The Hindu Business Line : Kavveri Telecom eyes Rs 100-cr turnover

The Bangalore-based Kavveri Telecom Products Ltd expects its turnover to double this year to about Rs 100 crore, thanks to deals bagged from mobile operators such as Vodafone Hutch, Airtel and Reliance Communications. Kavveri Telecom manufactures antenna and radio frequency (RF) products for the wireless telecom industry.

“We have now tied up with network operators in such a way that our revenues grow proportionately with the clients’ network expansion plans,” said Mr C. Shivakumar Reddy, Managing Director, Kavveri Telecom, at a press conference.

Base station

This means for every base station that a client sets up, Kavveri Telecom would earn between Rs 70,000 and Rs 1.15 lakh. Prior to this, the company sold a fixed number of products to clients.

With companies such as Reliance aiming at a 250-million subscriber base in the next few years, at least one lakh new base stations would have to be erected, he said, adding that the Indian market for antenna and radio frequency products was estimated at about $5 billion (about Rs 20,000 crore).

Jigani facility

To cater to future demand, the company is investing about Rs 15 crore to set up a 40,000- sq ft semi-automatic integrated manufacturing facility at Jigani, about 25 km from Bangalore.

Kavveri Telecom already has three manufacturing units in Bangalore with a combined capacity to manufacture about 2 lakh antennae and 15,000 RF products (such as filters, combiners, splitters, feeder cables and repeaters) a month.

The Jigani facility, to be funded through a combination of internal accruals and debt, is expected to manufacture over three times this capacity and will be operational by March 2008.

The company reported net sales of Rs 18.6 crore for the quarter ending June 2007 compared with Rs 4.6 crore in the corresponding period last year.

Net profit stood at Rs 2.27 crore versus last year’s Rs 65 lakh. Kavveri Telecom’s clients include Motorola, Ericsson, Nokia, Nortel, ZTE and Alcatel-Lucent.

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