Telecommunication Consultants India Ltd (TCIL), despite a 15.8 percent growth, lost its #4 position, which it had maintained for last two years. The fourth public sector unit in the Top Five registered a total sales of Rs 740 crore compared to last year’s total sales figure of Rs 639 crore. Modest sales growth notwithstanding, profits growth was double at 31.8 percent. TCIL recorded a net profit of Rs 58 crore, in comparison to last year’s Rs 44 crore. About 55 percent of the revenues came from abroad.

TCIL has moved into many different areas now. But there seems to be no coherent approach to its diversification plans. While diversifying into software for quick cash is a strategy adopted by many Indian companies, TCIL also has a cable manufacturing JV in Tamil Nadu Telecommunications and has entered into communication services business. While one might question the rationale behind entering this arena, what seems more surprising is the fact that all these service ventures are quite isolated from each other and will, hence, provide little strategic advantage. It is bidding for basic telecom services in Bangladesh on Build-Own-Operate (BOO) basis, in partnership with MTNL and WorldTel. It is also targeting Nepal and Uganda. It is also planning to become an ISP, for which it has a JV with JMS Worldwide. For the moment it is on the look out for an Indian partner. In 1999-00, it also entered into a partnership with Thuraya to provide GMPCS services in India. Sources reveal it may also set up an Internet gateway with Thuraya. Nothing has been heard about its foray into DLD services in partnership with Ircon, since the day the railway minister decided to go for open bidding of the Railways’ Right of Way.

Presently, TCIL is executing projects worth about $250 million abroad. These include a $15 million project in Mauritius, a $10 million project in Kuwait, a $19 million project in Malawi, a $50 million project in Ghana, a $45 million in Zimbabwe, and a $18 million project in Saudi Arabia. In India, it is executing a $60 million project from MTNL, and has commissioned the SCADA network for ONGC.

TCIL, despite having solid engineering and technical expertise, has not grown the way it was expected to. It has not been able to leverage on its international experience to bag major projects in the booming Indian turnkey business. Internationally though, the company did well by focussing on the technically under-developed and developing countries to get a foothold in the international market. It has not been able to expand into markets in the West and Asia Pacific. This is because, even today, it bags most international projects competing on cost and has not really been able to move up the value chain. It is difficult to believe that it will continue to register the same growth that it did a few years back, unless it gets more focused.

The toughest challenge before the company, however, is to be successful on the domestic front. While the Internet services project is yet to take off, the turnkey business is also restricted to the government sector. The primary reason for its not
succeeding in the Indian market is its lack of marketing effort. TCIL needs to develop this strength to succeed in India. With the DLD market opening up, it has to do that sooner, rather than latter.