability which integrates for us to move forward. And then that's the integration, while each piece is being created as a customer, it's getting integrated more and more as a combined solution.

Thank you, Anand and Chris. [ Payal ], I hope that answers this question. We'll take a couple of more questions from the chat. So one question that has come from Neerav Dalal is, how do you see revenue share move at $100 billion between access networks and optical? And going ahead in the next 5 years, how do you see this change?

Mihir, what does your model say?

So I think that models are models, but I think given that our current businesses are also growing at a very, very healthy pace, at the $100 billion level, we will have access solutions, in absolute sense, a reasonable chunk. But relative to our current business, it will be still small. We said in the past we'll give you about 5% of the $100 billion objective that we've said. And I think we will -- we believe that, that will be the range in which we access solutions. As we grow further, it's really difficult to comment right now of what the mix will be. I know for the fact that the absolute numbers will grow phenomenally in access solutions. But given that the other businesses are also growing very fast, I don't want to comment on any significant swings of percentage or proportions on any of these businesses.

And Chris will definitely want to make sure that it doesn't stay at 5%. It becomes a significant...

You got that, right?

Yes. I think, Neerav, I hope that answers. Maybe we'll take a last couple of questions. So one, we will take from the line of Mr. Tejas Sheth, you can ask your question now.

Great set of presentation. I mean, it's quite interesting that Board member has been there and explaining us the ESG side of the business, which is gaining a lot of popularity nowadays. My question is on the margin side. When we are moving up the value chain in the product side and the fiber prices globally, it seems to have bottomed out. Why the margin guidance, which used to be in 18% to 20% range, is moving down to 17% to 18% range? Considering that the recently asked question on the product mix also doesn't really look unfavorable going ahead, what is the reason [indiscernible]?

Should I take it?

Yes.

Thanks for the question, Tejas. So there are a couple of elements here. One is the R&D which is the main driver for the margin. So as I mentioned earlier in one of the -- in response to one of the earlier questions, our R&D expenditure, which all passes through the P&L has -- is almost at a number of 3% in certain quarters. So if we correct for that, you clearly see that the margin without that is higher. This R&D was much lower as you may know, in the past that we were spending as a percentage of revenue. So to us, it's important to continue to invest so that we remain ahead even if we did at the cost of 100 bps of margin, we are okay with that. And that is what is the main driver of the margins going down or going down by just about 100 bps or so.

Okay. So my always understanding is that R&D spend is always towards higher-value products and hence, will be always margin accretive if at all, not margin destructive. So that would be my understanding. My second question is, Anand, how sooner we see some breakthrough happening on the ORAN side of our access solutions business?

Sure. So, Tejas, clearly, we are in -- as Mihir talked about on the investment front, we are aggressively moving on the R&D side. And clearly, you're absolutely right that R&D will generate value, you're seeing a timing impact of it. And as we move forward, we will definitely come back to the guidance or maybe do better than that. On the ORAN front, I think Chris wanted to talk about the breakthrough. So please Chris, go ahead.

No. I mean, I think you saw in my slide that we have some wins already, which is really good because currently, we have one product, that carrier class WiFi 6 product, that is GA. The Garuda is coming up as well as GA. And then there are a couple more on the, let's say, the large macro side radios that are coming up as is some of the other products there. So you're going to see -- we don't preannounce them here, but we're going to see a series of GA products that will come out over the next year and certainly before the year. But I mean, during the next year, you'll see a series of products that will come out. And then as those become GA with our distribution, you'll see some more significant wins that we'll be able to talk about.

Okay. Generally...

Yes, sorry about that.

Yes. We have already shipped WiFi 6. And as Chris hinted, we will be starting to ship macro radio in H2 of this year. So clearly, the product pipeline has now moved to deliveries.

Due to paucity of time, maybe we will take only last question. And this question is from [ Rushik Bhatt ], and this question is directed to hear you that high cost of commodities, especially copper, will it impact margins?

No, the impact of copper prices has almost negligible 0 impact on our margin. It does move the needle at all. So it doesn't impact our business.

So we don't see any corporate all hardly.

Thanks, Mihir. Due to paucity of time, I think we have come to the close of Q&A session. I now hand it over back to Dr. Anand Agarwal for closing remarks.

Yes. I would really, really like to thank everyone for attending our Investor Day STLescope 2021 and spending the last 2.5 hours with us. And showing great interest in our company with the excellent questions that we saw. And I really hope that we were able to address and clarify all your queries and comments. For any further questions and discussions, you can feel free to contact our Investor Relations team, which includes myself and Mihir and the extended leadership team. And we really look forward to continuing the conversation with you in the future. Thank you and have a great day.

Thank you.

Thank you.

Thank you.

Thank you so much.