MRO-TEK ups R&D efforts to boost global presence

MRO-TEK is all set to take a giant leap towards establishing a global presence. The company has made fresh investments of Rs 8 crore exclusively on R&D and is planning to launch six optic fibre products next year. Chitra Padmanabhan has the details

MRO-TEK has invested over Rs 8 crore in R&D and plans to launch six fibre optic products next year, says S Narayanan

The Indian government recently unveiled the National Computer Hardware Policy in a bid to induce competition and bring down personal computer prices. This move is likely to give a major thrust to the computer hardware sector. It is only in recent times that government sops and tax relief measures are being directed towards the hardware sector—a paradigm shift from looking at software alone as a key area. In this context, it vital that attention is focused on Indian hardware companies who have carved a niche for themselves in spite of being ignored by the government as far as easier taxation policies are concerned.

MRO-TEK is today credited as one of the few Indian hardware companies to experience steady growth since 1984. Formed at a time when getting into hardware business was not considered lucrative, the company today is positioned as a last-mile access solutions provider in healthy competition with its Taiwanese counterparts who also have a base in India. The company is all set to take a big leap forward by formulating a global business plan, with Bangalore as its headquarters. As part of this plan, MRO-TEK has already opened business development offices in North America, Korea and Japan, Singapore and Malaysia.

Company financials

The financial figures of the company clearly reflect that growth has been moving in an upward spiral. According to the recent second quarter results, total income stood at Rs 29.30 crore, compared to Rs 21.23 crore for the same period last year. A clear-cut parallel can be drawn to favourable results shown by the company and various other developments within the company. MRO-TEK recently bagged a major order worth Rs15 crore for its 2 Mbps and 64 Mbps high-end leased line modems to connect more than 800 branches across the country.

During this quarter MRO-TEK also launched the FCAT, a modem that interfaces between a fibre ring and an Ethernet network and sits at the basement of a building connecting the fibre point with the Ethernet network that runs within the building. The modem was developed indigenously in its Bangalore manufacturing plant. The company is bullish about opportunities in the metro network space for a carrier-class Ethernet product that is also competitively priced. According to Infonetics Research, the global metro Ethernet market was worth $2.5 billion in 2002 and is expected to grow to $5.7 billion by 2006. The trend also suggests that many major carriers and enterprises in India are considering Ethernet for last mile, which further enhances the demand for last-mile products. “Through these products we have set a target to capture 3-4 percent of the global market in three years,” says S Narayanan, chairman and managing director, MRO-TEK.

During this quarter the company also launched two first-mile access products—FCAT01, a copper to fibre converter, and FCAT02-M, a two-port copper to fibre converter card. These products are meant for carriers and service providers to provide connectivity between Metro Area Networks (MAN) and the Internet. In order to translate its plan into action, MRO-TEK has entered into strategic relationships with Mentor Graphics, Tektronics, Rational Software and Lauter Bach for product design and testing and Agere, Broadcom, Transwitch, Infineon and Delta for sourcing key electronic components. MRO-TEK is likely to be ready to launch new products as a result of these new relationships, either towards the end of this year or early next year—and these products have the potential to take revenues beyond the Rs 200-crore mark by fiscal 2005-06.

With around six new optic fibre products in the pipeline, the company has invested Rs 8 crore in research activities. The R&D section is involved in developing certain ‘first-of-its-kind’ metro access products, which have considerable potential even in developed countries such as the USA, Japan, Europe and Korea. These products will add to the portfolio, strengthening the company’s product offerings. “By doing research and development in India, we get a great price advantage over other players in the same field,” says Narayanan. “With Internet service providers going live on optic networks, demand for first-mile and last-mile access products is expected to go up,” he adds. The company is bullish about the market scenario beyond 2004 and expects 50 percent in revenues from global sales by 2006.

chitra@expresscomputeronline.com