How SugarBox Is Making Internet Faster, Cheaper & More Accessible
SugarBox started with a simple objective – to make digital as seamless as TV.
Founded in 2016, SugarBox is a Content Distribution Network that makes internet access faster and cheaper for the masses. The platform is also extending the reach of internet to places where it has struggled to reach before.
In an interaction with The Quint, CEO and Co-founder Rohit Paranjpe tells us how the company came into being, the problems it solves, their future plans and more. Read on!
#1 What inspired you to found SugarBox? And once you had the idea, how did it take full shape?
I’ll take you back to 2014 when I was running an OTT service in India. We tied up with brands that had a large consumer footprint. This way, the consumer could access the OTT service free for at least a period of time. To give you an example, users that bought Nokia Lumia phones got a 3-12 month free subscription of the OTT service dependent on the handset model. Back then, we also used to receive a lot of user complaints. One day, we decided to dig through the logs and realised that the complaints were largely in two buckets. The first was where the consumer would say that the service is not working, but in reality, their internet connection wasn’t. The second type of complaint was rather unique – users would ask us that if the OTT service was really free why their data was getting consumed. On introspection, we found that these were consumers that were transitioning from TV. When it comes to TV, once you’ve paid a particular amount, you can switch it on at any time and it just works. When such consumers come to the digital side, things get tricky as they have to pay for multiple things (device, content from different platforms) and there’s still no guarantee that it will work.
SugarBox started with a really simple objective – to make digital as seamless as TV. While thinking of how we could do this, we found a semblance of a solution in what Jet Airways was doing – install an offline content box and then expose it to a user over a local Wi-Fi network that the user can then access over a mobile app / web browser. The plan was to put a similar box in different public places where people typically struggle with internet problems. That is really what SugarBox was in 2016. We realised that we needed a broadcaster to back this up if it is to be deployed across the length and breadth of the country. We started reaching out to broadcasters and that’s when the Zee acquisition happened. When we actually sat down to execute it in 2017, we realised that although we were getting short-term traction, we would struggle with this approach in the long run due to fragmentation for users. We thought that instead of building an independent platform, what if we took an existing internet app and made it work using this box. This is when we turned to the ZEE5 app that was being built at that time. We felt that we will be able to do it in 3 months, but it took us close to 3 years. Over the years, we have gone from becoming a basic offline content box to something that’s unique and adds to value to consumers, apps / web services, internet service providers and the ecosystem as a whole.
#2 How do you look at the issue of fluctuating internet connectivity?
I have a contrarian view here. The problem is not with internet connectivity, but in the economics. Internet too is a business and until it’s not profitable, it doesn’t make sense. The only way an Internet Service Provider (ISP) makes money today depends on the number of subscribers times Average Revenue Per User (ARPU). Go to any metropolitan city and an ISP can blindly deploy infrastructure and if not immediately, in a year the unit economics will make sense. But the same can’t be said in case of villages because their population density is sparse and the affordability index is significantly lower. So like I said, the problem is not with respect to technology.
#3 In layman terms, please tell us how SugarBox works. What really does a CDN do and How does it solve the network troubles that people face in public places?
The digital world is not built out of thin air. Let me explain this to you in the context of the physical world. Let’s assume there’s a swanky start-up in California that makes laptop bags, and you want to order one sitting in Mumbai. If you place an order, it will probably take you about 30 days to reach and cost you Rs 1000 for shipping. Now, let’s say you also order a bag from a well-recognised global brand. This reaches you in 3 days and costs you just Rs 35 in shipping. Why does such a large gap in terms of speed and cost exist? That’s because the start-up doesn’t have a distribution network comprising multiple warehouses in India. This is exactly how a Content Distribution Network (CDN) works in the digital world. Just like there are warehouses in the real world, CDNs build digital warehouses for the internet.
CDNs have existed for the last 30 years and have played a pivotal role in the reach and scalability of the internet. The problem today exists on the internet last mile or internet connections that we as consumers purchase and to solve that, CDNs needs to evolve – that’s where SugarBox comes in. If I had to give you an analogy in the physical world – SugarBox is going to consumers (and places where consumers are accessing the internet) and setting up micro digital warehouses, that store data from apps and internet services, right in their premises, so that the speed of delivery is almost instantaneous and the cost of shipping is nonexistent.
#4 In a market like India, what is the disruptive potential of a hyperlocal CDN such as SugarBox? How does SugarBox fit in the larger scheme of things?
It’s not just about India, but something that’s relevant globally. Today, every GB of data that you and I consume, whether it’s on our phone or home Wi-Fi, is actually coming to us using a licensed internet pipe. Now, as SugarBox, if I’m able to put a CDN Edge in your house or building, I’m actually able to transfer data consumption from a licensed bandwidth to local bandwidth. That’s the first disruption we do. We reduce the cost of delivering 1 GB of data to the user.
Let’s talk about the second disruption. The way a CDN works is by charging different app providers to host and deliver their data to users. Now that we are sitting in your home Wi-Fi network, what is happening is we are delivering data directly to you. As a user, you’re not paying me, but I’m still earning money from the apps that you’re using. So, for the first time, on the last mile of the internet, SugarBox has figured out a way to monetise user consumption without being dependent on the number of subscribers times ARPU.
#5 Who would be the direct beneficiary of the SugarBox technology?
The direct beneficiary is the entire internet ecosystem. For the consumer, we do three critical things. We can assure the consumer that they are connected wherever SugarBox is available. The second is we fundamentally reduce the cost of delivering internet and the third most important part is we are extending the reach of the internet to places where it doesn’t exist now or is unable to reach today.
Other beneficiaries are ISPs, telcos and all other internet service providers. We’re able to declutter their networks by installing data caches across multiple tiers, going right down to an area level and optimising data flow within their entire network. Today, an ISP has two major problems with their network – coverage and capacity. We’re able to affect both problems, but can solve the capacity one far better than the coverage one. Most importantly though, whatever revenue we earn, we work in a cohesive and collaborative model with the ISPs. And finally, we add value to apps as well by helping them expand their user reach, reduce the total cost of app access for consumers and improve user experience and retention.
#6 Given the advent of 5G will boost internet speeds and bandwidth, how will it require hyperlocal services to adapt to it? And how would SugarBox build on these technologies?
We should not talk about 5G in isolation, but 5G, Wi-Fi 6 and satellite connectivity together. As SugarBox, we’re dependent on all of these technologies for backhaul (connectivity for our hyperlocal caches to connect with the cloud infrastructure). All the aforementioned technologies will essentially enhance the availability, the speed and the reliability of backhaul, in turn making the effectiveness and impact of SugarBox even greater.
#7 While Sugarbox provides seamless and fast connectivity in Places of Interest (POI) like trains, bus stands, malls etc, does the govt's plan of setting up public Wi-Fi hotspots come as competition?
One of the most unique disruptions that the SugarBox technology creates is that it is able to make the concept of public Wi-Fi profitable. The PM-WANI scheme is based on small-time retailers and SMEs setting up Wi-Fi hotspots across the country. However, public Wi-Fi hasn’t been profitable across any model worldwide. As a result, even with the waiver of AGRs, they are going to require stakeholders to collaborate with them to monetise and make the initiative profitable and sustainable. And this will be a huge opportunity for us (SugarBox) as we provide them with these unique solutions that will help them sustain and earn better.
#8 You have partnered with Chennai and Hyderabad metros, and also fulfilling a major necessity of rail travel by RailTel. Tell us more about it.
On a monthly basis, Indians spend 8-10 billion hours traveling. That’s a lot of time where users are stuck in one place and have nothing else to do other than burying themselves in their devices, and this is where networks don’t work. If we’re able to connect these dots, we can enable the entire digital ecosystem and add about 8-10 billion hours of digital consumption to it. There are multiple different use cases that come in here. You can help users play games, listen to music, order grocery online, book cabs and even upskill using ed-tech apps. This is essentially what we want to facilitate across all modes of public transport.
#9 Content on the go is something that would have changed during the lockdown. What are the trends or consumption patterns you’ve noticed?
Last year was representative of what people do when they are trapped in one place. Until today, no one ever had data on what happens when you put a person with seamless connectivity in a place where he has nothing to do. It happened to all of us in 2020. Those that had never watched OTT content, got on to it. People took to mobile gaming and social media like never before. We all had so much downtime that we actually choked the internet! And this is exactly what we envisage once we’re able to provide seamless connectivity in places where it isn’t available today.
#10 Are there any upcoming partnerships or future plans that you can tell us about?
Without getting into specifics, let me tell you that public transport is a major focus area for SugarBox in the short term. We will continue to capture the rest of the public transport market in India over the next 2-3 years. Along with metros and trains, we will also get into aircrafts, intercity buses and so on. To reach the next billion users, we plan to expand our services to villages and are already in the process of starting services in 100 villages by June 2021. We’re also looking at international collaborations in SAARC countries, followed by South-East Asia, North Africa and Latin America. With a view to making existing home internet connections faster, we have already started the ISP outreach program and today are doing a proof of concept across 100k homes in Mumbai and Goa. And of course, we are working on getting more apps integrated on the SugarBox CDN. And in the next 2 to 3 quarters will have a wide variety of OTT, Gaming, E-commerce, Ed-tech, Mobility, Fin-tech and Food-tech companies on the platform.
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