How a software pro Sasken turned satphone star

BANGALORE: When Inmarsat Plc, the world’s biggest satcom provider to the maritime industry, wanted to build its own handset at half the $1,000 cost of available phones in March last year, it dialled Bangalore-based Sasken. 

This communication software services firm is not known for its handsets. Though it has been helping Nokia, Samsung and Motorola design their phones, the company has never taken full ownership of one; and this includes hardware design, testing, building applications and finally earning a royalty fee every time a new unit is sold.
With nine satellites, Inmarsat wanted to capture the market for voice calls by developing a low-cost phone. But the challenge was to replicate the features of a normal mobile handset to ensure ease of use at an attractive price to customers. After considering various options, including building its own phone, Inmarsat hit upon Sasken. 

“It was a leap of faith on their part. For us too, because there is no history,” says Sasken chairman & CEO Rajiv C Mody. Today, nobody is complaining. Sales of the Sasken-built satphones are rising at a record pace and estimates for the current year have been doubled to over 80,000 units. Inmarsat officials say Sasken has helped open a new market and disrupted the global market for satellite phones. 

“For the first time, they were combining their software capability in Bangalore with their hardware teams in Finland and designing a complete product for us,” says Johny Nemes, senior director (handset programme) at Inmarsat. The news must be music to the ears of Sasken shareholders. The company made its stock market debut in September 2005, when it listed at `400 per share, an over 50% premium to the offer price of Rs 260. 

Since then, the shares have plunged as Sasken struggled to cope with the downturn in the global telecom and IT industries. The company was forced to offer minor stakes to Intel and Nortel in an attempt to persuade them to continue business. Lenovo, which asked Sasken to build a new mobile platform, called off plans to enter the Indian market, forcing Sasken to write off Rs 40 crore some years ago. 

Sasken shares closed at Rs 196.60 on Monday, down 0.28% over the previous day’s close. They are down 12.63% from the year high of Rs 225.65 in April but have recovered 55.11% from the low of Rs 127.10 in November last year. Once considered to be the next big thing in Indian IT, Sasken also suffered because of its over dependence on semiconductor customers, and some bets on technologies that did not work out the way anticipated. 

“In 2005, when they got listed, Sasken was the next big thing of Indian IT, unlike a typical software services company they are more focused on high-end IP creation. But a lot of that ‘poster child’ image has faded, especially after the telecom meltdown,” says an analyst at a Mumbai-based brokerage firm. “This could be the revival opportunity Sasken has been looking for,” he adds.


Courtesy: The Ecnomic Times