Atm Sales Record Uptrend

After a marked slowdown during 1997, sales of Automatic Teller Machines (ATM) have swung back to their usual high growth path during the current year.

If the sales of 212 ATMs during January-August is any indication, a 100 per cent growth appears to be well within striking range during 1998. The recovery in demand has come about at an appropriate moment for ATM vendors, currently engaged in fierce price war.

Competition and undercutting have hammered ATM prices down by about 40 per cent as more players have entered the market.

With demand picking up, vendors are once again gearing up to cash in on a widely anticipated boom. According to industry sources while ICICI Bank is finalising a 50 machine order, the State Bank of India plans to add another 25 ATMs. The Indian Overseas Bank and the Dena bank too are contemplating buying a dozen ATMs soon, the sources added.

Other lesser known banks like the Saraswat Co-operative Bank, Janata Shakari Bank, Bangalore Central and Amarnath Co-operative are also seen making purchases.

"We expect the ATM population in the country to touch the 1000-mark by the year-end," said Harish K Murthi of Diebold HMA, a company with a 60 per cent plus share of the ATM market.

This will translate into a sales of about 400 ATMs during 1998. During the first eight months of the current year, 212 units have already been sold.

Traditionally the last four months account for the bulk of ATM sales during a year. During 1997, the industry had sold only 193 ATMs, a growth of less than five per cent over the previous year's sales.

Since the late eighties many new players have entered the ATM assembling business. Today there are seven players, Diebold, NCR, Cats, Bull, Aplab, Siemens, and Olivetti.

"Undercutting has pushed ATM prices down to about Rs 12 lakh per machine from the Rs 20 lakh plus during 1994,"' Murthi added.

Though import duties on ATMs have dropped from 120 per cent to 76 per cent, the steady depreciation of the rupee against the dollar has more than wiped out any benefits from the lower duties. Most ATMs are imported as kits and only the assembling is done here.

ATM vendors are still, however, willing to slash prices in an attempt to achieve larger installation bases. For a larger base will translate into more service revenues.

"Typically, service income from ATMs range from eight to 10 per cent of the sale price," says P P Manjunath Rao, senior manager (marketing and operations), Diebold HMA. With local ATM prices almost on par with international tags a further fall is unlikely, feels Murthi.

"During the next two years most banks would have computerised operations. This will lead to a surge in demand," predicted Murthi.

After 2000, Diebold HMA expects annual ATM sales to be in excess of 1000 machines a year.