In this blog concerning the growth through Consolidation of T&M industry in India,we will talk of couple of T&M Services companies which need to be looked at,from the point of view of strengthening the financials and improving the service offering of these.First to come in mind are good number of small operators who give out on rent the T&M instruments widely used in maintenance of physical layers of the telecom.Instruments in use are the Sitemaster and OTDR and the RF monitors of different kind.There is no recognised MNC brand operating in the country,except Livingston.Some others like Electrorent,TestEquity etc tried entering the market but failed.A few Indian mercantile companies are in this business ,mainly Mumbai and Kolkata based traders.So the first level of T&M Consolidation can be done by a Global Lease Rental and Asset Management and Reconstruction company to achieve at least a revenue of say 26-28 Cr pureplay services in this segment.Because of the depressed market conditions,there is a case of wise cherry picking here.
Another recommendation will be in the area of such companies in the Power sector maintenance.Again there has been severe depression with mainstream power companies and they are wanting to shed or hiveoff the testing and maintenance business to separate specialist organisations.Entrepreneurs can explore such opportunities at BGR,JSPL and some smart power operators companies.Here the consolidation of T&M companies can lead to creation of a platform which can lead to real big operations.They will have scope of big expansion when UMPP,Nuclear and Coal based power projects are put into stream.
The aerospace and Defense related maintenance companies can be consolidated in a more innovative way.There are good large assets are available of many MROs of aviation (Commercial Aviation)in several cities where there is MROs headquarters.So these can be consolidated to achieve better profiability and scaling too.
We will keep this piece of Acquisition and consolidation going in couple of more blog posts.Keep watching!
Sunday, April 15, 2012
Friday, April 13, 2012
T&M Industry in India: Acquisition,Consolidation,FDI and other tidbits!
T&M industry in India has been very interesting phases over the last 40 years or so.It has been having various steps of Concept Development,Channel Acquisition and Distribution metamorphosis and channel disruptions etc.Mainly there has not been much of the indigeneous industry right since the 70s.Only a clutch of the local industries has been at the helm of affairs, names flashing then were Aplab and Motwane et al.So, the onus had been on the MNCs to develop local market.And the task,risk and cost of having direct presence being very high,the idea had been to develop the local associates (from an Agent,Sales Rep,to Distributor)to be a virtual Principal company.
A combination of renowned Principal, and very professional distributor was real lethal those days.Basically the two T&M companies ruled 80percent of organised selling and supporting the India Business.In the late 80s the situation started changing as India had by then a little liberalised and exposed to many modern projects in Aerospace,Defense and Telecom sectors of the Country.More Western and Japanese companies in T&M space started courting Indian market then.New alliances,new business models and local talent hunt dovetailed US returned Professionals.After 1991 the scene was fairly stable in terms of reforms and India started liberalisation approach unidirectionally!
FY2K and post 9/11 the tech world was so much changed and love affair between the Bangalore and the valley reaching crescendo, practically everybody wanted an India backoffice presence.New companies started registering and all T&M companies operating through local subsidiaries and each was pinching the channel created by the other.Most companies were headed by people from HP/Agilent & Acterna/JDSU. Today when we talk of T&M talent acquisition,we seem pretty full and the way companies now can move on is Consolidation, Consolidation and Consolidation.
In next few blogs we will discuss possible realignments,acquisitions and how to do it more inexpensively.And more cash-accretively, as the finance types say!
A combination of renowned Principal, and very professional distributor was real lethal those days.Basically the two T&M companies ruled 80percent of organised selling and supporting the India Business.In the late 80s the situation started changing as India had by then a little liberalised and exposed to many modern projects in Aerospace,Defense and Telecom sectors of the Country.More Western and Japanese companies in T&M space started courting Indian market then.New alliances,new business models and local talent hunt dovetailed US returned Professionals.After 1991 the scene was fairly stable in terms of reforms and India started liberalisation approach unidirectionally!
FY2K and post 9/11 the tech world was so much changed and love affair between the Bangalore and the valley reaching crescendo, practically everybody wanted an India backoffice presence.New companies started registering and all T&M companies operating through local subsidiaries and each was pinching the channel created by the other.Most companies were headed by people from HP/Agilent & Acterna/JDSU. Today when we talk of T&M talent acquisition,we seem pretty full and the way companies now can move on is Consolidation, Consolidation and Consolidation.
In next few blogs we will discuss possible realignments,acquisitions and how to do it more inexpensively.And more cash-accretively, as the finance types say!
Tuesday, April 10, 2012
T&M Acquisitions in India can be motivated by Offset Policies!
Since 2006 the central cabinet had given a kind of green light to various user ministries to pursue the so called "Offset Policy" in major procurements the user departments are making.The current proposal stands at the !00 M$ or 200 M$ thresholds for these offsets to get triggered.This actually leads to offsetting of 30% of procurements through local companies,or locally created companies by MNCs for offsetting the total contract outgo.In bigger cases the threshold can be as much as 50% contract value.
To coordinate in a systematic manner across different user ministries/sectors a National Offset Authority is chaired at Cabinet Secretary Level.Today mainly the Defence Ministry are seizing the opportunity because of large scale/Big ticket projects procurement.Total offset pie available to cater to Defense itself is estimated to be worth around Rs 20000Cr!
This is where opportunity,a creative one can come for T&M companies.As the local procurement will consist of 3rdparty hardware,3rd party software,services and program management,independent Engineering Services and lot of jigs,fixtures,tools and testers,the whole gamut can be managed by T&M Services banner easily.This will require astute sales and business planning,local companies creation and motivating small,niche hitech companies to come to India and get plugged in with this huge,sustainable and game changing one for T&M industry!
Designing a business model for different high technology sectors will be very involved process.Depending upon resources of information,taxonomy,databases,bills of materials and global/local pricing on products and services these models will have to be tweaked.Many of the processes of procurement are getting eDriven and therefore they can be very cost efficient and suitable for Governance Platform too.T&M industry more particularly T&M services will benefit.M&A of various main technology companies and therefore attendant T&M companies will benefit by this opportunity.We need to see how it plays out and how we respond in an enterprising manner!
To coordinate in a systematic manner across different user ministries/sectors a National Offset Authority is chaired at Cabinet Secretary Level.Today mainly the Defence Ministry are seizing the opportunity because of large scale/Big ticket projects procurement.Total offset pie available to cater to Defense itself is estimated to be worth around Rs 20000Cr!
This is where opportunity,a creative one can come for T&M companies.As the local procurement will consist of 3rdparty hardware,3rd party software,services and program management,independent Engineering Services and lot of jigs,fixtures,tools and testers,the whole gamut can be managed by T&M Services banner easily.This will require astute sales and business planning,local companies creation and motivating small,niche hitech companies to come to India and get plugged in with this huge,sustainable and game changing one for T&M industry!
Designing a business model for different high technology sectors will be very involved process.Depending upon resources of information,taxonomy,databases,bills of materials and global/local pricing on products and services these models will have to be tweaked.Many of the processes of procurement are getting eDriven and therefore they can be very cost efficient and suitable for Governance Platform too.T&M industry more particularly T&M services will benefit.M&A of various main technology companies and therefore attendant T&M companies will benefit by this opportunity.We need to see how it plays out and how we respond in an enterprising manner!
Tuesday, April 3, 2012
T&M Industry in India:FY13 Drivers for the Customers
The FY 13 has started with some mixed feelings and hangup of policy paralysis and balance sheet constraints for the Government.The overhang of policy retrospective for tax calculation on Capital Gains is there,with deficit on balance of payment widening.Rupee is flirting around 51 to a Dollar.T&M demands naturally is not auguring well because all the major purchases need to be imported.In such a scenario the different sectors using T&M are stacked up as follows:
Defense: The controversy and major scandals reported in the press recently will have its contingent effect on T&M purchases in the three wings of services.SMT/STE products and tools in EME TG trials will be slightly delayed but tendered purchases will happen as in the pipeline.Likewise the field purchases through tenders of DGS&D will happen as planned.
Telecom: The major driver in the operator sement will be the LTE.The TDD version is automatically decided per the band alloted and the choice for adopting International standards.Many vendors have done the PoC with major operators and initial orders for LTE infrastructure are trickling in.So the deployment T&M either directly,or through lease rental will happen.Even though fizz may not be there! Likewise major fiberisation project will go through.
Research & Development/Education sector: This will show a big boost with some major T&M purchases planned and under discussion at DGS&D and local Demand Officers level.The good part is that the demand will be higher than last year,more evenly distributed and geographically balanced.Perhaps North India overall will pip to the post when it comes at the year end.South and West will not be brighter this year!
So, Let us welcome the year fingers crossed.Hope is high but a couple of Government announcement positively could boost sentiments.
Defense: The controversy and major scandals reported in the press recently will have its contingent effect on T&M purchases in the three wings of services.SMT/STE products and tools in EME TG trials will be slightly delayed but tendered purchases will happen as in the pipeline.Likewise the field purchases through tenders of DGS&D will happen as planned.
Telecom: The major driver in the operator sement will be the LTE.The TDD version is automatically decided per the band alloted and the choice for adopting International standards.Many vendors have done the PoC with major operators and initial orders for LTE infrastructure are trickling in.So the deployment T&M either directly,or through lease rental will happen.Even though fizz may not be there! Likewise major fiberisation project will go through.
Research & Development/Education sector: This will show a big boost with some major T&M purchases planned and under discussion at DGS&D and local Demand Officers level.The good part is that the demand will be higher than last year,more evenly distributed and geographically balanced.Perhaps North India overall will pip to the post when it comes at the year end.South and West will not be brighter this year!
So, Let us welcome the year fingers crossed.Hope is high but a couple of Government announcement positively could boost sentiments.
Wednesday, March 28, 2012
T&M can help in innovating Products!
Usually any industry involved with high technologies goes through the Product,Services and Product cycle.The cycle really represents the business attributes as the market matures from startup to mainstream and then fades off to get a replacement/substitute product.This cycle is also influenced by the disruptive technologies and inventions.In such times whole industry goes thru many changes in market place making Business Models turn on its heads.
One industry which keeps the innovation engine firing is the T&M products and services which helps churn out new products faster and accelerates time To Market TTM.T&M industry oftentimes defines new products and aids in design to form basis for "testability-design relationship".The Capex needed for designing these innovative products impacts these designs and vice-versa the testers cost etc gets raised per new design requirements.
India is experiencing this product innovation startup activity through various research organisations.Traditionally the CSIR and Defense R&D labs have contributed to these local IP creation.Now more than 800 MNCs are leveraging the local manpower infrastructure to design locally created products and services architechture.All these organisations are exploiting power of testing platforms in these diverse applications.The testers in these organisations have to test designs for "Conformance", Uniqueness of measurement,Accuracy and Quality.T&M here plays a crucial role in this regard.India hopes to create lot of local designs with new age T&M coming to its aid.
One industry which keeps the innovation engine firing is the T&M products and services which helps churn out new products faster and accelerates time To Market TTM.T&M industry oftentimes defines new products and aids in design to form basis for "testability-design relationship".The Capex needed for designing these innovative products impacts these designs and vice-versa the testers cost etc gets raised per new design requirements.
India is experiencing this product innovation startup activity through various research organisations.Traditionally the CSIR and Defense R&D labs have contributed to these local IP creation.Now more than 800 MNCs are leveraging the local manpower infrastructure to design locally created products and services architechture.All these organisations are exploiting power of testing platforms in these diverse applications.The testers in these organisations have to test designs for "Conformance", Uniqueness of measurement,Accuracy and Quality.T&M here plays a crucial role in this regard.India hopes to create lot of local designs with new age T&M coming to its aid.
Monday, March 5, 2012
T&M: Test Challenges in Embedded Chips for Telecom Devices
This current decade is facing proliferation of faster Devices and multi functional implementation on chips.The various functions are being offered by the same Mobile Phones simultaneously.It is a camera,Radio,Social networking platform,Video streaming device besides the basic phone!This can all happen if the embedded chips are having complex architecture on the same Silicon.And before this can be realised it needs to be passing thru Testing/Verification. How and whether we have the right testing approach?
Testing of these complex ICs is done more and more through Software Defined Test or SDT.So the idea is to separate as much as we can the hardware ecosystem of T&M from its Software.Since we want to achieve more and more from the same chip,we hit the physical limits defined by Moores Law (number of transistor doubling every Eighteen Months)the only way out being build the testability at every stage of design and manufacturing!
Since T&M technology has to be smarter and faster than chips under design,the testing challenge is met by NOT resorting to physical devices increase but resorting to use of Multi Core Processors and Programmable Gate arrays,or FPGA.This allows us to use the same IP generated (during Design Stages) to leverage in Manufacturing Testing,concurrently.Separation of hardware and software defined test in T&M is great enabler to design compact multifunctional chips and cheaper Quality and Multifunctional devices: Smartphones,Tablets et al.We can dream of having a Smartphone in less than $50, for instance!
Software defined test ( SDT) is driving these designs of new age smart chips and devices made with them.T&M Services are as usual getting challenged by the user and in turn leveraging new architectures to produce and test them in turn! Interesting Osmosi effect at work!
Testing of these complex ICs is done more and more through Software Defined Test or SDT.So the idea is to separate as much as we can the hardware ecosystem of T&M from its Software.Since we want to achieve more and more from the same chip,we hit the physical limits defined by Moores Law (number of transistor doubling every Eighteen Months)the only way out being build the testability at every stage of design and manufacturing!
Since T&M technology has to be smarter and faster than chips under design,the testing challenge is met by NOT resorting to physical devices increase but resorting to use of Multi Core Processors and Programmable Gate arrays,or FPGA.This allows us to use the same IP generated (during Design Stages) to leverage in Manufacturing Testing,concurrently.Separation of hardware and software defined test in T&M is great enabler to design compact multifunctional chips and cheaper Quality and Multifunctional devices: Smartphones,Tablets et al.We can dream of having a Smartphone in less than $50, for instance!
Software defined test ( SDT) is driving these designs of new age smart chips and devices made with them.T&M Services are as usual getting challenged by the user and in turn leveraging new architectures to produce and test them in turn! Interesting Osmosi effect at work!
Friday, March 2, 2012
T&M Impact in India: Mobility,Money,Medicare & Manufacturing!
T&M in India can impact and be impacted likewise by its M factor! The way the mobility is getting accelerated in our lives the T&M industry can get but impacted by them.Featurephones are being replaced by Smartphones and people are getting online even in rural India as well.The traditional services from the drab postal department-the Money Order has potential to be totally replaced by MMT or Mobile Money Transfer.Same goes true for other public services : the Medicare including Maternity related.
All this actually requires cheaper Smartphones, and newer innovative local apps and mass customisations.Local or localised standards and conformance/performance testing by the cheaper testers and field testing etc by even more inexpensive portables.Actually these designs of chips,hardwares have to come from India and these should be manufactured locally to really leverage the huge poential and latent demands.So another M factor Manufacturing comes into picture.Here repeatbility of measurement,productivity,quick test time and Money saving is important!
Where will all these inexpensive,portable,handheld,palmtop testers will get consumed.The Media industry will be one area where field testers should be absorbed in large numbers.My study on the demand elasticity,numbers of instruments and channels of distribution indicates that we CAN have a solid indigeneous powerhouse of an industry selling these testers in India.By way of illustration, a handheld portable Spectrum Analyser for Rs 5000 (up to L Band) and Rs 10000 (upto S band) at an annual demand of 50,000 qty is very feasible! We can extrapolate other instruments like Signal Generator, Power Meter and Signal Generators etc accordingly.
T&M Professionals and Entrepreneurs ! Do you see the opportunity here? If you feel No it is a pipe dream,please shoot a mail or phone in at +919810101238 T&M should be there in your entrepreneurial vision. Nano car or Chhotukool you remember!
All this actually requires cheaper Smartphones, and newer innovative local apps and mass customisations.Local or localised standards and conformance/performance testing by the cheaper testers and field testing etc by even more inexpensive portables.Actually these designs of chips,hardwares have to come from India and these should be manufactured locally to really leverage the huge poential and latent demands.So another M factor Manufacturing comes into picture.Here repeatbility of measurement,productivity,quick test time and Money saving is important!
Where will all these inexpensive,portable,handheld,palmtop testers will get consumed.The Media industry will be one area where field testers should be absorbed in large numbers.My study on the demand elasticity,numbers of instruments and channels of distribution indicates that we CAN have a solid indigeneous powerhouse of an industry selling these testers in India.By way of illustration, a handheld portable Spectrum Analyser for Rs 5000 (up to L Band) and Rs 10000 (upto S band) at an annual demand of 50,000 qty is very feasible! We can extrapolate other instruments like Signal Generator, Power Meter and Signal Generators etc accordingly.
T&M Professionals and Entrepreneurs ! Do you see the opportunity here? If you feel No it is a pipe dream,please shoot a mail or phone in at +919810101238 T&M should be there in your entrepreneurial vision. Nano car or Chhotukool you remember!
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