Telecommunications

February 16, 2007
RAD Data Communication: Another feather in Israel's crown

Geetanjali Babbar

TEL AVIV -- Israel is one of the world’s strongest centers in information technology and telecom. A number of American and European high-tech and IT companies have established R&D centers in Israel including large R&D centers for SAP, Motorola, Lucent, Intel and others. Intel has its second largest operation after the US in Israel, where they’ve developed many of their processors including the Pentium and the new Centrino.

Tel Aviv area is considered the most dense IT area with over 1,000 high-tech companies operating in this vicinity. Though very small in size, there are more than 120 Israeli companies traded on the New York stock exchanges, out of which more than 80 are traded on NASDAQ - the most significant high-tech stock exchange. Companies such as CheckPoint, Teva, Amdocs, Comverse, ECI Telecom, Aladdin and others have market capitalisation of over US $500 million each.

The Israeli Venture Capital (VC) sector is also recovering from its crisis. During 2003, 372 Israeli high-tech companies raised US $1.01 billion from venture investors, local and foreign. In 2005, 378 high-tech companies raised US $1.34 billion from local and foreign venture investors, an eight percent decrease from the US $1.46 billion raised in 2004, but 32 percent above 2003 levels. In the first half of 2006, capital raised was US $764 million, which is a four percent increase compared to the first half of 2005. Hundreds of active start-up companies (more than 1000 in 2004) develop a variety of new technologies, mostly related to information processing, and many in the telecom field.

According to published reports, the telecom market in Israel has undergone significant changes in recent years. The government has steadily sold off the national operator, Bezeq – a process completed in mid-2005. Most segments of the telecom market have been opened to competition, including domestic fixed-line services, while new services such as broadband Internet and VoIP have caught on quickly in the country and mobile data services are also steadily expanding. Israel also has one of the highest rates of mobile-phone penetration in the world, driven by the relatively low cost of usage as well an entrepreneurial culture, an affinity with technological products, strong social ties and the fact that many small businesses use mobile telephony for their communication needs. The number of mobile-phone lines surpassed the number of fixed lines in 1999. Additionally, Israel has the second largest number of broadband subscribers in the world at 1.23 million.

RAD: At the forefront of technology

In 1981 Zohar Zisapel resigned from his position at the Ministry of Defense, and together with his brother Yehuda Zisapel, founded RAD Data Communications. Privately-held, RAD is internationally recognised as a leading manufacturer of network access equipment for data communications and telecom applications.

RAD solutions aim to reduce infrastructure and operational costs while boosting competitiveness and profitability of both mature circuit-based networks and next-generation Ethernet/IP/MPLS access topologies. In a relatively short period, RAD has grown into a group of 15 companies with aggregate sales of US $640 million in 2005.

Most of the company's products are designed and manufactured in Israel itself, however, they have offices all over the world, including India. Total revenues reached US $150 million in 2005, an increase of more than 10 percent over the previous year’s figures, while orders in 2005 rose 14 percent over 2004. This upward trend is expected to accelerate in the coming years as the company rolls out additional product solutions that support multiple services over a variety of physical interfaces and across different network protocols and technologies.

In the 25 years since it was founded, RAD Data Communications has become the cornerstone of the RAD Group. The RAD Group employs nearly 3,500 people globally, of which around 30 percent are involved in R&D. This helps RAD incorporate a broad range of technologies under one roof – their product portfolio spans multiple technologies across a broad product base.

Some of the examples of its technological leadership include US patent grants for its TDMoIP technology to transport TDM traffic over packet-switched networks, new technology to extend the range of xDSL services and a new line of miniature remote Ethernet bridges in an SFP format.

Joint ventures for overseas manufacturing of RAD products have expanded widely in recent years to include the US, Brazil, India, and China. By localising RAD’s production facilities, the company aims to speed time-to-market as well as to reduce manufacturing costs and enhance its local presence in key regions.

This year RAD will unveil the world’s first pre-standard implementation of ITU Y.1731 and IEEE 802.1ag, which define new end-to-end, carrier-class Operations, Administration and Maintenance (OAM) tools for Ethernet networks. These new capabilities enable Ethernet service providers to proactively monitor their service end-to-end, which aim to both reduce operational expense as well as guarantee service level agreements.

RAD India, MRO-TEK: Long time partners

RAD India, the 23rd international office of RAD Data Communications, provides access products and solutions for carriers, ISPs, cellular networks, service providers, and corporate users throughout India and neighboring countries. As a wholly owned subsidiary of RAD, it prominently caters to the Indian market, as well as to neighboring countries.

In December 2005, RAD opened its India office in Mumbai, India. Jayant Deo was appointed president of RAD India. RAD's baseband and HDSL products are the de facto standards for Last Mile connectivity in India, having captured 50 percent of the country's market share and running over 200,000 miles of telecom network infrastructure in India.

Dario Zipris, vice president, sales, RAD, said: "India has been RAD’s second largest market worldwide since 2004, and today it represents RAD’s fastest growing market. RAD India’s principal goal, therefore, is to strengthen the company's established brand image and mind share with India’s telecommunications operators, cellular service providers, utilities, transportation, and financial sectors. With more than 250 access solutions, RAD has a substantial market opportunity to see its presence grow in every sector of India’s rapidly expanding telecom market."

RAD products were first introduced in India in 1991 by MRO-TEK as its authorised nationwide distributor. Since then, MRO-TEK has been providing sales, support, maintenance and repair services for RAD products in India.

In 1996, RAD and MRO-TEK inaugurated a state-of-the-art joint venture in Bangalore's Electronics City. This joint venture is specifically geared for the local manufacture of RAD products tailored to the specific requirements of the Indian market. RAD's products are serviced and repaired by MRO-TEK at its central repair facility in Bangalore. RAD has also authorised MRO-TEK to appoint resellers and channel partners in India for enhanced geographic regional coverage of the market as well as specific industry verticals.

Motti Holler, director, sales, Asia, RAD, said: “More than 100,000 miles of India’s telecommunications infrastructure is supported by RAD products. We have already installed hundreds of thousands of units here. We have also opened offices for Ceragon, RADWIN, RADWare in India to serve the needs of local customers.”

Innovation is the buzzword

“Our customers are most impressed with our ability to come up with new ideas that make their lives easier. We focus on customers’ needs in the present and the very near future. We realise that technological revolution creates difficulties for the customer and we try to alleviate those problems in designing our products. Our solutions are innovative, not just our technologies,” added Haim Karshen, vice president, quality, RAD Data Communications.

Looking Ahead

Not resting on his laurels, Zohar Zisapel  is as ambitious as ever, he wishes to create another Microsoft. “We still have much to do,” he had said in an interview. Zisapel is also keen on branching out into new segments, including video and wireless. According to Zohar, video has a lot of potential to enhance various communications applications, including conferencing. The increasing demand for unwired homes also makes wireless an appealing market segment, he added.