Can ACL Wireless Come Out A Winner

Updated: Oct 19 2002, 05:30am hrs
After putting in eight years in field of project engineering, Sanjay K Goyal, a mechanical engineer from the University of Texas, was still restless. He was itching to have do some work in the emerging segments of the new economy. With a seed capital of $ 7,50,000 (Rs 3.75 crore) half of which was contributed by him and other half by angel investorshe decided to plunge into the technology business in 2000. He set up a 7,500 square feet software development centre in Delhi and started his new the company, ACL Wireless with about 15 employees of which he is now the chief executive officer and the chief information officer. He says that the technology he had ventured into, Wireless Instant Messaging (WIM), was not present in India which gave ACL the advantage of being at par with whichever company that thought of getting into the field.

The company has been evaluated by 10 operators outside India. We are looking at getting at least 50 per cent of their business in 3-6 months Sanjay Goyal CEO, ACL
A year later in September 2001 Bharti Cellular (Airtel), the countrys leading mobile operator present in 15 circles extended this service to its customers at the same rate as an SMS (Rs 1.50 per message), but with far more features. Today, the company has also tied-up with other four networks iDEA, Spice, RPG and Escotel. Also, venture capital firm Inter Asia Venture Management (IAVM) committed first round of funding worth $1 million with a promise to enhance the limit when the company needs it. The fact that one of the members at IAVM was also an angel investor suggests that the venture capital company developed faith in Mr Goyals entrepreneurial capabilities. It has set up an office in Kuala Lumpur to cater to the Asia Pacific region. These days Mr Goyal himself is living out of suitcases selling the idea of instant messaging to network operators in Europe and Middle East. We will be able to grab some good clientele in 6-8 months time in Europe, says Mr Goyal.

To take care of day to day activities, he has Ashish Pandit as chief operating officer who joined the company 3-4 months back after being bitten by the entrepreneurial bug himself. An MBA from Indiana State University, Mr Pandit has been associated with the telecom and IT industry for over 12 years and also had a stint a venture capital firm. His strength lies in marketing, sales, operations and consulting and he is also on the companys board.

WIMs Reach
The question now is how does the wireless instant messaging system work. It is different from internet chatting and short message servicing (SMS). It permits ubiquitous access to the service through SMS, Web-enabled wireless devices, PCs and Global reach for messaging partners on mobile networks, desktop IMs and emails, says Mr Goyal.

WIM bridges the gap between mobile to mobile messaging and Internet to Internet and enables mobile subscribers to exchange text, multimedia messages like pictures, graphics etc, create friends list, manage their presence (on mail or mobile) and identify their friends presence on the network. Besides a whole enterprise list of clients can be created. The operation is simple, more or less the way an SMS works. Besides, Mr Goyal says that one can do much more if one has a WAP-enabled mobile set.

ACLs Presence
ACL WIM has not only found customers in five mobile networks in India but also outside the country. AIS of Thailand and Excelcomindo (Indonesia) are using its services. Several other operators have been making enquiries. For instance, we have got an enquiry from Uzmacom, a mobile operator based in Uzbekistan, says Mr Pandit. With its five customers in India and two in South-East Asia, ACL has at present a potential subscriber base of 12 million who can start using the facility.

Mr Goyal is travelling extensively to Europe these days and says the company is close to tie-up with one or two customers in 6-8 months time. He agrees that competition is fierce in this continent with 5-6 prominent vendors. Any Indian player has a cost advantage and therefore naturally tends to score over other players especially when the telecom industry is highly price sensitive, says Mr Goyal.

Ideally, he would like to enter the Americas and Canada especially the US but there are problems of technological incompatibility. While Asia and Europe are largely on GSM platform (global system for mobile communications) the US is mostly on CDMA (code division multiple access).

Future Markets
Even though the company is doing a business of 1.5 million messages a month from Indian operations, ACL sees the future business coming from Asia Pacific and European regions than India. Thats simply because the market sizes are much larger than in India which has a mobile subscriber base of only 8 million, says Mr Pandit. Adds Mr Goyal: We would prefer the outside market also because revenue per message will be higher from these countries. The company has been evaluated by 10 operators outside India. We are looking at getting at least 50 per cent of their business in 3-6 months, says Mr Goyal. He expects at least one mobile operator each in Singapore, Malaysia, Philippines and Taiwan to extend ACL WIM to its customers. The company is also looking at tapping other Indian operators as well as players in Middle-East countries and have a pan-Asia presence.

ACL will succeed because it is futuristic. We have been constantly scaling up. In fact we have the blueprint ready for the next 18 months Ashish Pandit, COO, ACL
Integrating With Future Technology
Mr Pandit proudly says that the company will succeed also because it is futuristic and the 25 member technical team is all the time working on scaling up the product. In fact we have the blueprint ready for the next 18 months, says Mr Pandit. The company is also in the process of unleasing the potential of wireless instant messaging over GPRS (general packet radio service), known as the technology of future. Our product is 100 per cent GPRS enabled, which has wider applicability and which will enable us to fetch a wider market, says Mr Goyal.

Mr Goyal adds that with over 623 million instant messaging users by 2003 and over 117 billion mobile instant messages by 2006 the immense possibility of WIM as the next killer application cannot be negated. According to Baskerville, a global telecom consulting major, WIM has the potential of generating revenue worth US$9.2 billion by 2006. Besides, ACL is a supporter of member of wireless village which further augments its future potential.

Technical And Financial Strength
ACL has a strong team of 50 people of which half are technical related. The team has worked almost for two years to introduce the product and is constantly in the process of scaling it up. The company claims the advantage that it has is a team of entrepreneurs, telecom and software experts both in in Delhi and Kuala Lampur offices and the attrition level is extremely low.

The company hopes that it will be able to make cash profit in the next six months and would be more comfortable in an years time. Since our product is dependent on the mobile operators it is difficult to predict when exactly can we break-even, says Mr Pandit. But since the company is relying on a lean structure ad not having offices across India or for that matter in South Asia suggests that the overhead costs would not go out of control.

The Risks
The fact that ACL WIM will succeed only when more and more mobile network use the technology, however, poses some questions on the success of ACL Wireless and the projections it has made. Going by the success of SMS, it may appear that that WIM may also have a future.

With facilities like group messaging, cross domain messaging, sending and receiving offline messages, search based on factors like age, gender, location, block messages sent by unwanted friends, sending sounds and pictures and scope for features like chat room it seems there is a lot that a customer can be offered.

Also things like availability, mood, location and activity will help the caller and save him from embarrassment. Besides, presence alerts in forms of sort messages, animation and tones will give added advantage. And all at the rate of an SMS.

However, the real test of the success of WIM is when all can be done on a mobile to mobile basis for which each mobile operator (atleast in the region) should use the WIM service like it has happened in the case of SMS.

Like any other entrepreneur, Mr Goyal also has dreams. He wants to have more and more customers and come out with 2-3 new products in the same area in the next few years. However, the best test of any technology is its prolonged use and the capability of the technology to keep people hooked on. Like others WIM also will have to pass that test.