SATYAM INFOWAY LTD: SEC Form: F-1/A Filing Date: 2/16/00-(Highlights)
PROSPECTUS SUBJECT TO COMPLETION, DATED FEBRUARY 16, 2000
3,000,000 American Depositary Shares
[SATYAM LOGO]
SATYAM INFOWAY LIMITED
Representing 750,000 Equity Shares
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Satyam Infoway Limited is offering up to 3,000,000 American Depositary
Shares, or ADSs, of Satyam Infoway outside India, including in the United
States. This prospectus relates to an offering by the U.S. underwriters of up
to 1,800,000 ADSs in the United States and Canada. Additional underwriters are
offering up to 1,200,000 ADSs outside the United States and Canada. The
combined offering will not exceed $150 million, including the underwriters'
overallotment option. Each ADS represents one-fourth of one equity share. Our
ADSs are listed for trading on the Nasdaq National Market under the symbol
"SIFY." On February 15, 2000, the last reported sale price of our ADSs was
$68.00 per ADS.
Our Business
We are the second largest national provider of Internet access and Internet
services to consumers and businesses in India, based on number of customers as
of December 31, 1999. Our customers primarily use our services to communicate,
transmit and share information, access on-line content and conduct business
remotely using our private data network or the Internet. Our Internet and
network services include the following:
. Consumer Internet Access Services. We offer dial-up Internet access, e-
mail and web page hosting to consumers in India through convenient on-
line registration and user-friendly software. In November 1998 after the
deregulation of the Internet service provider market in India, we
launched our Internet service provider business and became the first
private Internet service provider in India. The largest national Internet
service provider is VSNL, which is majority controlled by the Indian
government.
. On-line Portal and Content Offerings. We operate an on-line portal,
satyamonline.com, that functions as a principal entry point and gateway
for accessing the Internet by providing useful web-related services and
links. We also offer related content sites specifically tailored to
Indian interests worldwide for news, personal finance, movies, music and
automobiles. In November 1999, we acquired 24.5%, and an option to
acquire the remaining 75.5%, of the outstanding shares of IndiaWorld
Communications Private Limited, a leading provider of Internet content
and services in India. We have recently formed alliances with a number of
partners, including ICICI Bank, Citibank and Bank of Madura, to offer
banking products through satyamonline.com and to develop payment gateways
to facilitate electronic commerce and other activities through our
websites. During January 2000, our eight websites generated approximately
19 million page views and IndiaWorld Communications' 13 websites
generated approximately 18 million page views. Upon completion of our
acquisition of IndiaWorld Communications, we estimate that the aggregate
number of page views generated by our 21 websites will be less than the
combined number of page views of our and IndiaWorld Communications'
websites immediately prior to completion of the acquisition.
. Corporate Network and Technology Services. We offer dial-up and dedicated
Internet access, private network services, business-to-business
electronic commerce solutions and website development and hosting
services to businesses in India. Initiated in April 1998, our corporate
network and technology services division has formed strategic
partnerships with a number of leading technology and electronic commerce
companies, including UUNet Technologies, Inc. (formerly CompuServe
Network Services), Sterling Commerce and Open Market.
Our Customers
As of January 31, 2000, we had more than 129,000 consumer Internet access
subscribers and more than 350 corporate customers. Our corporate network and
technology services customers are in a variety of industries, including
financial services, publishing, retail, shipping and manufacturing. Our five
largest corporate customers based on revenue for the nine months ended December
31, 1999 were Carborandum
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Universal Limited, CDC Advisors Private Limited, Gray Cell, IBP Co. Limited and
Stock Holding Corporation of India Limited. The customers listed above
accounted for approximately 17% of our corporate network and technology
services division revenues in the nine months ended December 31, 1999.
Our Network
We currently operate India's largest national private data network utilizing
Internet protocol, which is an Internet industry standard for tracking Internet
addresses, routing outgoing messages and recognizing incoming messages. We own
and operate points of presence in 34 of the largest metropolitan areas in
India. Points of presence are telecommunications facilities located in a
particular market which allow our customers to connect to the Internet through
a local telephone call. We plan to have points of presence in 40 cities in
India by April 2000, which we believe will allow us to provide Internet access
service via a local telephone call to approximately 85% of the installed
personal computer base in India. Our private network infrastructure provides
the platform for national delivery of Internet access to consumers as well as
the backbone for our broad range of corporate network and technology services.
For example, our network provides an alternative to government telecom
providers for corporations that wish to establish virtual private networks,
which provide secure transmission of data using Internet protocol over our
private network infrastructure, and electronic data interchanges. Our Internet
service provider license permits us to establish and maintain our own direct
international Internet connections via satellite links or transoceanic cable
systems as an alternative to government-provided Internet gateways. We believe
that as the size and capacity of our network infrastructure grows, its large
scale and national coverage will create economies of scale for us and barriers
to entry for our competitors.
Our Market Opportunity
The market for Internet access and electronic commerce, both worldwide and
in India, is expanding rapidly. For example, International Data Corporation
estimates:
. the installed personal and network computer base in India will grow at a
rate that averages 44% annually from 1.9 million in 1998 to 8.2 million
in 2002;
. Internet users in India will grow at a rate that averages 94% annually
from 0.5 million in 1998 to 6.6 million in 2002; and
. Internet commerce revenues in India will grow at a rate that averages
261% annually from $3.0 million in 1998 to $499 million in 2002.
Internet usage is expected to grow rapidly in the Indian market as
deregulation continues, network bandwidth becomes less expensive, the installed
base of personal and network computers increases, alternative Internet-access
devices become available and Internet connectivity becomes increasingly
important for on-line news and content and electronic commerce transactions. We
believe that our company is well positioned to take advantage of this
significant market opportunity in India. The market in India is, however,
presently at a very early stage of development and involves significant
business, competitive and other risks.
Our Growth Strategy
Our goal is to become the premier provider of Internet access, on-line
content and network services to consumers and businesses in India. Our
principal business strategies to accomplish this objective are:
. Increase penetration in our existing markets by expanding awareness of
the Satyam Online brand name to capitalize on our first mover advantage
in India;
. Expand our products and services with new technologies to enable our
customers to use the Internet more effectively;
. Strengthen our Internet portal and other Internet content websites with
more content tailored to Indian interests worldwide, such as the content
we expect to obtain in our acquisition of IndiaWorld Communications;
. Increase our range of electronic commerce services to build our online
presence and pursue additional revenue opportunities;
. Expand customer distribution channels through strategic partnerships to
take advantage of the sales and marketing capabilities of our strategic
partners;
. Invest in the continued enhancement and expansion of our network
infrastructure to support customer growth, enter new markets and
accommodate increased customer usage; and
. Pursue selective strategic investments, partnerships and acquisitions to
expand our customer base, increase utilization of our network and add new
technologies to our product mix.
Recent Developments
Additional Partners. In November and December 1999, we entered into
memoranda of understanding to form joint ventures with a number of partners,
including the following:
. ICICI Bank. We formed a strategic alliance with ICICI Bank to offer
online savings accounts, electronic bill payment and other retail banking
products and services over the Internet.
. Bank of Madura. We formed a strategic alliance with Bank of Madura to
develop an electronic commerce portal offering products and services to
Indians living abroad.
. Citibank. We formed a strategic alliance with Citibank to develop a
secure payment gateway for business to consumer transactions.
. RPG Netcom. We formed a strategic alliance with RPG Netcom to develop
broadband Internet services to consumers and businesses over RPG Netcom's
cable television network in Calcutta.
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(PS:SIFY/RPG NeCom Joint Venture is expected to be operational by April,2000 thus enabling the company to provide internet service via CableTV. RPG currently has 600,000 cable subscribers in Calcutta and surrounding areas.) |
