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Investment Gains: Telecom upgrade streamlines IDFC’s operations

April 30, 2012
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Incorporated in 1997, Infrastructure Development Finance Company Limited (IDFC) provides financial, advisory  and management services for the Indian infrastructure sector.

It provides corporate investment banking services such as senior debt financing in the form of loans or subscriptions to debentures, mezzanine products comprising preference capital and subordinated debt, principal equity investments in infrastructure companies, and non-fund-based products comprising guarantees for a project’s performance and payment obligations. The company also offers investment banking services consisting of private placements of equity and debt, public offerings, and project advisory to mergers and acquisitions, and institutional brokerage services.

In addition, it provides alternative asset management services, including private equity and project equity investments in infrastructure projects, besides developing, financing and managing infrastructure projects. Further, the company manages mutual fund products for institutional and retail investors.

IDFC also works with various government entities and regulators to provide services such as commercialisation and privatisation of infrastructure assets; corporate advisory services including risk assessment, feasibility analysis, project structuring, financial modelling, and developing appropriate structures and solutions; and state government advisory services comprising project development as well as consultancy services.

According to a report published by the Boston Consulting Group, India, the country’s banking sector is poised to become the world’s third largest in asset size by 2025.

Looking to tap the lucrative business opportunities this growth may entail, IDFC has taken steps to upgrade its telecom infrastructure. The company has been looking to establish a strong communications set-up to streamline operations and stay ahead of competition.

tele.net takes a look at the company’s telecom infrastructure...

Legacy system

According to V.C. Kumanan, senior director, IT, IDFC, the company’s initial telecom infrastructure was developed on a “need only” basis. “Our requirement was limited to supporting internal applications and messaging platforms across various offices. Our internal networks were operating on Cat5 and Cat6 cables,” he says.

However, as its areas of operation increased, the company felt the need to expand its infrastructure. “Between 2007 and 2009, IDFC acquired a mutual fund business, an investment bank and a broking business. With business expansion and multiple acquisitions, there was a need to move into new offices. At this stage, we decided to chalk out a comprehensive network plan to meet our communication-related requirements for the next five years at least,” he says.

The shift

Currently, all of IDFC’s offices (including the core and access locations) are connected via an MPLS cloud. The bandwidth of the MPLS set-up at the core location is 15 Mbps. The set-up accommodates a redundant link as well.

The company’s high-availability internet connection is of 15 Mbps at its offices in Mumbai (Bandra-Kurla Complex) and Chennai, and 10 Mbps at Delhi. The company employs multiple service providers including Tata Teleservices Limited, Aircel and Reliance Communications.

For last mile access, IDFC used an optic fibre network at its core location and Wi-Max at offices situated in remote areas. The company upgraded its local area network, and opted for Cat6 and Cat6E cables, which also included DC links. The Cat6 E cables provided adequate access to the network. IDFC also deployed core switches supplied by Extreme Networks.

In addition, several enterprise, mobility and security applications were used. Currently, the company uses Oracle’s enterprise resource planning platform and database, and the HUB customer relationship management application.

The company built a strong portfolio of mobility applications using various platforms provided by Avaya, Polycom and Microsoft. These platforms included Microsoft Exchange and Microsoft’s Office Communicator mobile software. IDFC also rolled out VOIP across locations for internal communication.

Securing the communications network was a priority for the company. It opted for a multilayered security system, which included Fortigate, Juniper Networks’ Support Secure Access platform, and the RSA internet encryption and authentication system.

Currently, over 1,000 employees and service partners have defined and prescribed access to this network.

Challenges and benefits

According to Kumanan, IDFC faced a few issues while upgrading its telecom set-up. “Bringing all remote locations into the scope of the MPLS cloud was a challenge. Besides, the consolidation of all servers and applications at a centralised location, and building a disaster recovery set-up for critical applications were difficult,” he says.

However, the benefits outweighed the challenges. “The network became more efficient and costs reduced dramatically,” Kumanan says.

The financials also worked to the company’s benefit. “In view of the comprehensiveness of the solution, that is, the clubbing of voice, data and video, we have been able to achieve high availability and save on costs. We have accrued substantial payback on the investment in the network,” he says.

Overall, the telecom upgradation has provided IDFC a competitive edge, facilitated innovations in its products and services, and helped it tap new business opportunities.

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