The fiscal 1997-98 was a good
year for Alcatel Modi Network Systems Ltd though it could not match the turnover it made
in 1996-97. The fiscal 1996-97 was a milestone in the history of Alcatel Modi, when it had
grown 371.41 percent compared to the fiscal 1995-96.
In the last fiscal the company
posted a turnover of Rs 300 crore against Rs 408 crore in the fiscal 1996-97. It has thus
registered a negative growth of 36 percent. And, the company has slid from the #6 rank in
V&D Top 10 in 1996-97 to the #8 position this time.
The company is yet to make out
the details of the profit and loss. There are a number of reasons for the company not
living up to the turnover of 1996-97. First, orders did not flow the way it was expected
to from DoT, the prime customer of any switching company. Two, the general economic
slowdown has delayed many a decision of other potential buyers. Third, the company could
not capitalize on its image as one that knows the Indian market better than any other MNC
as its operation here dates back to a few decades.
However, it continued to be the
top switching company in India for another year. In its traditional
stronghold—DoT— the company continued to be on the top with an advance purchase
order for 260k lines for its OCB switches at a per line price of $157.
Another feather in the cap of
Alcatel Modi was its repeated success in the private operators market. The first private
basic services provider in India, Bharti Telenet in Madhya Pradesh, chose Alcatel’s
A1000 AS12 switching system. The contract was worth Rs 180 crore. Hughes Ispat, the
licensee for Maharashtra, has also chosen Alcatel switching systems. This year, in all
probability, will see the six licensees of basic services rolling out their projects. With
the two orders in hand, the company is hopeful about the remaining four companies about to
start basic services.
However, Alcatel’s major
success was restricted to switching. In the large switching business, Alcatel enjoys more
than 25 percent marketshare. In the other emerging area of access technologies, Alcatel
lagged behind. In Wireless In Local Loop (WILL), with just the DECT-based solution,
Alcatel Modi is not even considered a strong contender.
Another area which would have
dictated the fortunes of Alcatel Modi was the GSM equipment business. Here, also the
company did not see any major breakthrough. Most of the operators who expanded their
networks chose not to change loyalties. The only new contract signed in 1998-99 went to
Ericsson.
The recent takeover of DSC
Communications by Alcatel Networks Inc. at an estimated $4.4 billion is expected to
increase Alcatel’s access in the telecom equipment market. Although the changes at
the local level have not been ascertained, the takeover will have its impact on the Indian
market as well.