FEATURE > Venture Capital

Ordyn Technologies is a telecom equipment manufacturer. Now, what is the space in which this company is involved? This is about supplying telecom equipment to the local carriers, VSNL, AirTel and others.

Look at the big picture: India today is spending 22 billion dollars on telecom infrastructure, every year. You see all these callers, and every day, more and more people are talking on mobile phones. Bharati going to spend 3 million dollars next year and Vodafone is saying they will spend 2 billion; everybody is talking about multibillion dollars of telecom spending. So that is No.1.

Where is all this equipment coming from today? There are different sets of equipment in the value chain. Some of them are switches, and all those that are core equipment comes from Ericsson and Motorola, so there is no opportunity for you there.

But there are sets of equipments and technologies where people have started sourcing locally, because the price points at which MNC's can supply and the local suppliers can supply are different. That means that local technologies are coming into play, and so you have a few suppliers who have emerged.

So the big picture is very clear: there is huge spending. Then the next thing is that there is a demand for local equipment which did not exist 2-3 years ago. You see this local demand happening because of specific nature of the way the industry is moving: telecom companies want to penetrate more and more, so the price of calls is going down, and you are getting a call at 50 paise.

If I need to deliver at 50 paise, then my capital cost has to come down. How do you get the capital cost down without local technologies? Local technologies start to grow. So you invest in a company which is growing those local technologies.

Why this particular company?

This company also has some customers. That means that the products are approved. You know that the products are already working in some of the telecom companies.

This company has been in existence for 5 - 6 years. Along the way, different people have funded this company, there are angels who have funded, and the founders have put in money on their own. Then, there comes a time when everything comes together, and it's the right time to invest.

Can you tell us something about the entrepreneurs?

Ok, when you look at the team - there are 5 people who actually founded this company - and you go back to their backgrounds, you see that they have been in telecom business for 15-18 years. Some of them have actually worked for C dot. If you go back to C dot, C dot is the first exchange that India built on its own, you know in 93 -95 or so.

The team members had been building carrier-class equipments for the local markets at a price points that are hugely competitive, and delivering it over the last 10 years. And in 2001 they said "why don't we do it ourselves?" On top of that, in the past 2 - 3 years, they have built the product and made it work, and also proved to some extent that the product is actually saleable.

They have a lot of passion in what they do, but they don't have just passion alone. They also know what they are doing.