‘ASP route best business option for Indian firms’

K Rajan

Kozhikode, April 25 : WITH the average business of Indian companies ranging between Rs 50 crore and Rs 100 crore, the application service provider (ASP) route is the best option available to them, according to Hughes Escorts ommunications Ltd vice-chairman Shashi Ullal.

To have end-to-end connectivity, these units will have to put in an average investment of Rs 15 crore, which is beyond their means.

Given the fact that foreign clients are doing business online, there is no other option for the domestic majors.
HECL has been able to add 20-odd companies after it had lanched ASP service barely two months back. ASP like HECL will make the investments needed for procuring appropriate software packages and set up servers while the companies will have to pay only for accessing connectivity.

The shift from its core business of VSAT services into areas such as application services and
satellite-based distance learning is expected to improve HECL turnover by 50 per cent to 60 per cent at the end of the calendar year as compared to a little over Rs 100 crore in the previous year.

Currently, HECL is the market leader in VSAT services with 50 per cent market share in the country. Mr Ullal observed that India, reputed for excelent knowledge workers, has to increase its IT-skilled people to 25 lakh by the year 2008 in order to achieve a software export target of $87 billion.

Therefore, the company is planning to launch its IT-enabled interactive distance learning through tie ups with reputed management and technology institutes in the country and some foreign universities.

As per the arrangement between HECL and technology institutes, the former will install the studio and the latter will look after content development and certification among other things.

Work on the first studio, set up at Gurgaon, in Haryana, has already been over and is ready for starting broadcast.

Another studio will be set up on the Indian Institute of Management, Kozhikode by the end of June.

On an average, investment for putting up one studio will come to around Rs 2 crore to 3 crore. As for the number of studios planned, HECL vice-president Amit Tripathi said it will depend on the future tie ups with institutes. In the same way, the fee structure for PG courses being offered will also vary depending on the type of learners.

It is targeted at three segments: Enterprise, working professionals and students. For those under privileged sections in quake-hit and remote areas, HECL plans to offer the courses free.

The participating institutes will fix the terms for registration. The focus will, however, be on management and information technology.

HECL is waiting for regulatory clearances from the department of telecommunications in a few weeks.
HECL national marketing manager Nagesh Singh said the company will have close to 100 class rooms having 20 students each by the end of the year.

Four class rooms at Delhi, Mumbai, Bangalore and Kolkata will be operational shortly.

Regarding the IPO plans, Mr Ullal said a final decision on it would be taken only after the market situation improves.

He was highly optimistic that the snowballing effect of the slow down in the US market will be minimal in India.