May 2022, Business India, Corporate Reports by Mr. Arbind Gupta:
Commtel Networks is a global engineering and technology company which provides high-performance digital communications, surveillance, security, safety, and artificial intelligence (AI) solutions for clients in the oil & gas, power, mining, transportation, and other critical national infrastructure sectors. The Mumbai-headquartered company, founded in 1998, has been at the forefront of engineering intelligence with expertise in executing turnkey solutions – design, engineering, multisystem integration, project management, testing, commissioning, and life cycle management.
Commtel employs 300-odd people and has delivered over 500 projects across four continents, enabling the digital transformation of mission-critical infrastructure for its clients. The company, with offices in India, UAE and the US and customised solutions delivery centres in India and UAE, is also putting up a systems integration centre and a delivery centre in the US. Competing with names like ABB, Honeywell, Siemens, 3W Networks, RigNet, Speedcast and Tejas Networks, Commtel has deployed over 115,000km of dedicated telecommunications (optical fibre) networks, including systems for Kuwait Integrated Petroleum Industries Company or KIPIC (a subsidiary of Kuwait Petroleum Corporation) which is one of the largest greenfield refineries in the world.
The 615,000-bpd mega KIPIC refinery project is being implemented in a phased manner (2019-24). Commtel, which generates around 60 per cent of its revenue from the overseas market, has delivered an Enterprise Integrated Communication Systems package for this large grassroots refinery. It has assumed turnkey responsibility, from design, engineering, procurement, system integration, packing and dispatch. Over the years, the company, a telecom, safety and security systems integrator, has emerged as the preferred vendor for organisations like Bharat Petroleum, Hindustan Petroleum, Indian Oil Corporation, ONGC, Reliance, Shell, Petronet LNG Ltd, Saudi Aramco, Oman LNG and many other players in the oil and gas sector. In the power sector, Commtel has been catering to customers like BHEL, NTPC, Power Grid, Tata Power, NHPC, Adani, KEC, Kalpataru, state utilities and others, while in the transportation space Indian Railways, Delhi Metro, Bombardier and Ansaldo STS are its clients. Commtel works closely with large EPC players (who are also its clients) like Samsung Engineering, L&T, EIL, Bechtel, Petrofac and Yokogawa.
In fact, the company has a client base of over 300 customers across these sectors and has deployed over 100,000 industrial IoT devices and 50,000 addressable nodes. It has delivered projects in multiple locations globally, including India, USA, Australia, UAE, Kuwait, Saudi Arabia, Turkmenistan, Oman, Bangladesh, Sri Lanka, Norway and Ethiopia.
Commtel is currently engaged in providing a complete telecommunications and security systems package for operation and maintenance for the prestigious 2,757km Kandla-Gorakhpur LPG pipeline project, implemented by IHB Ltd, a joint venture of three oil & gas PSUs – Indian Oil Corporation, Hindustan Petroleum and Bharat Petroleum. Constructed at an investment of around R10,000 crore, stretching from Kandla port in Gujarat to the city of Gorakhpur in Uttar Pradesh via Madhya Pradesh, it is expected to be the world’s longest LPG pipeline. The pipeline will facilitate transportation of LPG from the western coast to various demand centres. It will source LPG from LPG import terminals at Kandla, Dahej and Pipavav, and also from the two refineries at Koyali and Bina and will directly link to 22 LPG bottling plants in Gujarat, Madhya Pradesh and Uttar Pradesh.
“This LPG pipeline project is quite strategic in nature and massive in size, belonging to the mission-critical infrastructure space. We are proud to be part of this project. Over the past two decades, Commtel has developed and implemented its three ‘C’ model – Conceptualise-Construct-Care, a unique customer engagement model that governs seamless delivery, encompassing all aspects of the business, from the early stages of design to final deployments, maintenance, and committed support. Over the years, we have built our capability which has the ability to meet the customer’s specific needs. Most importantly, we are known for timely delivery of projects,” says Shriprakash Pandey, 53, chairman & managing director, Commtel.
In the oil and gas sector which contributes 60 per cent to its revenue, the company has delivered over 60 projects totalling to 28,600 km of pipeline telecom systems with equipment across more than 1,100 stations. It has implemented systems for the longest 1,400km pipeline project, East-West Pipeline (48” Dia LNG) and deployed a radio network on the 1,280 kmlong HVJ Pipeline with 35 stations. Commtel has delivered systems for more than six pipeline projects with a length in excess of 1,000km. Besides, it has built telecom systems for a statewide integrated Gas Grid spanning 2,335km and 125 stations. In fact, the company enjoys 55 per cent market share in optical fibre cable-based pipeline intrusion detection systems in India, covering a total of 6,200 km of pipelines.
While the company has significant exposure to the oil and gas sector, over the last few years, it is consciously trying to diversify into other areas like power, transportation and mining in order to create a well-diversified offering. Recently, it bagged a large order from Madhya Pradesh Power Transmission Co Ltd for R77 crore, for executing telecommunications and tele-protection systems for a state-wide power distribution network consisting of over 450 stations.
In order to scale up its business further and get into the next growth phase, the company is building capability in the AI space where it will provide AI solutions to its clients. To be launched by the end of the year, a threat-detection, prediction, and resolution system – CN SHIELD – will use client’s existing data and past experience through AI and ML to build an advanced, artificial intelligence-based physical security management system. The system is a central monitoring, analytical, action-oriented tool that enables secured, high definition, integrated execution and layered detection of threats.
The AI solutions system is built on UAE-based firm Nybl’s ML platform that turns mountains of underutilised data into actionable intelligence. Nybl has developed a framework for codeless development of machine learning models and AI applications. This end-to-end technology platform is industry and application agnostic, making it one of the most versatile ones in the world. In fact, last year, Commtel picked up 10 per cent stake in Nybl.
“CN-SHIELD provides a single pane-of-glass view by generating intelligence from disparate systems and technologies, enhancing the organisation’s response time in managing and closing out a critical incident. Association with Nybl allows us to leverage the complementary strengths of deep industry knowledge and experience of Commtel with Nybl’s AI expertise to help clients use the vast amount of under-utilised data and create better value for them,” says Pandey who believes that this AI solutions vertical will generate over R100 crore from Fiscal 2024 when the company is aiming for a revenue of over R500 crore from the R300 crore at present.
This fiscal year, the company which is also planning an IPO in the next couple of years or so, is aiming at a revenue of over R350 crore. In the next three-four years, the Commtel management is expecting a big expansion in its AI solutions business, contributing almost 50 per cent to its total revenue. Most importantly, the addition will improve its overall business margin (EBIDTA) to over 25 per cent from the current 17 per cent.
“The addition of this AI vertical will provide a new dimension to our overall business which desperately needed some trigger to move on to the next level. This offering will add tremendous resilience and value to our customers’ business. As we are formally launching this business at the end of this year, we are all thrilled to commence our next growth phase,” says Pandey who started Commtel way back in 1998 when the Australian multinational, Olex Cables decided to withdraw its India operation. Pandey who was working with the Australian company as a systems engineer, saw this as an opportunity and set up Commtel with Olex’s small team and its clients.
Thereafter he has never looked back and today Commtel has emerged as a strong player in the business. His continual quest for learning has seen him recently completing a postgraduate programme in artificial intelligence from the University of Texas, Austin. He earlier completed the Advanced Management Program from the Indian School of Business, Hyderabad and the Kellogg School of Management in Chicago, Illinois.
No doubt, Commtel has proved its mettle in the last couple of decades and emerged as a formidable player in the business. However, the last few years have seen its topline stagnating a bit. But now its decision to get into the AI solutions business will ensure that it scales up its revenue significantly, going ahead. In the last few years, the company has also consciously tried to diversify into areas like power and transportation. Moreover, it is also diversifying geographically and ramping up its presence in the US market. Backed by all these efforts, Commtel is all set to start its Journey 2.0.