org telecom ltd Management discussions

ORG TELECOM LIMITED ANNUAL REPORT 2005-2006 MANAGEMENT DISCUSSION AND ANALYSIS Management Discussion and Analysis Report: a) Sales and Profitability: During the year under review company had achieve a turnover of Rs.36.09 Crores as against Rs.5.98 Crores in previous year showing a remarkable increase of 503%. Company also earned a net profit of Rs.1.54 Crore during the year under review. b) Industry Structure and Developments: Target market for ORG Telecom includes emerging markets of Indian Subcontinent, Afghanistan, CIS, Africa and South East Asia. During last year a tremendous growth has been witnessed in subscriber growth, fuelling unseen growth in telecom equipment. The current trend in these markets is of expansion and subscriber acquisitions. Advances in technology has speeded up adoption of innovative services which further adds to the revenue base of operators. These advances further give impetus to the equipment and service requirement from the telecom service providers. c) Opportunity & Threats: Expansion in the current networks with increase subscriber base is predominantly driving demand for the equipment & services. The increased usages of networks are driving various value added services for increase in revenue. ORGs target of emerging markets of Indian subcontinent, Africa, South East Asia, CIS & Eastern Europe is providing multiple opportunities with green field operators including complete network in managed services mode. Increased requirement of bandwidth and acceptability of IT for business requirements is fuelling demand for connectivity and data services. Emerging markets especially India has attracted global telecom players along with existing local players this pose a threat. ORG is confident with its local presence and existing relationships coupled with product strategy suiting the industry needs should be in position to ward off threats to its existing client base. d) Outlook: ORG furthering its global expansion has expanded its operations in Africa, CIS & Eastern Europe. This has yielded positive results with orders from Africa, and further consolidation from India, Afghanistan and Bangladesh markets. With increased sales and marketing operations ORG is on road to further increase in growth. e) Risk and Concerns: There are multiple players in the market which would keep the competitive pressure on the margins. ORG performance would be related to the geographies where it is operating, and economy as a whole.