Krone to cash in on Indian telecom market boom

Krone Communications, a connectivity solution provider, focuses on providing network access products for broadband used by telecom service providers. With the likes of BSNL, MTNL, Reliance, Bharti and Tata Teleservices as its major customers, the company is hoping to make strides in the Indian telecom market, says Abhinav Singh

Krone Communications carries a legacy of a bygone era, when the global telecommunications market was still in a nascent stage. The company has transformed itself from a provider of wire termination devices to a provider of connectivity products such as AccessNet (with a focus on providing broadband connectivity through its products) and PremisNet. Krone, a 75-year-old company with 14 years in India, has come a long way as far as capturing the Indian telecom market is concerned.

A listed company in India, 51 percent of Krone’s stake rests with the parent company, while 38 percent is held by the public and the balance 11 percent is held by Keonics (government of Karnataka). The Bangalore-based ISO 9002-certified organisation has a manufacturing facility at Peenya, on the outskirts of Bangalore, with
regional sales offices in New Delhi, Mumbai and Chennai. Currently, the company is generating annual revenues of Rs 62 crore, contributes around 12 percent to the Indo-Pacific region and is raring to tap the emerging telecom market in India. When the company began its operations in India in 1989, India had less than 1 percent telephone density, which has grown to 4.5 percent in the year 2003. Krone aims to provide versatile, reliable and cost-effective connectivity solutions to suit individual enterprise and telecom service provider requirements.

Krone was established as a German firm, headquartered in Berlin till 2001, when it got acquired by US-based GenTek. Functioning as GenTek’s telecommunications arm today, Krone is headquartered in Denver, although GenTek is headquartered in Boston in the US.

Working with a small team

Krone India has not seen a significant rise in the number of employees, just a marginal increase from 116 employees in 1989 to just 125 employees in 2003. Of this number, around 50 employees are based at the manufacturing plant located in Bangalore. This is primarily because the company outsources work to third-party manufacturers and also because it believes in keeping a highly specialised team of telecom specialists in its fold. The annual attrition rate is also less than 5 percent.

Telecom-specific products

Krone deals with two products—AccessNet and Premis Net. AccessNet is targeted at the telecommunications network, whereas PremisNet products provide data networking solutions such as structured cabling, wireless LAN and free space optic solution. AccessNet products are used along with the main distribution framework (MDF) of the main telecom network. Bala K Chandran, managing director of Krone Communications in India says, "Out of the 45 million telephone lines running across India, Krone’s AccessNet products have helped account for about 22 million lines."

Focus on broadband in the AccessNet product space

As part of its new strategy for AccessNet products the company plans to thrust more on broadband delivery. AccessNet products make the network broadband capable and can run on any type of cable, be it the DSL or the Internet cable. Chandran says, "All the new products deliver voice and data on the network. Most of the private service providers such as Reliance, Bharti and Tata Teleservices are already using these products, which make their networks broadband capable, whereas network upgradation is underway for providers like BSNL and MTNL. Hence it is very important to focus on the broadband space." Krone’s AccessNet products are also
certified by the Telecom Engineering Centre. The sale of AccessNet products contributes 70 percent of the total revenues of Krone in India. All the AccessNet products are sold directly by the company in India as their implementation requires special skills, which Krone’s specialised employee pool possesses.

Quality standards for PremisNet products

Another important thrust for the company is to maintain standards such as Category 5 and Category 6 for its products. Chandran remarks, "All our PremisNet products look beyond the latest Category 6 standardisation prescribed for structured cabling by the (Electronics Industry Association) and TIA (Telecommunications Industry Association). We also give an additional five-year warranty of zero bit error on all our PremisNet products."

Currently the sale of PremisNet products contributes 15 percent to its annual revenues. The company is expecting this contribution to double to nearly 30 percent in the next two years as IT penetration is increasing in India like never before. Krone has embarked upon a channel strategy to sell its PremisNet products. It has tied up with eight channel partners who have their own resellers. The company also works with 150 systems integrators, including Tata Infotech, CMC and L&T Infotech. It is mandatory for all the system integrators, channel partners and resellers to undergo a three-day training programme at Krone’s facility in Bangalore so that they are equipped to deal with PremisNet products and are able to provide better service to customers.

Global technology with a local touch

One of the major endeavours for Krone in India has been to give its products a local touch and to make them compatible with the local conditions at an affordable price without compromising on the technology levels. Krone has been taking into consideration the local climatic and infrastructure issues in the country. Its 14-year presence in India is helping in localising its products. Chandran says, "It is important to be local in your approach especially to cater to the rural areas in India, which form a major chunk of the population."

With the Indian telecom market exuding great potential with stiff competition in the telecom space, Krone is banking upon its broadband strategy and quality of products to make a mark in the telecom space. It is also hoping that with a rise in IT penetration in India it will be able to do well in the country in the near future.