Press about Race: In a few years we will be able to dictate our terms to operators.

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Interview; Leonid Lopatin Managing Director of Race Communications

- Race Communications is known primarily as a system integrator. Why did you decide to engage in a non-core business for you related to navigation and telematics?

- It is precisely because of the non-core nature of such a business for system integrators that we came into it: a new market is always relatively free from competition. In the mid-90s, the sale of equipment and the construction of networks brought significant profits to system integrators. Now this market is oversaturated, revenues from traditional activities are declining, profits from the implementation of even large and complex projects do not exceed 10-15%, which, taking into account the timing of the projects themselves, corresponds to an annual profitability level of 25-35%. And it is also not possible to compensate for the number of projects. Accordingly, we have to look for new niches that have not yet been "trampled" by other companies.

- Until now, mobile operators have been very successful in developing their business themselves, without the help of system integrators. If mobile operators, using their huge resources, seriously take up the development of telematics services, will smaller IT companies be able to compete with them?

- If they take it seriously, they won't be able to - this is a fight in unequal weight categories. But here it would be appropriate to ask another question: are the operators themselves interested in such competition? Partnership can carry more than rivalry. After all, the market we are talking about functions quite differently from the traditional mobile market . Don't forget, we are not talking about selling finished products, but solutions. The main consumers of navigation and telematics services are corporate clients. The technology is the same for everyone, and its fields of application are different. It is clear that banking structures and, for example, shipping companies have different requirements for such systems . Accordingly, solutions for them need to be developed differently. And mobile operators, as a rule, do not face this. They themselves use ready-made technological solutions and offer subscribers a mass unified product. But system integrators are constantly engaged in solving such problems. In the luggage of the system integrator there is a database of large corporate clients, which is the dream of any telecom operator to reach. As a result , each side receives its own benefits.

- How, in your opinion, will the structure of sales of telematics and navigation services to the end user be built in the future ? Who will deal with it - a mobile operator or a system integrator?

- Sales should be massive. That is why we are going to a "boxed" telematics product sold by dealer networks. But to create such a product , a fundamentally new type of companies for Russia and for other countries should enter the market - telematics operators. Roughly speaking, he takes some solutions, equipment and programs from the system integrator , a communication channel and customers from the operator, and then brings a ready-made service to the market under his brand. The prototype of the telematics operator is already there are - these are all kinds of reference available to subscribers of networks. But their level of development - both organizational and technical - is rudimentary. The lack of a systematic approach and a single technological core hinders the development of such services, and their. the current contribution to the operator's income does not exceed 10%. I think with our arrival, the situation will soon begin to change.

- In your opinion, what place will the profit from the provision of new services take in the revenue structure of operators and their partners? - It is difficult to judge this now, at least if we talk about the mass market. While the tariffs for telematics are the same as for regular SMS and GPRS services, it is premature to talk about any excess profits. Special tariffs for new services are still being developed by operators. My forecast is that in the coming years, revenue from telematics and information services will exceed the threshold of 25%.

- Almost all mobile positioning systems use GPS satellite navigation technology, which is still subject to in Russia, there is a strict procedure for "roughening" indications, certification and licensing. How much does the "illegitimacy" of GPS hinder the development of the market for new services?

- There is such a problem: in Russia there are still restrictions on the use of GPS, which have long been lifted in the rest of the world. Accordingly, this forces users (both private and companies) to obtain special permissions. Unlike a mobile phone, a person cannot come to the store, buy a GPS receiver or a system based on it, put it in his car and start using it on the same day. Obtaining a permit is a matter of at least two weeks. Naturally, there are agents who help solve the issue of permits for an additional fee. This is at least uncomfortable, this is not done in Europe and around the world. Until the issuance of GPS permits is abolished by law, the navigation and telematics services market will not function in full force.

As for the permissible accuracy of determining coordinates on the ground up to 30 meters, then this "coarsening" is not a problem either for us or for customers. 15 meters back, 15 meters forward - it doesn't matter for a heavy truck on the highway. And in the cities we work together With Megafon, we will implement a project on cellular navigation using base stations. There are no problems with GPS certification here - the mobile phone itself is the navigation terminal. The accuracy of the work of such systems is very high, the error in the calculation of coordinates is no more than 50 meters. At the same time, the service does not violate any user rights. To use the service, you need to download special software to your phone. Whether to do it or not is up to you. naturally, to the subscribers themselves.

Recorded by VALERY KODACHIGOV Kommersant (Moscow), 16.05.2003, No. 083, p.20

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