Alliance To Tap Asian Atm Switch Market

The two companies told reporters that the three-year partnership would allow Singapore-based Datacraft to supply high speed switching technology made by their US partners to customers across the emerging markets of Asia.

The companies had targeted the large telecommunications carriers of China, Taiwan, Singapore, Malaysia, Thailand, India, Hong Kong, Indonesia, the Philippines and New Zealand for their products, they said.

Des Althorp, managing director and chief executive officer of Datacraft, said the partnership was likely to be worth tens of millions of dollars to both firms over the life of the contract and could involve very much larger sums.

If you want a simple figure (for what the deal is worth) you can say US$30 to $40 million, Althorp said.

 

The partnership covers the supply of Asynchronous Transfer Modes (ATMs), highly advanced data switching machines made by General DataComm allowing fast transmission of complex multimedia communications for things such as video conferencing.

Ross Belson, president and chief executive officer of General DataComm, said demand for ATMs was rising quickly as telecommunications companies provided more and more sophisticated services.

Traffic on the Internet, for example, which carries high volumes of sound, video and graphic data, was doubling every nine months, straining its capacity and exposing the fragility of the infrastructure, he said.

But the introduction of ATMs would allow capacity to expand.

ATMs will soon be the backbone of the Internet, he said.

Belson said the current worldwide ATM market was worth US$600 million, of which Asia represented five to 10 per cent.

But by 1998/1999, we think the ATM global market will be US$2 billion, Belson said, adding that by the year 2000, Asia would represent 25-30 per cent of the total worldwide ATM market.

General DataComm currently dominates the international ATM market with a 38 per cent global market share and hopes to gain a similar share of the fast-expanding Asian market, he said.

Currently about 10 per cent of our revenue comes from Asia and over the next several years were looking at it becoming 25 per cent. This is our area of most rapid growth for the company, said Thomas Garofalo, General DataComms vice president for sales in the Asia-Pacific region.

He said the alliance with Datacraft would be the key to General DataComms expansion in Asia.

We have set a target for fiscal year 1997, that half our revenue in the region would come through ATMs, the majority through this agreement, he said.

Althorp said the partnership should allow both companies to expand in the region.

We hope to get a 30 per cent market share for ATMs here in Asia, the same as General DataComm has already achieved in the rest of the world, he said.