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Hughes in race for SKumars.com record V-Sat order 

Charles Assisi  
Mumbai, Nov 23: SKumars.com, a subsidiary of S Kumars group, is on the vergeof placing the world's largest order for 50,000 V-Sats. Hughes NetworkSystems and Gilat are reportedly prime contenders for the contract and arelobbying hard. RN Bhaskar, managing director of Skumars.com said the numbersmay possibly be more.

The last such mega order was placed by the US Department of Posts for 34,000V-Sats, but it was staggered over five years.

While the costs involved in the project could not be verified, independentsources claim that the kind of V-Sats Skumars.com is shopping for will costapproximately Rs 1.5-2 lakh per V-Sat because they will be used only forreceiving unlike the conventional gadgets which can be used for bothreceiving and transmitting.

Sources add that with an order of such a size, prices can be driven downfurther and may be bought down to Rs 1 lakh per V-sat, plus or minus a fewthousand rupees.

Bhaskar said, "It is not a simple order. With 50,000 V-Sats, it's the kindof numbers people have not seen. Manufacturing and distribution lines haveto be streamlined and we want it all set up in six months. That means 1,000V-Sats every day. So we're still negotiating."

On how the deal is being financed, Bhaskar said that it is being done partlyby internal accruals and partly on the back of money to be received from theretailers who will be the end-users.

Details on to what extent the retailers will be subsidised were notdivulged. However, he said, "there is no free lunch."

Speaking on why Skumars.com was placing an order of this size, he said that"for any kind of e-commerce business to be relevant in India, it needs atleast 250 million browsers. From existing levels, that is a 10-fold increaseand I don't see that happening too soon. If we are to circumvent thatproblem, then this is the only way out."

He argued that there is no ISP in India which provides services in more than100 cities. That, he said, was a problem for a company which needs to getinto far flung areas to conduct business.

Bhaskar added that Skumars.com is setting up a franchisee network among the30,000 retailers across the country who have been stocking the SKumarsbrand. Others are being inducted. People can walk into these retail outletsand access information or buy online. "We are creating three legs --information, buying & selling and education."

While he refused to disclose what exactly the company's plans were ineducation, he said that, "Anywhere in the world where there is anopportunity for a buyer and a seller, we will be there."

Essentially, he said, that he will make money off transactions conducted onthe portal which the company creates.

As far as payment issues are concerned, he said that the franchisee networkwhich will be in place will make the collections on the company's behalf.While he was tight-lipped on the exact details of how the plan would beexecuted, he said that all of the systems the company implements across itsretail network, will operate on a Linux platform. "That will give Linux ashot in the arm as far as India is concerned," he said.

As a corollary to this order, it is expected that SKumars.com will have toplace an order for an equivalent number of desktop computers, uninterruptedpower supply systems (UPS), printers, etc. This has led to vendors queuingup to actively woo the company. The company recently came to the public witha Rs 75 lakh issue which opened on November 1. To be listed on Pune stockexchange, Bhaskar says the issue was oversubscribed by 12.5 times.

Copyright © 1999 Indian Express Newspapers (Bombay) Ltd.

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