lobal Telesystem’s is a case of spectacular transformation for moving up the value chain.

From primarily a seller of customer-end equipment just five years back to a pioneering solution services provider in 1999-00, it is the ideal benchmark for companies wanting to change.

Being still on the transition path to a New Economy company, it has lost out some easy money from low-value businesses that do not fit in the strategy of the new Global. That accounts for a not-so-impressive 16.8 percent sales growth that took the total sales to Rs 625.2 crore last fiscal. One has to go a step beyond to understand the impact of this changed thrust. It recorded a profit of Rs 228.5 crore. If the profit growth rate of 262 percent is whopping, that is not everything. The profit to sales ratio is even more impressive at 36.7 percent.

The maximum share of Global’s sales came from software and Internet application services, which accounted for Rs 319.4 crore (about 51.1 percent). The engineering services division, which now handles multiple big telecom infrastructure projects, accounted for Rs 271.4 crore (43.4 percent). While these figures may be impressive for financial analysts, what is also noteworthy is the number of pioneering steps that Global has taken.

Way back in 1997, Global was talking of e-commerce. Today, it provides solution for procurement, secure payment, EDI, and customer care on the Net. Its service portfolio also includes intranet/extranet solutions, and vertical industry solutions for manufacturing and banking/finance in the B2B domain and for banking/finance in the B2C domain. It is also providing consulting services for Internet-centric ERP implementation.

Another major change is that Global, perceived to be more of a distributor a few years back, now works as an independent integrator. What is really pioneering is Global’s global third-party customer management services. It has been operating an international outsourced call centre at Mumbai. Today, it has all the expertise to move up further by being one of the first Indian ASPs to offer integrated services to global enterprises.

The engineering services division also has its fare share of pioneering efforts. Since as far back as 1994, Global has been building networks for telecom companies. It was one of the first companies to build the Birla-AT&T network for Maharashtra and Gujarat circles with a sub-contract from Ericsson. However, it is fast moving up the value chain here too. Based on the turnkey and software side experience, it is getting into the bandwidth game. It seems it wants to get a foothold in the infrastructure provision business, rather than remain satisfied by merely erecting towers and laying cables. A step in this direction is its signing an MoU with Maharashtra State Electricity Board (MSEB) and Enron to build a fibre optic network across Maharashtra. Another step was hiving off the consumer telecom division. Expanding its software operation, telecom infrastructure business, and Internet related business are on the agenda for 2000-01. Global will also expand its call centre and turn it into an integrated customer care centre.

With added thrust on quality and human capital, and a continuous movement from a position of "closer to the principal" to "closer to the customer", Global Telesystem’s future is bright.