Security solutions firm Zicom Electronic Security Systems Ltd, that sold its institutional and government projects business to French firm Schneider Electric, is venturing into managed security services to telecom operators/telecom infrastructure providers for their Base Tower Stations (BTS) and other assets by forming a subsidiary.
In the first year, it is targeting 20,000 BTS out of around 3 lakh BTS installed in the country at present. The project will incur investment of around Rs 150 crore.
Part of the cash generated from the Schneider deal will be deployed for this venture, said Manohar Bidaye, chairman of Zicom Electronic Security Systems Ltd.
Although telecom sector has been witnessing a slowdown due to high competition from new players and cut throat pricing that has affected revenues and margins, tower security business could come as a stable revenue generator for Zicom.
Zicom is also acquiring the retail security business of its wholly owned subsidiary Zicom Retail Products Pvt Ltd.
Early this year, Schneider bought the building solutions group and special projects group of electronic surveillance systems maker Zicom for Rs 225 crore. This business focused on government and institutional sales of security systems and accounted for around half of Zicom’s annual sales.
The company had explained this sale as it was highly capital-intensive business with a long gestation period making it an unprofitable proposition in the long run. The firm had earlier said proceeds from the sale will be utilised to retire debt and finance a foray into new industries, including renewable energy and aerospace engineering.
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