Microsense bets on branded hotspots

Microsense, a Chennai-based company that started out as a marketing agent for then state-owned Videsh Sanchar Nigam Ltd, planned to end the financial year with profits of Rs 3.5 crore.

It will be riding a surge in revenues from the company's new wi-fi services business, promoters of the company told Business Standard on Monday.

Revenues have increased from last year's Rs 12 crore to an anticipated Rs 18 crore for the year to March 31, and profits this year were almost a three-fold increase of last year's Rs 1.2 crore. This was largely from the wi-fi services business "" making wireless access to the Internet available in important locations.

Buoyed by the increasing wi-fi business, especially during the last 18 months, the start up has landed a clutch of projects from large telecom utilities to keep the money coming in even as it dreams of a network of its own branded wi-fi hotspots across the country.

"By March 31, 2006, we plan to have 1,000 Microsense branded hotspots," say N V Krishna and S Kailasanathan who along with fellow Indian Institute of Management, Calcutta, alumni, Rajeev Talwar and his brother Deepak Talwar, own the company.

On Monday, Microsense said it would convert into hotspots some 200 Cafe Coffee Day outlets, in a revenue sharing agreement with the coffee chain.

Naresh Malhotra, a director of Amalgamated Bean Coffee Trading Company Limited, of which the cafe chain is a division, said, "We plan to open 100 cafes a year and every one of those will be wi-fi enabled by Microsense."

The two companies were also pilot testing postpaid and pre-paid schemes for their target customers "" mostly laptop toting busy executives planning to grab a cuppa while checking mail. Microsense had its own software to take care of authentication and billing for post-paid customers. Pre-paid customers could buy access for 15 minutes, 30 minutes or one hour for Rs 35, Rs 55 and Rs 105 respectively.

"The services business contributes over 50 per cent of our revenues now," says Krishna. Apart from wireless enabling leading hotel chains, "which have been our mainstay for revenues," Microsense has now got contracts from Airtel and MTNL to set up their hotspots and from various corporate businesses to set up wireless connectivity in their offices with varying degrees of access for staff, visitors and senior management.

Margins too on the services front were higher and the business was likely to grow, with one estimate putting the number of hotspots worldwide at 500,000 by 2010, he said.