SAMTEL Global Technologies Ltd. (SGTL)

2.1.1 Background

SAMTEL Global Technologies Ltd. (SGTL) is a joint venture of Backbone Technologies and Wireless Business Systems (Pty) Ltd for marketing software products in Asia Pacific. Backbone Technologies is an innovative solution provider specializing in software for business organizations using GSM (Global System for Mobile Communication) technologies. This company develops their products at South Africa. There are few small marketing organizations around the globe for marketing the products of Backbone Technologies. The head office of SGTL is situated in India. In Bangladesh SGTL has its branch office. SGTL has exclusive license rights for many Asian, Middle East and few European countries (Sweden, Denmark etc.). SGTL was registered as a private limited company in Bangladesh on November 23, 2003 and started its commercial operation on April 1, 2004. The most successful business of SGTL in Bangladesh is to sell their product “Pre-chat”, a solution for electronic voucher distribution of Pre-Paid Air-Time to TM International (Bangladesh) Limited (Aktel). Later on Aktel is using this product with their own brand name “e-fill”.

2.1.4 Core Technology

Backbone Technologies develops all their software related products for mobile phone users. Currently their operation is limited within Europe, Africa, Asia and Australia. In this regions GSM is the most popular technology for mobile phone operators. GSM is the most widely accepted digital system in the world, currently used by over 300 million people in 150 countries (Source: GrameenPhone Ltd., Annual Report 2004). As a marketing organization of Backbone Technologies, all products of SGTL work around Global System for Mobile or GSM technology.

2.1.5 Countries of Operation

SGTL has got the license to operate in Asia only. Their major customers are from Middle east and South east Asia. In Bangladesh and in India they have success stories but in Indonesia, Sri Lanka, Maldives, Myanmar and Nepal they are not yet successful. Now SGTL is trying to market their products to mobile phone operators in China, Singapore and Malaysia.

• QLoad:

This product is developed to facilitate existing customers of “Pre-chat”. Using QLoad one can download PINs (Personal Identification Number) of electronic vouchers automatically from a source using mobile phones. This product is only for bulk customers, general users do not need to use this product. Specially dealers or distributors of any pre-paid related product can download a huge nuber of PINs at a time by using QLoad.

2.3 Major Customers

SGTL’s current customers include TM International (Bangladesh) Limited (AKTEL) for PreChat and a total of seven e-Fill dealers of Sylhet zone like Multi Electric Traders, FriendsTel, EchoTel, Mr. Nazrul Islam etc. for QLoad.

2.4 Market Share

As SGTL is marketing some total new products in local market, the market share was not calculated. On the other hand, only a few software developers around the world is developing products similar to SGTL. In Bangladesh, so far only 5 organizations are offering similar products and other than SGTL only one company got a customer. So it is not wise to calculate the market share right now. The revenue data or complete customer base of these companies is not available due to confidentiality. So I did not make any calculation of SGTL’s market share for this report.

2.5 Financial Information

Every organization keeps their financial data like Total Asset, Total Liabil ity, Revenue etc as a secret and does not disclose openly.  Moreover, financial transactions like sales, support and maintenance with AKTEL are made directly with the SGTL head office in Mumbai, India. So I did not get access to the detail financial data of SGTL. Only expense of the Dhaka office can be estimated, which is approximately Tk. 4,800,000.00 per annum.

2.6 Business Model

Backbone Technologies, the mother company of SGTL has a specific business model. Based on ths model this company comprises a hierarchy of the Licensor (WBS), Licensee Companies and a Distributorship Network managing their own customer base. The licensee companies like SGTL has to buy the license from the licensor to run their operation and to get exclusive rights to sell the products of Backbone Technologies within a territory or region. Under the license the licensee gets few rights within its area of operation which are as follows:

– Establish a distribution network for marketing the products of Backbone Technologies.

– Ensure a constant flow of revenue for the distributors as well as for itself.

– Have access to all future products of Backbone Technologies to make a proper marketing plan.

– Market all the products of Backbone Technologies to end users within the region of operation.

–        Sell Sub-Licenses as per contractual agreement if required to build a distribution network.

–        Getting the rights to run the business with own marketing plans and concepts.

Wireless Business Systems (WBS), the licensor of the products of Backbone Technologies has split the licensing process into two major phases. The phases are discussed below:

Ø  The Launch Phase: The initial phase of a licensing process is called the launch phase. At this phase the licensee builds its own marketing force and has to sell at least one product within the region of operation. Usually in this phase the licensee searches for the potential customers and makes the advertisement to them. The duration of this phase is generally six months.

Ø  The Post Launch phase: This phase starts after six months of getting the license from WBS. In this period the licensee has to build the distribution network for the products as well as use its own strategy for marketing of the products to the potential customers. The licensee is free to make any financial agreement with its distributors to speed up the business. At this phase  financial terms between the licensee and the distributors are normalized.

2.9 Global Partnership Network

There are basically three different organizations behind SGTL which can be called as the mother companies. Backbone Technologies is the organization who develops all the products. But this organization does not do any marketing activities. Marketing of the developed products are done by two other organizations, Wireless Business Systems (Pty) Ltd. (WBS) and SBB Global Software cc. These two companies works in parallel but there are of operation is different. SBB Global Software cc operates in South America and Australia. Right now they are trying to penetrate the products in USA. On the other hand Wireless Business Systems (Pty) Ltd. (WBS) is responsible in South Africa, Europe and Asia. Both these marketing companies treat Backbone Technologies as their development house. Marketing organizations have the power to give licenses in different countries and the licensees can build their own distribution networks by selling sub licenses.  Hence the Global Partnership Network for SGTL is like the following diagram:

2.10 SWOT Analysis

The SWOT analysis of SGTL is discussed below:

Strengths

·         They have introduced some new conceptual software based products in Bangladesh and in this country they are the pioneer to launch some credit related SMS based product.

·         They are working with mobile phone operators and hence can get access to a nationwide dealership very easily.

·         They have developed a number of products for different types of customers. Hence they can grab the market share from different levels of the society.

·         High coordination with the global partners around the world.

·         They have a number of success stories around the globe and can use the historical data and strategy to accelerate marketing tools.

·         Worldwide skilled human resources and all the employees have the access to the global online network.

Weaknesses

·         Insufficient marketing strategy and lack of a professional marketing team.

·         In Bangladesh potential consumers has a little or no awareness on SGTL as well as its products.

·         Small team within the country which may become scarce if the products boom.

·         Provides solutions only over GSM technology, which may become outdated in the near future.

Opportunities

·         Bangladeshi SMEs are not using SMS based services but they can enjoy great benefit from it.

·         As the price of rear end equipments is lowering day by day, product price of SGTL also reduces.

·         The mobile market is still at the growing stage and mass people are still not aware of value added services offered by the mobile phone operators. So there is a huge opportunity to work as a content provider.

Threats

·         As the products of SGTL have a huge opportunity, entrant of competitor is the major threat.

·         Local software developers can make joint venture with Chinese software developers and can import low priced similar products.

·         The products can be sold by the telecom operators as proprietary product to the SMEs.

·         Huge possibility of price war with the existing content providers.