GUJARAT SUPPLEMENT: Infocity: Exploring New Ideas

Gujarat has always been considered as the land
of investors and despite the fact that the state has been facing natural
disasters and communal riots over the last few years, investment has not taken
the back seat. The state still continues to attract investment from all major
industries.

The only industry that was lagging behind was IT but after
the government's consistent push to provide better infrastructure and sops to
the industry, all major biggies are eyeing to invest in Gujarat. 

Innovation is the key for IT in Gujarat. The state has been
trying to do things differently to lure investors. The state's first IT park
'The Infocity', a joint venture between Gujarat government and a US based
Creative IT, not only has adequate infrastructure requirements for IT and ITeS
companies but also boasts all lifestyle pre-requisites.

Infocity boasts of all basic amenities that include
multi-cuisine food courts, banks and ATMs, retail outlets and business centers.
The area comprises manicured lawns, water bodies and gardens. Around 70% of the
project area is landscaped.

Anupam Saxena, director, Infocity said, “We want to
differentiate ourselves with other IT parks in India. And the main
differentiator is the lifestyle that we offer to people working here.”

IT majors like TCS and Microsoft have already set up their
development centers here and around 40 IT and ITeS companies are currently
operating out of Infocity right now. Around 6,000 professionals are already
working here, and the number is likely to go up to 15,000 by the end of this
fiscal. The total number of professionals working in this park would be around
30,000 by March next year.

The developers have already invested around Rs 100 crore in
this project and it is estimated that the entire project would call for around
Rs 500 crore investment.

INVESTMENT PROPOSALS: IEMS (1991-2005)

The Infocity is spread across 150 acres and currently has
four towers with office space of about a million square feet. The IT park will
eventually have 12 towers with office space of about four million square feet.

Apart from the IT space that this park offers, it also has
a residential township that comprises bungalows and low-cost apartments.
Infocity provides these housing facilities to IT professionals working in the IT
park.

The IT park will soon have all the major lifestyle brands
available. Apollo has already set up its wellness center and it will soon be
followed by a five star hotel and a shopping mall, the talks for which are
currently on with major players in their respective fields.

The focus is also on facilitating education. Already ICFAI
and NID have set up their centers and the park will soon boast of an
international school.

“Our IT park is one of the best connected IT parks in
India. We have almost all the major ISPs present here and there is no downtime
and dearth of bandwidth out here,” added Saxena.

Infocity suffered major loss due to earthquake and communal
riots. The park was ready for possession five years back but companies were
reluctant to invest in the park. As a result, there were hardly any companies
present a couple of years back. But now that the situation has improved,
companies are back with a bang. “We would have got a number of companies
present in our park four years back, if the disaster had not happened here,”
added Saxena. 

Even during disasters, the Infocity was up and running
24x7. The transport was made available to all professionals working in Infocity
and the management ensured that they reach on time.

Since Infocity is
conveniently located on the National Highway 8C connecting New Delhi and Mumbai,
it's easier for companies to carry out their operations as most of the
companies' set-up is scattered across the country.

"Times New Roman";mso-bidi-font-family:"Arial Unicode MS";mso-font-kerning:
18.0pt;mso-bidi-font-weight:bold">'Government is determined to provide
conducive atmosphere for IT investments'

                                           Â
-Raj Kumar, secretary,
Department of Science & Technology, Government of Gujarat

What
has been done by the state so far to attract technology investment in Gujarat?Â


Our job is to provide world-class infrastructure, which we have already
provided. All major companies have shown interest and India's biggest IT
company TCS has already set up its development center in Gandhinagar's IT
park. It has taken 20 acres of land. Others are also following the bandwagon.
Apart from the IT park in Gandhinagar, we have built two IT towers in Ahmedabad-GNFC
and Astron-which are fully occupied by IT and ITeS companies.

Apart
from infrastructure, what value add do you provide to companies?

Government is determined to provide a favorable atmosphere for IT
investments in Gujarat. And all major IT companies that have already set up
shops in other states are now looking to spread their risk by investing in other
geographies. And Gujarat has become the preferred destination to do so.

What
are the other initiatives that you are planning to boost investment in the
state?

There is a demand to provide a special economic zone (SEZ) status to some
infrastructure projects. At present, there is one SEZ under GIDC in electronic
city in Gandhinagar. So we are contemplating giving SEZ status to infrastructure
projects that are coming up. This is going to be one of our major initiatives in
the next fiscal, and would definitely attract lot of companies.

When
are you planning to come out with a new IT policy?

We have an IT policy of 1999 in place, andÂ
that would expire this year on June 30. We are planning a new policy
soon. Already a draft in this regard has been prepared and soon we will have new
IT guidelines in place. 

What
is the government doing to propel IT growth in Gujarat?

I think technology has not reached to masses properly. So it's important
for us to create awareness about technology and make sure that people get used
to it. We have been doing this for so many years but there should be a joint
effort from all the stakeholders involved.

Is
government taking any concrete steps to fuel telephony growth in rural areas?

We have almost all the major service providers present in the state but
apart from BSNL, none  has taken
rural initiative in a big way. Though private operators have installed towers on
the highways but that's not enough to provide mobile connectivity in rural
areas. Private operators should look at providing affordable telephony in rural
areas. And if required, government should come out to support them.

What
e-governance initiatives have been deployed?

We have put Gujarat on statewide area network (GSWAN), which is the
state's e-governance vehicle with a converged network. GSWAN is and IP network
and it provides voice, video and data. We have all 25 districts and all 225
talukas connected and functional and about 560 offices in the network, capable
of handling high volume, high-speed data and video conference. One of the robust
campus area network at Secretariat (SCAN) connected with GSWAN enabling even
Taluka level access for all officers at secretariat and vice versa. Satellite
interconnect with GSWAN hub has made all services of the network omnipresent in
the country through portable VSAT terminal which was put into services in June
2002.

'There is always risk associated with technology,
entrepreneurs, and the market...'

                                      Â
-Vishnu Varshney, president
& CEO, GVFL

What
is the focus of GVFL?

It is the oldest start-up venture fund in India. Started in July 1990, GVFL
has launched five funds with a cumulative fund size of Rs 133 crore. In the
initial years, the focus was on technology, consumer product, environment and
IT. In 1997, the focus was more on ICT. And last two funds were sector-specific
like biotech and SMB.

The company has an
outstanding record. The focus is on start up and early stage venture funding. We
are involved right from the concept stage where we make investments, do
handholding, and nurture them. We do two more rounds of funding and then the
companies move to private equity.  

What
about ICT funds, and what is now on the offer?

In the third fund, E Info Chips was an outstanding success. This was
Gujarat-specific fund as the government was keen to promote IT. In this case, Rs
10 crore was contributed from SIDBI, Rs 17 crore from Government of Gujarat,
total fund was around Rs 35 crore.

We have already
invested in six companies and one we have divested. The companies VC funded are
Icenet (IP), Net4nuts, EQ (mobile commerce), Anupam (software), and Converged
Labs (network design and mobile commerce).

The business plan
for sixth fund is ready and we are approaching several prospective investors. In
SMEs, we are looking at start up and early stage seed funding and we plan to
invest in the range of Rs 1-10 crore. The total fund size is around Rs 100 crore.    Â

How are
you different from company-owned VC?

Company-owned VCs look for strategic tie-ups for technology or for making
inroads into a new market. These companies look at technology synergy, and look
at companies in a specific segment, whereas we are working on broader
technologies. The traditional VC companies are interested in 5-6 companies of
the same category and are more interested in strategic synergies and not in
value addition.

Does
India require more VC funding companies?

India is an innovation center whereas China is a factory. For India to be a
knowledge base, one has to promote innovation through venture capital.Â

How has
been your experience with telecom companies?

Out of all the sectors, the telecom sector has fetched the maximum money for
the company. We had invested in Deccanet Design as a seed investor and got good
returns when Flextronics bought this company.     Â

Hot
areas where GVFL plans to do funding?

The emerging areas are: dotcom and telecom (m-commerce, and network design).
All these have strong potential in the country. On the m-commerce side, the
focus is on doing something different from the traditional approach. In terms of
investment, I am on a lookout for a good telemedicine company and a good BPO
company. We are also on the lookout for a good products company, which is unique
in its proposition.

What
are the risks associated with VC funding?

VC funding is very demanding, and  there
is always risk associated with technology, entrepreneurs, and the market right
from the seed stage.  

'We plan to spend Rs 500 crore in FY 2006-07'

                                    Â
-Peeyush Khare, GM, marketing & business development, BSNL (Gujarat
circle)

What
is the present status of BSNL network in Gujarat circle?

We are number two in GSM but we soon plan to be number one with our
expansion plans. On the GSM front, we have a total subscriber base of 850,000 of
which prepaid is around 650,000 whereas postpaid is around 200,000. Nationally,
BSNL's market share in mobile is around 19% but in Gujarat, it is 4% more than
the national average. In terms of channel spread, BSNL has a large reach of
54,000 touch points. In terms of breakup, the company has 90 franchisees, 720
sub-franchisee, 2,651 retailers, and 49,866 STD PCOs. And all these channels, do
sell BSNL products in different regions.

In basic phone, we have a market share of around 82% and it is around 6%
higher than our national average of around 76%. This is extremely good, since
private operators are not interested in basic services. On the other hand, BSNL
has been building infrastructure for both urban and rural ie remunerative areas
plus non-remunerative areas. In broadband, we have a capacity of around 45,000
points and we have provided around 35,000 connections. In terms of VPT coverage,
BSNL covers 14,000 of 18,637 villages. On non-voice front, we have done pretty
well. The company has sold 5,000 circuits of 64 Kbps and 1,000 circuits of 2
Mbps and above. And all this is supported by state-wide OFC infrastructure of
around 35,600 Kms.

What
are your expansion plans in FY 2006-07?

In FY 2005-06, we have invested in excess of around Rs 500 crore and we plan
to spend a similar amount in FY 2006-07. We plan to add one mn GSM lines within
next four months. So, in terms of BTS expansion, we plan to move from 800 BTS
and 2 MSCs to 2,000 BTS and 4 MSCs. MSCs will be set up in Ahemdabad, Baroda,
Surat, and Rajkot. This will help in increasing our market share from 23% to
around 50%, as there is a lot of demand which is still unfulfilled both on the
voice plus data side. Within 6 months, we plan to double our broadband capacity
from 45,000 to 90,000 points and we plan to cover all district headquarters and
all taluqas. In terms of VPT coverage, we plan to cover all villages by FY
2006-07.    

How
do you see telecom services in Gujarat? Â


In terms of investment, Gujarat is a good state as there is a lot of
cooperation between different government departments. So, companies in IT/ITeS
sector have started focusing on Gujarat along with other verticals. In terms of
future demand, the industrial climate is fine for basic, broadband, and mobile
services. Presently, broadband is low if one compares developed economies but it
is just a beginning as there is lot of untapped potential.

There is a lot of demand in all the categories and we are gearing
ourselves to cater to the demand.

Recently,
the company has bagged a large deal on mobile services. What is this deal all
about?

Recently, BSNL has bagged a large deal from state government undertakings
whereby all state government employees  will
opt for BSNL mobile services. This is a very big achievement for BSNL as the
process took around 6 months and lot of persuasion at different levels.
Presently, around 1,000 connections have been awarded to BSNL and plans are for
achieving 50,000 post-paid connections within 2-3 months. In terms of revenue,
BSNL is expected to generate a revenue of Rs 20 crore per annum and plans are
afoot for setting up a separate unit to handle this project.

What
are the customer initiatives presently active in Gujarat circle?   

For corporates, we have account-holder concept who handles all types of
services be it voice and data on a regular basis. We also try to educate our
customers about suitability of a particular plan with their business
requirements so that there is a lot of stickiness with BSNL. We try to analyze
call center data and try to sort it out at the earliest. If there is a need, we
try to escalate problems to appropriate levels.

'We are planning to make
cities In Gujarat Wi-Fi'

                            Â
-Chirag Mehta, CEO &
managing director, Icenet.net

How
are things moving for Icenet.net? 

Consolidation and maturity in ISP space has made Icenet stronger and the
company is  now competing with
telcos on the enterprise space. For dial up services, the company has a total
base of around 35,000 customers in nine cities. The cities covered by Icenet
are: Ahemdabad, Baroda, Rajkot, Surat, Gandhidham, Kutch, Himmatnagar, Mehsana,
Anand, Vapi and Valsad. On broadband front, we have a base of around 5,000
subscribers. And all this is presently supported by 300 Km of OFC backbone.  Â

We are a one stop shop for Internet. In terms of focus, we are targeting
VoIP and enterprise. On the enterprise side, the focus is on wireless where the
company is testing new technologies like Wi-Max and plans are to move to ILD
space as and when it opens up. Presently, we have the license to originate calls
but we do not have a license to terminate calls. Now with the license fees
coming down, it makes an attractive proposition as calls termination is a huge
business as there is more calls termination in comparison to call origination in
India. The further opening up ILD sector will result in cheaper calls, resulting
to good growth in ILD traffic thereby creating good business opportunity for new
entrants. For ILD, the focus would be more on enterprise, retail, inbound and
outbound call centers. 
Â

What
is the USP of Icenet.net?   

My focus is only Gujarat and my USP is in terms of service levels. We
provide 24/7 corporate help desk facility. Once the complaint is registered, we
reach as early as possible. We solve their network problems and provide business
continuity as we have the flexibility since we are a small company. On the SLA
side, we are raising the bar as we move forward.

Since 1998, we have been providing a complete migration path to our
corporate customers. We started with dial-up and moved to e-mail service. Later,
we started  leased line service and
then moved to data security and data storage, network management, and facilities
management.  In terms of clients,
Icenet.net has all major clients under its belt like Asima, Adani, Norma, Space
Application Centre, Torrent, Motif, Azure, and iCall.   Â

What
are the new technologies that you are planning to deploy in future?Â


Our strategy is to be ahead in the market and we are testing two new
technologies-Wi-Max, and outdoor metro mesh Wi-Fi network. In the metro mesh
network, we are doing pilots with Tropos.com and Bell Air.com. The pilot is
conducted in an area of 29 square kilometer. While telcos are focusing on
wireline, we are planning to make cities in Gujarat Wi-fi so that one can get
Wi-Fi signals on their laptops. We are planning to have around 15-20 cell sites
and looking at an investment of around Rs 2 crore to make Ahemdabad Wi-Fi. We
have got an encouraging response and focusing our attention on it.

On the Wi-Max, we are doing pilots with Motorola for MotoWi4 which is a
pre Wi-Max product and is based on TDD technology. In this case, we have set up
three base stations, and are providing connections to corporate customers. Since
the CPE costs are on a higher side, the focus is on corporate customers.

What
are your revenue projections for FY 2006-07?

This year, we plan to close the year with revenues of Rs 20 crore and have a
positive balance sheet. Next year, plans are afoot to achieve Rs 35 crore. ILD
is planned through VC funding and internal accruals. For ILD, the company is
planning for first year investment of around Rs 12 crore, and then plans are
also for investment of Rs 20 crore in next to next year.    Â

'We have 60 percent share in African market'

                         Â
-Nikhil Jain, COO & president,
Elitecore Technologies

What
is the focus of the company? 

We started in the Indian market in 2000 and presently we are very
successful in IP based billing as we have a dominant market share. Our focus
areas are billing, provisioning and mediation on IP based convergence.

In the dialup segment, both in the postpaid and prepaid space, the company
has supplied billing solutions to both BSNL and MTNL. So, out of 5 mn
connections, around 3 mn have been supplied by Elitecore. In the broadband
space, the company is supplying billing solution for one mn broadband customers
of MTNL. The company is also a hot contender for BSNL broadband project.
Â

The company is also in the core network and has supplied end-to-end
centralized billing solution to BSNL for MLLN (managed leased line network). In
this case, Elitecore has also provided SLA (service level agreement) based
billing. We are also providing similar service to MTNL.

In FY 2007-08, Elitecore plans to activate around 5-6 mn broadband
subscribers and this would be a big achievement for us. Â

It
seems the company has tied up with lot of vendors. Would you name some of them?

We have a tie-up with MBT and Tekelec where the focus is on international
and large government projects. Apart from this, we are still doing business with
Huawei. In the case of MBT, we are looking at international projects for one of
the operators in Jakarta for data services and voucher management system for
Hutch. For Tekelec, the company has signed for SS7 project where the focus is on
inter-connect billing. This project is under implementation and will be up and
running by the end of March. For Huawei, the company has executed projects for
BSNL in MPLS, MLLN, and broadband access arena.

What
about international projects?   

We have a good entry into African market where we have a market share
of around 60%. We have made inroads into Kenya Data Network, Wanch, and Payroom.

Would
you tell us more about JISP, convergent billing framework, which was launched
recently?

JISP Prepaid is an integrated billing customer care and service
provisioning solution for the new generation of prepaid services. It supports
full range of prepaid implementations, including IN.

'We would like to extend the brand image of the
company in telecom'

                                                                  Â
-Chetan Turakahia, director, Intellicon

It
seems you have now shifted your focus to government. What services do you
provide in this vertical?

We are the frontline player in the Indian telecommunication equipment market
(EPABX, KTS and voice solutions) and have successfully provided a telecom
networking solution to the Indian Army. We are perceived as a solution provider
than an equipment vendor since 1988, and have the expertise and products to
cover all the requirements spanning various technology platforms. Today,
corporate, governments, SME's, defence organizations and other large
institutions have endorsed Intellicon's core competence as a solution
provider.
Â

You
have recently joined hands with Tandberg also? Why this sudden shift towards
distribution of products?

The products from Tandberg and the Indian market understanding of Intellicon
would be an unbeatable combination. Our strong service and support network would
provide the last mile support to ensure high equipment uptimes. We currently
have direct presence in 11 major cities of the country and channel presence in
more than 150 locations. With over a decade of experience and solution expertise
in the government, automobiles, pharmaceuticals, manufacturing, retail, defense,
utilities and other sectors, we are sure that distribution tie-up with Tandberg
will take convergence to higher strata in India.

What's
the reason behind the tie-up with Karel for EPABX when other known brands are
already available in market?

Intellicon has tied up with Karel for marketing their range of EPABX and key
telephone systems. Karel is a market leader in many parts of the world for
manufacturing and supplying telecommunication equipment. In EPABX systems, Karel
has the advantage over others. It's  better
product features gives us an edge to sell its products in the highly competitive
market.

What
sort of telecom applications do you provide?

Intellicon has the products to cater to the requirements of the clients from
4-1344 Ports. This spans the entire spectrum of new technologies like VoIP, DECT,
ISDN, GSM to name a few. Intellicon's philosophy of offering solutions
contextual to a business scenario makes it the preferred “solution provider”
of clients. The primary focus to offer “communication solutions” using
cutting edge technology provides Intellicon with a differentiation compared to
our competitors.

What
telecom software solutions do you provide?

Intellicon's unique prowess to offer solutions instead of products emerges
from the specialized skill sets available with us. Intellicon has a strong
expertise in telecom hardware and the corresponding software, both application
and embedded, which provides the 'total telecom solution' to a client. With
over a decade of experience in telecom business, we have the necessary skills
and experience to provide various telecom software solutions. These range from a
call billing software to a CTI application or may be an IVRS. The existing
software products can also be tailored to cater to a specific requirement of the
client.

Tell
us about your AIDC Operations?

Intellicon is among the few companies of India who can offer an end-to-end
data capture solution right from conceptualization to design and implementation.
We provide consultancy in solution conceptualization and design, and also supply
hardware, software and consumables thus offering a 'single vendor interface'
to customers for their total data capture requirements. With the available
product range, skilled and capable manpower spanning diverse industries areas,
Intellicon has delivered solutions for a variety of applications across a broad
industry spectrum using warehouse management system.

What
would be your key thrust areas in FY 2006-07?

We would like to extend the brand image of the company in telecom, AIDC and
software industry to newer markets in terms of business segments and geography
and to pave path for the growth of the software division as a SBU. Also we would
like to have a turnover of Rs 40 crore by the end of the next fiscal. This year,
we are projecting a turnover of Rs 30 crore.

Pravin Prashant

pravinp@cybermedia.co.in

Rahul Gupta

rahulg@cybermedia.co.in