Energy conservation is the future

Do you have any personal ties to India?

Alexander Krasovsky: Sure. My father was a Yoga enthusiast and tried hard to get me interested. I even learnt a few asanas, but then took up boxing and pentathlon. All the same, the cultural ties between Russia and India had a distinct impact on my formative years. I was brought up on Indian films. I watched Sholay about fifteen times. I can probably recall some twenty Bollywood movies that I enjoyed most as a boy.

The friendly relations between India and Russia have even helped me avoid some trouble. During one of my first business trips to India, I asked my driver to take me to Agra to see Taj Mahal, one of the seven wonders of the world. But on our way from Delhi we passed the scene of an accident. Our car arrived shortly afterward, but locals blocked off the road and were about to take their anger out on other passing drivers. Luckily, an elderly Indian spotted my T-shirt with "Russia" printed across it and asked me if I came from Russia. When he heard that indeed I was Russian, we were allowed to drive on.

Let’s get down to the business side. It was recently announced that Russia and India may use Sitronics facilities to launch joint projects. What is the current status of that cooperation?

A. K.: First I would like to point out that Sitronics is a large company doing business in 30 countries around the world and exporting its products to 60 countries. We have our own high technology production in Russia, Greece, and Romania, and strong R&D centres in the Czech Republic and Russia. We see India as more than just a big market. Russia and India have many things in common that contribute to a more intimate mutual understanding and therefore a more rewarding relationship.

Of course, the main factor that we have in common is scale. Our countries have vast territories with irregular infrastructure coverage, gaping digital divides, and complex multi-layered government systems. Solutions expected from such an advanced, high-tech company as Sitronics should address the large-scale infrastructural needs that our Indian colleagues demand.

Our joint projects already underway in India or still in the works are designed exactly with this mission in mind. We are well positioned, with extensive experience on the large Russian market, the appropriate technology and proven solutions. For example, we produce 300 m electronic tickets with imbedded chips for public transport, our billing systems support around 140 m mobile telephone subscribers, our SIM cards are used by all major Russian mobile operators, and major Russian banks place orders for our chip-based bank cards. So we offer these and other products to our Indian customers. For example, our billing solution is already used by Sistema Shyam TeleServices, thus helping service up to 100 m subscribers. We have begun delivering electronic transport tickets and are ready to deploy a city traffic management system as part of our larger Smart City package.

Many people believe Russia is backwards when it comes to high technology? Is that really so?

A. K.: Indeed, the Russian microelectronics industry struggled through a 15-year slump. But in the recent 3-5 years it has made significant progress thanks to support from both JSFC Systema and the Russian government. Today Russia has its own very advanced microelectronics production base and is one of the leading chip producers.

Many people may find it surprising that our IC chips are sold by the tonne to China. It experiences a shortage of chips and local manufacturers buy our products and use them in their own solutions, integrated circuits and household appliances. The quality of our chips is as good as that of foreign ones. We have a modern production facility in Zelenograd, near Moscow, staffed with highly competent professionals who completed their training in France.

In terms of our market strategy, we have found the right segment and focused on industrial customers who need 90-180 nanometer chips. So far, we have produced only 180 nanometer chips that are in great demand. 90 nanometers is the smallest chip size used for various industrial applications in cars, avionics, or navigation systems. We haven’t yet launched the 90 nanometer production, but it will be our next step at the end of 2011.

Alexander Krasovsky, vice-president of sales at Sitronics, the largest high-technology company in Eastern Europe

Do you have any localisation plans for India?

A. K.: We don’t have anything planned at the moment for microelectronics, although Sitronics has other activities that potentially can be localised. We have held a series of talks and plan to set up a new billing centre in India.

Sitronics has its own billing technology for telecommunications and utilities. It was developed in our R&D centre in the Czech Republic and further fine-tuned by our Russian R&D team. Billing software is one of the most complex types of software, and its development and maintenance take a lot of effort. It is the heart of any mobile operator. The system continuously evolves and should promptly respond to changes in the operator’s business strategy and tactical moves. Therefore a dedicated software development team should constantly upgrade the system with new releases and patches working closely with the operator staff.

When we came to India and began offering our billing solutions we succeeded following a tough tender to sell it to Sistema Shyam TeleServices. Having said that, it was made clear to us that to grow our business in India, we must bring in an Indian software partner to bring our billing system in line with local needs. This way, the Indian provider secures a guaranteed quality of service to its subscribers, and such an approach deserves respect. Hence, the decision to create our third research and development centre in India.

What markets do you target with the research and development centres?

A. K.: Besides India, we are currently offering our billing technology, and in some countries we have already installed it and are providing after-sales maintenance services, in Vietnam, Venezuela, Uganda, Iran, Czech Republic, and the Congo. This is a broad audience and truly global business, and we keep looking for opportunities to expand our sales geography.

Can you give any statistics to quantify your cooperation with India?

A. K.: Over the last year and a half alone, we landed over 200 m dollars in deals with our Indian partners. These include delivery of radio-relay systems, billing software, etc. For example, we earned several million dollars on sales of the so-called RUIM cards. They are the equivalent to SIM cards in GSM networks, but are designed for CDMA mobile standards. We are the sole supplier of these cards to Sistema Shyam TeleServices.

We also sell other manufacturers’ products. After opening our office in India, we created a broad partnership network that includes western companies operating on the Indian market.

How high does India rank among your other sales markets?

A. K.: As I said, we have a pervading market presence. We have an active presence selling our products in 60 countries. Of course, Russia is our number-one market, but India is one of our top international priorities. Our countries have so much in common that Sitronics and other Russian companies offering infrastructural solutions would be absolutely justified in their commitment to build visible and serious presence in India. We are confident in our understanding of the local market and consumer mentality, and expect that India will be introducing complex, but very important projects for raising the quality of life, such as Electronic Government and Secure City. That is why we have our representative office in India to facilitate contacts with local customers.

What other markets are appealing to your business?

A. K.: We are coming up to speed in Venezuela. So far, everything has been going as planned; we are completing our first two contracts and will also open our representative office. In Venezuela we plan, together with the Russian Ministry for Emergency Situations, to set up an emergency warning network. Similar projects have been deployed in Moscow and a number of other major cities in Russia.

Our Venezuelan office may provide a springboard to expand the business into the greater market of Latin America.

Africa is another very prospective region for Sitronics. We are actively involved in projects with GSM operators in Uganda and the Congo. These were long and challenging projects; our staff came down with malaria and it took a long time to adjust to local government practices, but we learnt how to work there, got two projects, and provided mobile network equipment and the billing technology. Some of my co-workers just returned from South Africa. They took part in the Africa Com 2010 congress, which brought together all African telecom operators and where we did some good scouting. It showed that there is also a lot of business potential for Sitronics in Central and Northern Africa.

What other projects, apart from the R&D centre, do you have in mind for India?

A. K.: We are currently testing a Sitronics intellectual video security system in a pilot zone of the New Delhi metro. If the pilot project is successful, we hope for a government decree to install the system on a larger scale.

Another issue that both Russia and India have in common is terrorism. We can offer effective and, in some cases, unique security solutions. But before we have the deal, we have to bankroll a pilot project in India. This is often a very expensive arrangement, so we have to negotiate and involve partners to share the cost. We are talking to Indian state administrations and some municipalities, offering our solutions. The potential market for such systems is substantial.

For operations across a large and patchily developed territory it is critical to have access to such technology as Daterium mobile data centre. We have already sold our first MDC in India. Imagine a standard 20-feet container fitted with sliding mounting racks that can carry all the network and communication equipment, servers, firefighting system, climate control, and next to it is a diesel generator. It’s all a turn-key job. All the equipment can be manufactured in just two months and delivered to any site on the planet with temperatures ranging from minus 55 to plus 55 Celsius. No need to construct or outfit a special building. This packaged solution is in great demand, especially in India, where construction and land allocation can be challenging. The system was developed in conjunction with the state nuclear corporation Rosatom and is manufactured in Sarov, a major Russian nuclear technology centre. In Russia, orders for such data centres have come from the Ministry for Emergency Situations and oil companies. Similar containerised solutions are also offered by IBM and others, but they are four times bigger and four times more expensive. We do it at a cheaper price, but the quality does not suffer.

As for our unique offers, I should mention a tool for monitoring traffic based on the GLONASS system, to which India has also subscribed. The monitoring system is called Nika. The sales have already started.

What technologies have the most potential today?

A. K.: Everything related to energy-saving. One of the solutions that we have is about managing smart meters for water, gas and power consumption. This is actually part of the Smart City project, for which we supply microelectronic components for utility meters and software to control them, collect and integrate data. Smart meters can be used to monitor utility services in real time and optimise associated costs both for consumers and providers. For example, the system allows a utility provider to remotely control consumers’ power network in case of power disruptions. This is an important feature for mitigating risks of man-made or natural disasters and terrorist threats. In case of a power plant failure, this system will help avoid a total blackout by cutting off only the biggest loads and maintaining power supply to lighting and communication systems. Such a project, however, will not be easy to roll out. India does not have the necessary legal framework to regulate these operations. I know a story about an Indian businessman who recently installed such meters in a city, but they have been simply stolen or vandalised and nobody was punished. Innovation takes a lot of painstaking effort including education of the public.

Do you plan to acquire any production assets abroad?

A. K.: We have enough of our own. We have capacity in Russia, Romania and Greece that satisfies all our needs. But if we spot any opportunities and markets for creating value, acquisitions may be back on the table.

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