Nokia takes Sasken stake

Sasken was the first firm worldwide in which Nokia Growth, started in December 2004, had invested, chairman and chief executive officer of the telecom services firm, Rajiv C Modi, told reporters here on Wednesday.

Modi said Sasken will use the money for working capital and business expansion, including potential "merger and acquisition activities." Nokia's investments comes at the heals of a $10 million investment by Canadian telecom equipment maker Nortel.

Intel Capital, a venture arm of computer chip maker Intel Corp., is the other major investor in Sasken having invested some $4 million to date. Sasken, which plans to raise over Rs 100 crore in an initial public issue, will do so "before the end of this year," Modi said.

For the year to December 2004, Sasken earned profits after taxes of Rs 12.4 crore on total income of Rs 167 crore, Neeta Revankar, the company's chief financial officer said. The company's net worth as on March 31, 2004 was Rs 113.75 crore. Its net worth today was not disclosed.

The revenues were split 85:15 between services and products. Sasken provides embedded R&D outsourcing services, including contract R&D, testing and certification of hardware and software that go into various telecom gear.

On the products front, which is currently losing money, Sasken sells "protocol stacks" that go into mobile phone handsets and reference designs for digital subscriber link modems. The "stacks" are the bridge between the phone's user interface and its hardware," G Venkatesh, the company's chief technology officer said.

On the modem, "We build both the software and the hardware architecture of the silicon that goes into the modem. A DSL modem maker liked our product and has licenced it to make the boxes," Venkatesh said. Sasken had taken on competition in Europe to sell its products and was succeeding, Modi said.

The company's investments in R&D averaged some $1 million a year, he said. Sasken had no specific aim to increase revenues from any one business, services or products but a goal to ramp up overall business.

This included boosting margins on the revenue fronts, by targetting more tier-I customers and increasing royalty per unit shipped in the case of moblie phones and DSL modems.

Some two million modems had been shipped with Sasken's products in them and 20 different mobile phone handsets had its protocol stacks in them, Venkatesh said.