Sify Technologies Ltd. Reports Third-Quarter Results

Financial Highlights: - Sify's total operating earnings were at US$ 38.72 million in the third quarter 2010-11. - EBITDA is at US$ 2.13 million vis-a-vis US$ 1.21 million in the previous quarter. Previous year third quarter EBITDA was at US$ 1.17 million. - Afterwards substantial depreciation and interest, the net loss for the quarter was at US$ 2.09 million. - Capital infusion of US$ 21.7 million while this quarter. - Cash generated from operations for the last nine months was at US$ 3.56 million

Mr. Raju Vegesna, Promoter & CMD, said, "Though we have seen a sharpdrop in bandwidth prices in the market, our enterprise business has shownresilience by taking a pro-active approach to protect margins. We arecommitted to monetizing our investments in EIG in accordance with-sea cable, commissioningthe Noida Data Center in the then and there fiscal year and expanding our network.Managed Services Practice in our Infrastructure Management Business iswitnessing satisfactory growth. The Consumer business is transiting to a morescalable model to support healthy earnings with emphasis on delivery of ValueAdded Services on the Cloud platform." He furthermore added, "Our focus willalways be healthy revenue growth with continued focus on cost management.This will be a continuous process."

Mr. CVS Suri, Chief Operating Officer, said, "We see process improvementsand revenue productivity making an impact on our bottom-line and have alignedall the teams in this endeavor. We have rolled out a new PerformanceManagement System and a new Procurement system which enables us to leverageuntapped potential and accelerate realization of the benefits of costoptimization efforts underway. We have as well aligned the organizationstructure to the needs of the market for better revenue growth."

Mr. MP Vijay Kumar, Chief Financial Officer, said, "Relentless focus onhygiene has enabled us to sustain a positive EBITDA over the last fewquarters and shown a healthy growth this quarter. The Promoters have inresponse to their subscription to the capital of US$ 86 million, alreadyinfused capital of US$21.7 million. The infusion of capital has improved ourliquidity position and will help us to fund our Data Center and Networkexpansion. Consequent to the on-going changes in the consumer business model,we will review productivity of related assets."

Unaudited Consolidated income statement as per IFRS Description Quarter ended Quarter ended Quarter ended December December September 2010 2009 2010 Unaudited Audited Unaudited Enterprise 31.73 31.00 31.43 Consumer 2.77 4.31 3.04 Others 4.22 3.20 3.84 Revenue 38.72 38.51 38.31 Cost of Earnings Selling, General and Administrative Expenses EBIDTA 2.13 1.17 1.21 Depreciation and Amortisation expensese Net Finance Expenses Other Income 0.44 13.42 0.45 Share of Affiliates 0.62 0.63 0.74 Profit / Earlier tax 9.25 Income Taxes - - - Profit / for the period 9.25 Business Highlights ENTERPRISE BUSINESS

Sify's Enterprise business has successfully added large enterprisecustomers to all its business verticals. Riding on the back of growing demandfor Cloud and Data Centre services and backed by alliances with some of theindustry's leading players, Sify consolidated its position as a leadingManaged Services Provider.

Also, Network-to-network-interface with new telecom services providershelps us in offering our Bandwidth and RF last mile services. This uniqueproposition has helped Sify to provide last mile to other Telecom ServiceProviders for their clients.

The Call centre

Sify has launched Express Night Connect services on Internet to addressthe growing needs of the Call centre and BPO market.

Hosting business has grown by 26.35 % over the same quarter previousyear. Sify has become a dominant Cloud Services Provider in the Indianmarket. This has helped Sify win many contracts. The customer contractsinclude IaaS( Infrastructure as Service) i.e. On demand Compute, On demandStorage and managed services. Existing clients have as well scaled up theircapacities.

Sify's continued alliances with industry leaders has come in handy onlarge bids for connectivity and hosting business prospects. The strongalliances have as well helped Sify offer Cloud based services to the businesspartners of the Industry leaders like HP. Sify's collaboration withIndependent Software Vendor communities to host applications on the CloudPlatform is beginning to take concrete form.

Business Volume of International long distancebusiness has grown by a little over 10 % this quarterover the previous quarter and the revenue grew by around 6%. Traffic volumein Hubbing has gone up by 29% during the revenue has gone up by 23%.

We have just bagged the business for an expanded scope of services from aglobal player. To furthermore such business, we have signed up a couple ofbusiness associates to help expand the same.

The active SMB market segmentthrough partnerships

Our new strategies will include addressing the active SMB market segmentthrough partnerships, focusing on business associates program to reach out tonew clients and leveraging Sify's cloud capability to build niche cloudservices.

3 new Accounts have been added - two from the Industrial Componentssector and one from a Development Agency. Sustained Q-on-Q growth withincreased demand from existing clients as so then as newer accounts is thedriver. Strategic focus on new customer build-up has resulted in reducedConcentration risk with share of Top 2 clients at 20% of total revenue forthe Quarter.

The Chinese market

Sify has successfully piloted new innovation-based learning products withour local partner in the Chinese market. This will help us increase tractionfor our services in this region in the coming fiscal

Spending by brand advertisers on our portals is beginning to improve.Advertising earnings increased by 30% over last quarter. Comparatively, therise over the same period last year was a modest 8%

The benefit of pinning all properties ofSify

Windows 7 users can now enjoy the benefit of pinning all properties ofSify.com onto their taskbar and browsing them seamlessly via Jumplists.

With our wireless broadband implementation picking up steam, a specialoffer was launched in Tambaram. Christened "DoubleDelicious Pongal Offer", any new customer taking a broadband connection inTambaram gets speeds of 512 kbps for the price of 256 kbps.

Different segment

To extend our VoIP (Voice over Internet Protocol) strategy to a different segment, Sify Talk, a VoIP (Voice over Internet Protocol)service, targeted at internet cafes and PCOswas launched on October 2010. This follows the launch of Sify talk servicesto Small and Medium Businesses and Small Office/Home Officebusinesses.

To promote online transactions and to aid our clients adopt online modeof payments, we launched a below-the-line campaign for existing broadbandcustomers. This has helped us push online renewals from 6% to over 10% of thetotal renewals.

Comprehensive Browser based Forum Distribution Management System. BothPrincipal and Distributor operate over the internet; application can behosted at Sify or at the Client's data center. Another focus is on buildingMiddleware for integrating with Principal ERP.

The largest Managed Enterprise

Sify is among the largest Managed Enterprise and Consumer InternetServices companies in India, offering end-to-end solutions with acomprehensive range of products delivered over a common telecom data networkinfrastructure reaching more than 600 cities and towns in India.

A significant part of the company's revenue is derived from CorporateServices, which include corporate connectivity, network and communicationssolutions, security, network management services, enterprise applications andhosting. Sify is a recognized ISO 9001:2008 certified service provider fornetwork operations, data center operations and customer support, and forprovisioning of VPNs, Internet bandwidth, VoIP solutions and integratedsecurity solutions, and ISO / IEC 20000 - 1:2005 certified for Internet DataCenter operations. Sify has licenses to operate NLDand ILD services and offers VoIP back haul tolong distance subscriber telephony services. The company is India's firstenterprise managed services provider to launch a Security Operations Center(SOC) to deliver managed security services. A host of blue chip clients useSify's corporate service offerings.

The specialized domains ofeLearning Services

Sify as well caters to global markets in the specialized domains ofeLearning Services and Remote Infrastructure Management Services. TheeLearning Services designs, develops and delivers state-of-the-art digitallearning solutions for non-profit, for-profit organizations and governmentalorganizations in the fields of Information research, engineering,environment, healthcare, education and finance. The Remote InfrastructureManagement Services provides dependable and economical solutions aroundmanaged services, hosting and monitoring.

Consumer services include broadband home access and the ePort cyber cafechain across more than 200 cities and towns in India. Sify.com, the popularconsumer portal, has channels on news, entertainment, finance, sports, gamesand shopping. Samachar.com is the popular portal aimed at non-residentIndians around the globe. The site's content is available in 8 Indianlanguages, which include Hindi, Malayalam, Telugu, Kannada and Tamil, Punjabiand Gujarati should the contingency arise to English.

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