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Q1-10 Geodesic Call: Plans Retail VoIP With Spokn; Simputer Resurrection

geoamida-simputerThe GeoAmida, a low cost computing device previously known as the Simputer, that BSE listed Geodesic Ltd had acquired in 2005 has got a new lease of life with India’s increased focus on e-governance and plans for a National ID project. With the Indian government now focusing on e-governance, the partnerships that the company has struck and the deployments already in place, Geodesic is rather bullish on the segment, and the GeoAmida.

Q1-10 Details: ResultsEarnings CallPresentation

What’s rather interesting is that Geodesic had written off the entire acquisition cost of around Rs. 225 million (or Rs. 22.5 crores) in 2007-08, only for the project to be resurrected. During a recent earnings conference call, the company outlined the opportunity for the Simputer over the next three years:

1. National ID Project: Geodesic has its fingers crossed in this case. The entire pilot of National Identity Card Project was done on the Amida, according to (pdf) Geodesic MD Kiran Kulkarni, who thinks the company is possibly at the forefront after a “successful pilot”. The GeoAmida unit was designed on the basis of the Amida Simputer, with a smart card, biometric senser and a camera.

2. National Rural Employment Guarantee Act (NREGA): The rural employment guarantee plan is the reinstated Congress Governments pet project. Geodesic did not disclose exactly what kind of an opportunity they see in case of the NREGA. They did say that a deal has been struck with a “large Systems Integrator” to be used for the NREGA initiative in Eastern India.

3. E-governance services like the Public Distribution System, e-ticketing, financial intrusions and as traffic control devices. Geodesic has secured e-governance projects of three different states, including a Public Distribution System project from the Bihar Government. During the Q4-09 earnings call, the company said that the partnership they’ve struck with government owned Indian Telephone Industry gets a 30% price advantage in every tender, so they don’t mind sharing revenues.

In the last quarter (pdf), the company also launched a solution for Healthcare, Telemedicine (deal with Care Hospital) and Medical Insurance on GeoAmida to cater to Indian E-Governance initiatives and large private hospitals. However, Kulkarni did warn about unpredictability of government projects: “the opportunity seems very nice and very exciting at this point in time but government projects, you know, they can completely go off tangent and we might just be thrown into disarray.” The company expects government revenue to kick in only in the third and the fourth quarter of this year.

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The other application for the Simputer has been in the rural banking and microfinance arena, where the company has tie-ups with Fullerton and Atom. Geodesic hopes to market market 75,000 units to 100,000 units of the Simputer this year.

Cost & Manufacturing Of The GeoAmida

Last quarter, Geodesic had said the price of the Simputer would range from Rs. 15,000 to Rs. 25,000, depending upon whether the device needed a biometric sensor. For the public distribution system application and the rural banking application, the step-down version would be from Rs. 10,000 to Rs. 15,000. According to Prashant Mulekar, Executive Director, Geodesic, Amida will be more of a designer than a manufacturer. The company will be outsourcing manufacturing to a company based out of Uttaranchal, and does not want to set up a facility. Only if demand grows will they consider setting up a facility.

spoknSpokn As A Retail VoIP Service

Another emerging area of focus for Geodesic appears to be Internet Telephony (also referred to as Voice over Internet Protocol or VoIP). The company, which is believed to have acquired Phonestack (or its technology) sometime last year, has said that it will launch Spokn (on Twitter) this September. Kulkarni expects this to be a major revenue earner for Geodesic going forward.

While termination of calls from a computer on a mobile or landline (Public Switched Telephone Network or PSTN) is not yet legal in India, Geodesic routes calls to the US and takes it back into India. Kulkarni suggests that it is still cheaper, since “a call being made to the US and a call being made back is at 2.5 cents which is still Re.1 approximately, which is possibly slightly lower than the long distance call that you made between Mumbai and Chennai.”

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For the quarter ended June 30th 2009, the company’s Voip offering clocked more than 90,000 call minutes on an average per day. Geodesic has already been providing Internet telephony to enterprises, as a part of its CRM service. During the call, Kulkarni explained how the business works: “if the customer says my monthly bill is a crore of Rupees in terms of communication. So what we were saying is we are very confident we look at the details and look at how many international calls are being made, how many long distance calls are being made, how many calls are being made within the enterprise. Now we go ahead and say – a 50 Lakhs flat free, and make as many calls as you want. That is the kind of reduction we envisage for an enterprise. We will still continue to make 40% of that margin, we can make 40% as and when we completely implement this system.”

A retail rollout is trickier and possibly costlier for Geodesic, but the opportunity, at least in India, lies in the legalization of termination of calls on landlines and mobiles, making it unnecessary for the company to route calls through the US. This will help increase margins. Note that in the South Asia region, Bangladesh has recently announced the awarding of 32 VoIP licenses.

Written By

Founder @ MediaNama. TED Fellow. Asia21 Fellow @ Asia Society. Co-founder SaveTheInternet.in and Internet Freedom Foundation. Advisory board @ CyberBRICS

MediaNama’s mission is to help build a digital ecosystem which is open, fair, global and competitive.



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