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Sify Limited (SIFY)

F1Q06 Earnings Conference Call

July 18, 2006 9:00 am ET

Executives

Raju Vegesna - Chairman

Durgesh Mehta - CFO

David Appasamy - Chief Communications Officer

Rahul Swarup - President of Enterprise Business

Pijush Das - President of Access Media Business

Surya Mantha - SVP of our Portal Business

Bibhu Kumar - Vice President of International Business

Schrip Neehan – IR

Analysts

George Mihalos - Gilford Securities

Sameet Sinha - Kauffman Brothers

Greg Wagner – Private Investor

Robin Ratouretnum – Sedna Capital

Madu Kadali – Fertile Mind Capital

Joel Cameron - Norberg Capital

Presentation

Operator

(Operator Instructions) It is now my pleasure to introduce your host, Ms. Schrip Neehan. Ms. Neehan, you may begin your conference.

Schrip Neehan

Thank you, operator. I would like to extend a warm welcome to all of our participants today on behalf of Sify Limited. I am joined on the call today by Mr. Raju Vegesna, Chairman, Sify Limited; and Durgesh Mehta, Chief Financial Officer of Sify Limited.

Following our comments on the results, there will be an opportunity for questions. If you do not have copy of our press release, please call me at the Global Consulting Group at 646-284-9418 and I will have one sent to you. Alternatively, you can obtain a copy of the release at the Investor Information section of the Company’s corporate website at www.sifycorp.com.

A replay of today’s call may be accessed by dialing in on the numbers provided in the press release, or by accessing the webcast in the Investor Information section of the Sify website.

Some of the financial measures referred to during this call and in the earnings release may include non-GAAP measures. A presentation of the most directly comparable financial measures calculated and presented in accordance with GAAP and a reconciliation of such non-GAAP measures on the differences between such non-GAAP measures and the most comparable financial measures calculated and presented in accordance with GAAP are also available on Sify’s website.

Before we continue I would like to point out certain statements contained in the earnings release and on this conference call are forward-looking statements rather than historical facts, that are subject to risk and uncertainties that could cause actual results to differ materially from those described.

With respect to such forward-looking statements the Company seeks protection afforded by the Private Securities Litigation Reform Act of 1995. These risks include a variety of factors, including competitive developments and risks factors listed from time to time with the Company’s SEC reports and public releases. Those listed are intended to identify certain principal factors that could cause actual results to differ materially from those described in the forward-looking statements, but are not intended to represent a complete list of all risks and uncertainties inherent to the Company’s business.

With this I would now like to introduce Mr. Raju Vegesna, Chairman of Sify.

Raju Vegesna

Thank you. I would like to welcome everyone on the call and thank you for joining us. Before I commence, let me introduce the team with me in this room. Durgesh Mehta, our Chief Financial Officer; David Appasamy, Chief Communications Officer; Rahul Swarup, President of Enterprise Business; Pijush Das, President of Access Media Business; Surya Mantha, SVP of our Portal Business; Bibhu Kumar, Vice President of International Business.

I will now comment with the opening remarks on our performance. I am very pleased to report that our profits grew 200% over the previous quarter to $1.36 million in the first quarter, while revenues grew 29.1% over the same quarter last year. More importantly, we were also able to build momentum for the year by growing our revenue for the first quarter over the previous quarter. I will now request Durgesh to take you through our financial performance for the last quarter.

Durgesh Mehta

Thank you, Raju. Hello, everyone. I shall now go into the details of our financial performance for the last quarter. Our revenues were $28.74 million for the first quarter; 29.1% higher than in the quarter ended June 30, 2005. The sequential growth in revenues over the previous quarter was 2.5%.

Our cash profit in adjusted EBITDA terms for the quarter was $4.03 million compared to $0.32 million in the same quarter last year. We ended the quarter with a cash balance of $55.27 million, after incurring capital expenditures of about $6.7 million and $2 million paid towards the acquisition of Globe Travels USA during the quarter. Further details are available to you in our press release.

During the last quarter, we invested in a new Data Center in Bangalore to meet our growing demand. We also completed the acquisition of Globe Travels, USA, to enhance revenue-earning opportunities for our portals and the iWay Cyber Cafe chain. We intend to continue our growth trajectory by investing in such opportunities as well as in extending our Network Infrastructure and reach to service growing demand from both the Enterprise and Consumer segments.

Raju will now take you through some of the highlights of the quarter. Raju.

Raju Vegesna

Thank you, Durgesh. I would like to cover a few key achievements during the quarter, starting with our portal business and the acquisition of Globe Travels USA. We acquired Global Travels, an Iowa-based organization engaged in online ticketing and travel-related business in the US-India segment, in a deal that includes cash of $2.5 million, in addition to the performance-related pay outs on stock options.

Online travel is the fastest growing and highest revenue generating category in the eCommerce space in India. Sify expects to leverage its large NRI audience on samachar.com, and the distribution reach of its iWays Cyber Cafe chain, to grow the online travel business through this acquisition on both the international and domestic fronts.

We continue to launch our initiatives in the portal space with our broadband strategy being extended by the city-centric portals. www.Mumbailive.in, the city-centric website for the city of Mumbai was launched, showcasing original Mumbai-centric video content created exclusively for an online audience.

The videos will focus on city news, events, entertainment, celebrities, lifestyle, commerce and politics, anchored by Net Jockeys, a new concept successfully introduced in India by Sify. The website also features live video feeds from the Siddhivinayak temple and other locations so that devotees can have a live darshan. Information on news abroad, Mumbai is available as it happens. Thousands of visitors log on to watch the latest updates on the serial blasts that ripped through Mumbai.

Sifymax.com continues to draw users with exclusive broadband coverage of major international sporting events. For example, the site presented the highlights of the FIFA World Cup 2006 in English, Hindi, Kannada, Tamil, Telugu and Malayalam for the first time.

Extensive World Cup coverage included the Maradona column, videos, highlights, features, picture galleries, contests, blogs and more, with the content available in text, images and video.

Coverage of the French Open and Wimbledon was offered to users with Sifymax being the Exclusive Broadband Partner for TWI/IG in India. Special sections on each event featured highlights, interviews, round-ups and behind the scenes footage. A live scorecard and golden moments of the 2005 tournament completed the experience for tennis fans.

Sifymax also aims to become the preferred destination of Indian Internet users for Indian films. Part of this strategy is the hosting of broadband websites for the stars. The first such site was launched for the popular Kollywood, Telugu and Bollywood actress, Reema Sen. Reema Sen has rapidly become a youth heartthrob and popular actress, and this platform will bring fans closer to their star. More stars are expected to launch their sites on Sifymax with a number of them already initiated.

Our strategy to promote eCommerce aligned with online alliances, has born fruit with the ABP Group of Kolkata to power its online store, www.thetelegraphstore.com. Besides a wide range of products from electronics to clothes, gifts and books on display, the Telegraph Store will also feature exciting bargain offers on select products under the Offer of the Day and the Price Surprise sections. These will be highlighted daily in the newspapers to drive the traffic to the site.

Now, I will cover our access business. Our franchise, the iWay chain, grew to 3,400 cafes during the quarter. We are taking a number of steps to capitalize on the distribution reach of the iWays to diversify the revenue streams. These are expected to generate, in the next few quarters, significant revenues for us.

This includes a new initiative that offers Internet learning classes for those who have never accessed the Internet, for a fee. This has been tested in Coimbatore and is being rolled out to other such non-metro centers.

The other area of focus is in the eTicketing, travel services and other eCommerce services through the iWays. Booking of railway tickets from iWays is already one of the fastest-growing activities. Airline ticketing, hotel and holiday bookings, et cetera, will follow with the launch of such online services by Sify’s portal.

Intense competition from the telcos created pressure on volumes and prices in the Internet telephony business. This impacted the revenues. The division is expanding the Internet telephony business into the ITES sector and has signed up over 80 customers over the last few quarters.

In another example of leveraging our reach, Sify iWays tied up with Vijay TV to enable auditions of the Tamil version of the Great Indian Laughter Show. Following the tie-up, aspiring contestants from all over Tamilnadu and Bangalore walked into Sify iWays to record their audition capsules for the show.

Subscribers to Sify’s high speed Internet access to homes grew to over 191,000 subscribers. Increased focus on the broadband business by telcos has in turn resulted in decreased margins in this segment, while also resulting in subscriber churn. The division is now working on increasing the range of services that can be offered to these subscribers like Internet telephony to increase the average revenues per user.

We grew our user base for online games with A3, India’s first MMORPG game, increasing the registered user count to over 50,000 with the continued promotion of online games through the Game Dromes and iWays. Sify is also working with a leading online game publication to create awareness of online games to grow the market in India.

Our Enterprise Technology Services. Covering Managed Network Services in India, such as VPN services, hosting, security services and offshore management services such as our remote management of IT infrastructure, and managed security services continued to grow both in India and abroad.

The new Data Center in Bangalore has been set up in response to the rising demand for hosting of primary and disaster recovery Data Centers. This is Sify’s third Data Center in the country after Mumbai and Chennai. For example, Pantaloon, one of India’s leading retail companies, awarded Sify the contract to host and manage its Data Center operations, in addition to the Network and Security services that Sify provides to Pantaloon, further strengthening the relationship. Sify has also been commissioned to host the core banking application of Andhra Bank for the next five years.

SifyAssure services continued to grow with the second phase of the multi-phase details risk assessment for a large carrier in the Middle East was concluded. Other key wins included consulting engagements both in India and the Middle East.

Our application services team continued its thrust on Customized Web Applications, Document Management, Messaging and Online Testing.

The surge in the Digital Certificate business in India is expected to continue to grow rapidly due to the launch of the MCA21 initiative by the Ministry of Company Affairs that mandates the signing authorities of companies Chartered Accountants and Company Secretaries, to digitally sign the documents. For example, engagements for secure applications were received from ICICI Lombard, IFFCO, Kotak Bank, Kotak Life and Tata TeleServices.

That brings us to the end of the items that I wanted to share across our businesses. I know all of you also want to know why Mr. R. Ramaraj has resigned to pursue other interests. I have now taken over as the CEO and Managing Director, and it is our intention to ensure a smooth transition with Mr. Ramaraj agreeing to be available to work as a consultant.

We would be happy to address any queries you might have with regard to these changes during the question-and-answer section. Now I will turn to the operator to open the lines for questions.

Question-and-Answer Section

Operator

Our first question comes from George Mihalos - Gilford Securities.

George Mihalos - Gilford Securities

Good evening, gentlemen. Welcome aboard, Raju. To begin with, on Mr. Ramaraj’s resignation, can you talk a little bit about what is behind that? How was his relationship with Sify and should we be expecting more of an exodus from some of the existing management team, which is something that some newspaper reports seem to be suggesting?

Raju Vegesna

Let me address this question. Mr. Ramaraj was interested to look at other opportunities, to pursue whatever opportunities were available, as was stated in the press release. That is the answer to your first question.

The second question, is the existing management team. George, you know in the newspapers you open up these days, you know how the market is in India with the opportunities. One thing I would say is, my engagement for Sify for the last, more than six months, Sify has a lot of bench. What I mean is, we have a very deep bench throughout the organization. India is a great pool of talent, and there are people who will exit depending upon what their priorities in life are.

The management’s responsibility is to bring in new people and organically grow the people who have a lot of talent in the organization.

George Mihalos - Gilford Securities

If we could maybe move on to the café business. It seems like you opened less cafes this quarter than has been the case. I think it is 100 versus 200, typically. Is that what we should expect going forward?

Excluding the VoIP, where it sounds like there is some pricing pressure from competitors, what should we expect from the browsing revenue going forward? Why has that declined, given an increase in browsing rate and more of an emphasis on some of the online games?

Raju Vegesna

George, my colleague Pijush is answering that, who is responsible for that business.

Pijush Das

Regarding the number of cafes, George, actually we have about 260 cafes waiting for hand-over, commissioning. This is going to happen in this quarter, spreading over, spilling over into the new quarter. So there are 260 cafes waiting for hand-over. These will be open this quarter.

Raju Vegesna

To answer more on the question on the we are putting in a clean process to make our Access Media more expandable with profitability. During this process, we are making decisions on where we invest and how do we invest? We as an organization very much believe in our iWays strength and our franchise model.

George Mihalos - Gilford Securities

So near term, should we continue to expect those roughly 200 stores, cafes a quarter? Are you maintaining that base?

Raju Vegesna

Yes. It can go to that, but we are trying to make expansion profitable.

George Mihalos - Gilford Securities

Can you give us a bit more of a breakdown as to revenue from the portal business? By that I mean advertising revenue, eCommerce and mobile?

Durgesh Mehta

George, of the total portal revenue, advertising accounted for 50% compared to 58% in Q4. eCommerce accounted for 24% compared to 20% in Q4. Broadband content-related revenue accounted for 11%. Mobile accounted for 6%. Globe Travels, which is a new acquisition, accounted for about 9%.

George Mihalos - Gilford Securities

What do you think it will take, just in general as you look at the industry, to ramp up mobile revenues? Does that mean there has to be a more favorable –

Durgesh Mehta

Exactly. A more favorable revenue split between the portal and the telephone company, which we are anticipating in order to make sure that the growth is contributing to the bottom line as well.

George Mihalos - Gilford Securities

Last question: what are your expectations as far as growth for Globe Travels?

Raju Vegesna

We have just started the business. Obviously we believe that this is a market where there is a huge growth and a large base. The U.S. to India travel space, where Globe Travels has a lot of strength, itself as a sector is growing by more than 20% to 25% a year. In addition, we also believe that there will be growth coming from domestic business. Also, it will take some time for us to ramp that up. Plus, there will be an opportunity for us to grow in allied areas like hotels and cars.

So we expect that the growth rate will be very significant. Certainly, it will not be significantly lower or higher than our portal growth which, as you know, is almost 100% a year. Obviously this business will not match that, but certainly it will be a very large growth, a good size.

George Mihalos - Gilford Securities

Thank you, gentlemen.

Raju Vegesna

Thank you, George.

Operator

Our next question is from Sameet Sinha - Kauffman Brothers.

Sameet Sinha - Kauffman Brothers

Good evening, gentlemen. I apologize. I am in the airport, so you might hear some background noise. Raju, as the new CEO, can you list your top 3 priorities for the Company? Are you seeing a lot of changes being made in the management structure, plus some top line initiatives or even bottom line growth initiatives?

Raju Vegesna

Sameet, basically what our mission is, it is not changing much. Basically what our mission is to expand it with profitability. So in all of the businesses we have, like our Access Media, our portal, and the International business, we are investing and we want to grow each business with expansion and profitability. We are looking at each business, where we can grow.

Sameet Sinha - Kauffman Brothers

Can you talk about your goals? Two or three-year goals for growth for top line for each of your businesses?

Raju Vegesna

No, three years is too long to predict at this point. We want to grow as much as the market allows. We don’t want to leave anything on the table.

Sameet Sinha - Kauffman Brothers

Any other priorities? You said expand profitably. How about the second or third priority?

Raju Vegesna

Basically one other thing also is the majority of the focus now is domestic. One other thing is we want to expand more internationally. We are developing this technology for the Indian market, because one of the reasons Sify was in a [inaudible] we didn’t focus much outside the Indian market. That is one of the areas we are going to focus on. We are analyzing our costs to get this market, and leverage our knowledge, how we get in the market. That is one of the things we are going to focus on, beyond the Indian market.

Sameet Sinha - Kauffman Brothers

In terms of Globe Travels, you spoke about a cash payment of about $2.5 million and the rest in options. Could you talk about what they have done historically in revenues and EBITDA so we can see what the pro forma growth has been? How much of that benefited this quarter?

Pijush Das

Sameet, the Globe Travels revenue in a full year last year was approximately $1.1 million. EBITDA was around $400,000. That was the business we have bought for about $4 million. Comparable portal businesses have been valued much higher, but we were able to negotiate this deal very economically and favorably because of our ability to give him stock options which are perceived at very high value by the seller.

Sameet Sinha - Kauffman Brothers

How much of that benefited this quarter, can you talk about that?

Pijush Das

Well the revenue of the travel business in this quarter is only 6 million rupees, because we have accounted for the acquisition as of May 10. So this was a very short period. In terms of timing, it was more or less the end of the booking season because most of the travel booking from U.S. to India was for travel which happens in the July/August vacation period, happens in either March or April. So bookings all happened during that period. Therefore the accounts do not reflect the real peak time.

Sameet Sinha - Kauffman Brothers

That is fair. How about the broadband access business? Essentially being an ISP to the home. How is that progressing? I haven’t seen the press release, so could you talk about subscriber numbers there?

Pijush Das

As mentioned, the total number of subscribers have gone up to 191,000 compared to 183,000 at the end of last quarter. As you know, this quarter was more of a vacation period in India, so that was the time when new subscriptions does not usually take place. We expect that the rate will get accelerated. It has already in fact started going up quite significantly from July onward.

Sameet Sinha - Kauffman Brothers

In terms of when we had met a couple of weeks back, you had mentioned about essentially talking to your employees currently and looking at performance-based metrics to be put in place rather than across-the-board salary increases. Can you give us an update on that initiative?

Raju Vegesna

One of the things we are looking at is the Company responsibilities and performance-based compensation. We are hoping to do that as soon as possible.

Sameet Sinha - Kauffman Brothers

One last question. Raju, are you going to be based out of your office in California, or do you think you are going to move your home base to Chennai now?

Raju Vegesna

I will be where the Sify business is. Of course now, in the communications world, where are the customers? Where is the business? I will be there.

Sameet Sinha - Kauffman Brothers

Okay, thank you very much.

Raju Vegesna

Thank you, Sameet.

Operator

Our next question is from Greg Wagner, private investor.

Greg Wagner – Private Investor

Hello, gentlemen. I would be interested in any comments you have on the government licensing procedures going on now. I read yesterday in the Hindu Business Line that the government put a hold on our license because of some grey market activity. Can you talk about those issues of getting government licenses, and how we are going to proceed along? Thank you.

Raju Vegesna

I think, Dennis, there is some misunderstanding in terms of the report. We do not believe the government has either stopped or discontinued issuing of licenses. As far as our license applications for NLD-ILD licenses is concerned, which only will regularize the activity that we are already doing – we have already got FIVB clearance in Sify Communications Ltd., which is a 74% owned subsidiary of Sify. The license is in the last stage of issuance. In fact, we have been advised as to how much fees we have to pay, and which we are in the process of depositing. So it is just a matter of certain formalities and procedure before we get the license. I do not believe that the government has either stopped giving fresh licenses or put any kind of halt on existing licenses.

You must remember that we are already providing these services in our capital city ISP, which was permitted to provide these services. There was a change in the rules whereby a different license was required to be obtained, and the government throughout has assured us that they will not hamper our ability to provide the service to the customers because of this bureaucratic change.

Greg Wagner – Private Investor

Fine, thank you.

Operator

(Operator Instructions) Our next question comes from Robin Ratouretnum – Sedna Capital.

Robin Ratouretnum – Sedna Capital

Can you just talk a little bit about the online games, and when you think it will be a meaningful portion of revenue?

Pijush Das

As you are aware, we are a publisher for A3. We have not yet commercialized this, but it is at the last stages. We will probably commercialize it in the next 10 days. We think that this business offers great potential. We have reached quite high levels of concurrency. Our registrations have gone up. We are looking to have a portfolio of online games. Right now, we only have A3 in our portfolio, but we think that it offers great potential.

Robin Ratouretnum – Sedna Capital

Any metrics you can share on concurrent users or peak users?

Pijush Das

At the moment, our peak users last quarter it was about 400,000 for online gaming, 400,000. It is free at the moment. Last quarter, registrations were about 53,000. Concurrency was about 400 only. At one moment, 400 people playing the game. This is expected to go up. This gives us the belief that there is potential.

Robin Ratouretnum – Sedna Capital

Thank you very much.

Operator

Our next question comes from Madu Kadali – Fertile Mind Capital.

Madu Kadali – Fertile Mind Capital

Welcome on board, Raju.

Raju Vegesna

Thank you.

Madu Kadali – Fertile Mind Capital

I have a couple of questions. I was wondering if you could touch a little bit on two things: broadband access and portal advertising. Can you give us some light on what the market is growing at today in India, and how is the competitive landscape? What is your market share? How are the pricing trends? I would appreciate it. Thank you.

Pijush Das

We are the third-largest ISP in terms of broadband connections, we are the third-largest in India and the largest private player. Therefore, we have a membership of about 191,000 and we expect to grow to about 350,000 at the end of this year.

Those are the figures we are looking at.

Madu Kadali – Fertile Mind Capital

The 350,000 are broadband connections, right?

Pijush Das

Yes.

Madu Kadali – Fertile Mind Capital

What is the total market today in India?

Pijush Das

Total market is a little over 1 million as of now.

Madu Kadali – Fertile Mind Capital

Okay.

Pijush Das

The largest player is obviously [inaudible], the Company.

Madu Kadali – Fertile Mind Capital

How is the pricing pressure? Is there a pressure at all, or has it already reached the bottom at this point?

Pijush Das

I think the pricing is not an issue. I think there is a different kind of class of people, customers, who take a different kind of solution. I think in all of India, people’s wealth is growing. People are trying to use the Internet. People will pay different kinds of products for different people. We are seeing this competition in the markets where we are competing in the low end. But there are other products in the strategies we are coming forward with for broadband, for a different class of customers where price is not an issue.

Madu Kadali – Fertile Mind Capital

What is your current pricing right now?

Pijush Das

Actually, one looks at the average revenue per user, ARPU is probably about 210 rupees. Cities ARPU is 332 rupees.

Madu Kadali – Fertile Mind Capital

From a competitive standpoint, are you stronger in certain markets versus the other companies? What is your focus area?

Pijush Das

On broadband access, obviously we are concentrating on 40 markets where we think the PC penetration is the highest.

Madu Kadali – Fertile Mind Capital

All right. Can you talk about the portal business, advertising? Despite all of the growth talked about, I think the revenue doesn’t seem to catch up.

Durgesh Mehta

The portal business, as I mentioned earlier in response to another question, we had a sequential growth of about 17%. Growth compared to last year was about 96%. The growth has happened across the board, in eCommerce, in advertising and also in the interactive services, as well as in the travel business which we have just acquired.

Our strategy, as Raju highlighted, is to focus on broadband content. Sifymax, we have had several new initiatives including Banglorelive, Mumbailive. We have taken a leadership stance in terms of the kind of initiatives that we are bringing, like the World Cup in local language, and that has made a big difference because soccer is becoming very, very popular in India and there are a lot of people who do not follow English but who would still be interested in the game.

Similarly, we have made exclusive tie-ups with all of the three big television channels for content. We are also having several tie-ups with the film fraternity, initially we were having tie-ups with Hindi Film producers and now we have even tie-ups with regional film makers.

So overall our strategy continues to focus on three areas which is entertainment, which includes movies, television, sports; eCommerce where we are taking a very strong position with [Tarvel] and lastly, eLearning, for which we should be seeing more initiatives in the next one or two quarters to come.

Madu Kadali – Fertile Mind Capital

How is the pricing trend within advertising? Is the focus more on banner advertising or are you moving into more of a pay-per-click model?

Raju Vegesna

Our focus is almost entirely on banner, on a CPM basis. Actually, if you look at our ability to monetize our page views, we have a disproportionate share of the advertising revenue in this country, given that while we have a very healthy e-mail base, we are not an e-mail centered portal. We have a very content- and commerce-oriented portal. We have a very healthy share of the online advertising pie in this country, which is growing at a very healthy rate, but it’s growing from a small base. Our revenue base is not more than 200 crone rupees.

So we actually have a very healthy share of the online advertising pie. Our advertising rates are very competitive with our competitors, like [Unix] and Yahoo!, in the 125 to 150 rupee CPM range. We work almost exclusively on a CPM basis.

One of the things that I would like to add, building on what Durgesh was saying about our focus on broadband entertainment, is that we will move beyond simple banner advertising into video advertising, video banners as well as television commercials, which are perfect for online videos. You will see that they are already beginning to evangelize that in the Indian marketplace with media agencies and big FMC declines. That will take a little time but that is something that you should see over the next few quarters, and that will also reflect significantly in our advertising revenues. That is an area where we have taken the leadership. Today we are the only game in town as far as a broadband portal is concerned.

Operator

Thank you. Our next question is from Joel Cameron with Norberg Capital.

Joel Cameron - Norberg Capital

Good evening. Before I ask my question, I would like to point out that your timing on reporting your June quarter seems to be somewhat tardy. I got this report 10 minutes before your conference call, so I cannot really look at it. I went on your website, and your June quarter is not on the website. I wonder if you might look at that, review that and possibly change that so that we have time to look at the numbers so that maybe we don’t ask such stupid questions.

Raju Vegesna

I would like to apologize for the delay. We had in fact sent it out to the business wire much earlier and I think there was some technical problem in its distribution, which is why we waited a few minutes before starting the conference call as well. We will be much more careful in the future for sure. Thank you.

Joel Cameron - Norberg Capital

Well, Reuters says 12:48. I presume that is 12:30, 12:48 midnight, or that is 8:48 our time. The difference is about 8.5 hours, but you have 8.5 hours lead time to put this out.

All right, let me get to my question. I notice in your quarter ’05, these numbers seem different than when you first reported it, i.e. the enterprise services were reported today at $12.00 million, whereas last year it was reported at $12.66. Access media was reported at $9.01 million, and last year you reported $9.50. Portals was $730,000 versus $770,000, and the others was $520,000 versus $550,000. So can you explain to me the revision downward from last year’s reported numbers in the four categories please?

Durgesh Mehta

Joe, actually, we use the comparable exchange rate for -- the results are in Indian rupees. Last year for the June quarter, when we published the results, the currency translation was at rupees 44.48 -- sorry, this was at the end of the March quarter, and at the current quarter end the Rupee has weakened, so the rupee is equal to 45.87 rupees to a dollar.

Similarly, at the end of the June quarter last year, the rate was different and that accounts for this smaller variation between the numbers that are presented now versus what was you might have seen in the press release at the end of June last year.

Joel Cameron - Norberg Capital

So am I to take that as each quarter comes along, I will see an adjustment from the previous year’s quarter?

Durgesh Mehta

Yes, sir, because our results are in Indian rupees, so the comparison is done at the same exchange rate in order to reflect the same percentage growth as in Indian rupees.

Joel Cameron - Norberg Capital

Okay, fair enough. Thank you.

Operator

Gentlemen, there are no further questions in queue.

Raju Vegesna

Thank you for joining us on the call, and we look forward to interacting with you all through the quarter and around this time thereafter. Thank you and goodbye.

Operator

This concludes today’s conference. Thank you for your participation. You may disconnect your lines at this time.

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Source: Sify Limited F1Q06 (Qtr Ending June 30, 2006) Earnings Conference Call Transcript (SIFY)
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