 Chennai: Altering its original business plan, Banyan Networks, which has a Rs 1.8-crore equity base, is entering a different orbit. While the original mandate was to develop telecom technologies and license them out, Banyan is now getting into full-fledged manufacturing. ''We are getting into manufacturing without disturbing our existing agreements with our licensees. We have a larger interest in seeing that all of us survive. Further, our agreement permits the same,'' says chief operating officer K V Nair. The 45-year-old electrical engineering graduate was earlier with Sify's business development wing, looking after the networks. In 1995, the Telecommunications and Computer Networks Group (TeNet) of the Indian Institute of Technology, Madras (IIT-M), promoted Banyan to get into the wireline telecom segment. The next year, the company developed its first product - a 24-port Ethernet switch - and sold the rights to Acacia Networks, USA. The company licensed Himachal Futuristic Communications (HFCL), Shyam Telecom, Hindustan Teleprinters and the Hyderabad-based ARM to manufacture and market its products. In 1999 the company got an equity infusion from Intel, Sycamore Ventures and IL&FS. The angel investor, Ray Stata, chairman of Analog Devices, converted a part of his interest-free loan into equity. In 2001, the company raised $17.5 million from the stakeholders, barring Intel, when the company was valued at Rs 20 crore. ''The four investors together hold 53 per cent, 33 per cent is held by an employee trust and 14 per cent by well-wishers of the TeNet group.'' Apart from converting its pilot plant into a proper one with test facilities, Banyan has also hired additional space to roll out products like Direct Internet Access System (DIAS), modems, routers, remote access server (RAS), etc. Banyan has obtained the bulk production certificate from Bharat Sanchar Nigam Limited (BSNL). The company will produce goods worth Rs5 crore this year. For Banyan, although RAS contributes to its bottomline - thanks to the increasing demand for corDECT wireless in the local loop (WLL) developed by Midas Communications Technologies, a group company - DIAS is the product that holds great promise. On an experimental basis, BSNL has started offering the 'always-on' (24 hours Net connectivity) broadband service via DIAS in one city in each telecom circle. For Rs 1,800 per month, BSNL delivers 128-kbps speed and does not impose any download restrictions as is being done by cable Internet Service Providers (ISP) and Bharti Telenet. Further, there are no modem costs involved for BSNL customers (See ''). According to Nair, DIAS is the only suitable solution for BSNL and Mahanagar Telephone Nigam (MTNL) networks, which currently have long copper wires running from their exchanges. ''I can say that almost all the subscribers of BSNL and MTNL can be connected to the Net at the same time using DIAS. The same cannot be said to be true of others,'' claims Nair. ''Even if we get 5 per cent of the 40 million basic telephone subscriber base of BSNL and MTNL combine, it is a huge volume.'' Today DIAS has been installed in 13 telecom circles and the product is present in almost all the major exchanges. Though the order quantity is just 2000 lines divided among the 13 telecom circles, Banyan sees it as an advantage to seed the market far and wide. Luckily, BSNL has branded the service as DIAS (direct Internet access service), thereby creating a brand equity for Banyan's product free of cost. Speaking about other products like modem, routers and H Connect an Ethernet bridge, Nair says Banyan will soon be a name to reckon with in these segments. The company manufactures 64kbps and 2MB modems. According to Nair, the company will close this year with a turnover of Rs 20 crore with product sales - other than DIAS - contributing around Rs 4 crore. The company is making profits.
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