BPL Telecom to concentrate on IT as growth driver

BPL Telecom Ltd, a part of the $1 billion BPL Group, is to lay greater focus on its IT business in comparison to its networking activity over the next four years, which is expected to help its revenues to grow by five times and profits by about forty times.

BPL Telecom, an unlisted group company, operates in two segments – the networking segment and the IT segment. In the networking segment it offers enterprise communication and advanced network solutions, while in the IT segment, it offers telecom business solutions, enterprise solutions, systems and embedded software and engineering software. It would continue to focus on these areas over the next four years for achieving growth.

Replying to a question put by domain-B at a recent press conference, Mr. V. N. Bhattacharya, chief executive officer, BPL Telecom said, "The share of IT business in our total turnover by March 2004 will increase to around 55 per cent as against 43 per cent right now". To another question raised by domain-B, Mr. Bhattacharya said his company’s main competitors included among others HFCL, DSQ, Rolta, Tata Telecom, Hughes Software, Shyam Telecom and Geometric Software

The company projects a rise in turnover from Rs. 193 crore as on 31 March, 2000 to Rs. 1,270 crore by 31 March, 2004. The net profit, during the same period, is expected to rise from Rs 7.53 crore to Rs 294.50 crore. Mr Bhattacharya cited "very high margins" as one of the reasons for much faster growth in profits in comparison to revenues. The company has no immediate plans to go either public or tap any sources for funds as none of its activities were of capital-intensive nature.

Mr Bhattacharya said the world was on the verge of a great convergence revolution. He said as a result India could see an investment of about Rs 50,000 crore coming in the next three to four years in IT and telecom areas which would see the service sector grow like never before. He said BPL Telecom was well poised to take advantage of the changing scenario due to its brand equity, skills in networking and IT, ready manufacturing assets and all India reach.

BPL Telecom has an ongoing technical collaboration with Analog Devices and has had collaborations with Harris (USA), Toshiba, Scientific Atlanta, Sanyo, and NEC among others in the past. It has already partnered with Mitsui, Japan, a Fortune 8 company, for marketing IT services in Europe.