Flextronics Software Systems Ltd - Stock Valuation and Financial Performance

Flextronics Software Systems originally known as Hughes Software Systems (HSS) was incorporated in 1991 with HNS-India Inc, USA as its principal shareholder. HSS began its operations in 1992 and in 1995 shifted its campus to Electronic City, Gurgaon. Flextronics Software Systems has been renamed Aricent following the acquisition of 85% of the business by Kohlberg Kravis Roberts & Co (KKR) and Sequoia Capital. Flextronics still has 15% stake in the company.

Aricent has 25 offices across 13 countries. Today, Aricent is the world's leading independent communications software company with an extensive portfolio of services and products.

In 2005 the company planned to invest about $100 million in research and an equipment laboratory in the next three years. It launched a development center in Beijing. It also released Wi-Fi Wireless Local Area Network (WLAN) security and mobility software products.

Aricent, based in Gurgaon, will continue to provide software services and products for the communications industry. Aricent provides services to equipment manufacturers such as Nokia and Ericsson, device manufacturer like Motorola, Samsung and Nokia, besides providing comprehensive product offering for all customer types.

History Of the Company:-

1991- Hughes Software Systems Limited was incorporated on 30th December under the Companies Act, 1956 with limited liability, with HNS-India Inc., USA as its principal shareholders.  - HSS has been promoted by Hughes Electronics Corporation (HEC), USA, (which in turn is a wholly-owned subsidiary of General Motors, USA), and its group companies.  - HSS has focused on the development of communications software and is one of India's leading companies in this field. The Company offers both custom software development services and software products, covering a wide spectrum of communication technologies.

1995-  - The Company had speed leased line for Internet access and video conferencing facilities through ISDN dial-up lines.

1997- The Company entered the product business with the launch of the Protocol stack product line.

  - The Company offered implementation and integration services along with its products and also was in a position to customize the product to specific needs.

1998-   The Company set up a center in Bangalore to focus on development  of Software for Internet and e-Commerce applications. HSS has state-of-the-art software development facilities in Gurgaon and Bangalore, India.

- HSS launched its first 3-commerce product SwiftBill(TM), an electronic bill presentment system. The company contracted with a US-based Internet service provider for a pilot of this product 

1999 - The Company issued warrants under the Employee Stock Option Plan to Employee Benefit Trust. A total of 8,75,000 warrants have been issued under the ESOP.

 - In June, the Company issued bonus shares in the ratio of 3 for every 2 shares held by capitalization of free reserves. The total paid up equity capital of the Company prior to this offer was Rs 15,75,00,000.

- Hughes Software Systems is a communications software company which offers software services products and solutions.  It is a 100% subsidiary of Hughes Network Systems of the US.

- Through its maiden public offering, the Delhi-based HSS is offering 43.75 lakh shares of which 39,37,500 shares are offered through book building.  The balance 4,37,500 shares, the fixed price portion, will be up for the public subscription after the final price is arrived at through the book building route which is scheduled for September 29.

  - Hughes Software Systems Limited (HSSL) is the first company in the history of the Indian capital market to issue shares through the book-building route.

  - Its product range includes the Proto Quick range of protocol stacks,  Multi Quick, communication gateway product lines, Intelli Quick, intelligent peripherals and mediation device systems, and Swift Bill, an electronic bill presentment system.

- The Reserve Bank of India (RBI) has permitted Hughes to divest control in its joint venture company, Hughes Escorts Communications (HEC) and offload equity in favour of Indocean Chase Capital Advisor .

2000- Hughes Software Systems (HSS) has mandated Pricewater-house Coopers and Kotak Mahindra to identify and explore possibilities for acquiring information technology companies.

- HUGHES Software Systems (HSS) tied up with the 0-m Teles AG of Germany for its soft switches used in the area of intelligent networking. 

- In the area of network management, HSS has a number of IPRs (intellectual property rights) and products.  The company has a product called Intelli Quick in this domain.  This is in use with Bharti Cellular for Airtel, the cellular services provider in New Delhi.

- HSS developed the soft switches that will enable voice and data to be carried easily over networks.

- HSS products include the Service Node and Intelligent Peripheral under the IntelliQuick (brand name).

- HSS is a leading communications software company offering products and services in the areas of wireless networking satellite-based communications systems, advanced intelligent network, enterprise networking, Internet application and e-commerce.

- HSS launched Right Serve - a Software designed and developed in Bangalore, has taken Hughes to the ASP market.

- The Company has allotted 21,580 No. of equity shares, bearing distinctive numbers 16634701 to 16656280 for employees of the company who have exercised the option of econversion of warrants under the Employees Stock Offer Plan.

- Eximsoft Technologies, signed an MOU with Hughes Software Systems to provide protocol porting services for their global clients on a need basis.

- Hughes Software Systems, a subsidiary of Hughes Network Systems, has launched SwiftBill, an electronic bill presentment and payment solution for the internet market.

- The Company and Armllaire Technologies Inc, US have set up a dedicated development facility at Gurgaon for developing software for next generation switching infrastructure.

- Hughes Software Systems has entered into a global alliance with Sun Microsystems to roll out next generation wireless solutions for original equipment to roll out next generation wireless solutions for original equipment manufacturers of mobile infrastructure.

2001- Hughes Software Systems will set up a dedicated software development centre for Austrian telecoms firm Ericsson Ahead Communications Systems.

 - Hughes Software Systems in strategic tie-up with ADC.

2002- Hughes Software Systems has informed BSE that the Board of Directors of the Company at their meeting held on April 22, 2002 have allotted a total 93425 equity shares to the employees of the Company under the ESOP.

 -Hughes Software Systems (HSS), on June 19, 2002 announced an agreement with NEC Corporation, the world's leading providers of Internet, broadband network and enterprise business solutions, toenhance NEC's routers, switches and IP applications used for building IP optimized backbones as well as edge and access solutions.

- Hughes Software Systems (HSS), announced the launch of its global technical seminar series in the United States of America (USA).

-Jayaram Easwaran, appointed Vice President, Human Resources at  Hughes Software Systems.

2003 -HSS recorded revenue sales of Rs.57.1cr which is about 4.67% decline over the corresponding period.

  -Newport Networks announced that it has deployed HSS SIP & Megaco technology  in the Newport Networks Media Proxy.

  -QNX Software System & Hughes Software Systems announced an alliance to offer integrated solutions to the telecom space.

  -Motorola, Interophase and Hughes Software Systems have unveiled the industry's first open architecture Radio Network Controller (RNC) solution at 3 GSM congress in cannes.

  -Ip.access and Hughes Software Systems announced that Ip.access will use the company's extensively interoperated standards based protocol stack software  for GPRS,SS7 and voice over pocket networks

 -Montavista Software and HSS  strengthened their existing partnership by announcing the enhanced availability of the HSS suite of telecommunications protocol stacks.  -Lucent Technologies selected HSS to provide mobility related development  and support services.

 -HSS announced the successful completion of interoperability testing between Convedia's CMS-6000 and CMS-1000 Media Servers, and HSS softswitch framework & HSS SIP server Framework.

  -HSS and Audiocodes successfully completed the full interoperability Testing of  HSS Softswitch, SIP server and Gatekeeper Network Infrastructure frameworks.

  -HSS was assigned  the Capability Maturity Model Integration(CMMI)  level 5 certification.

  -Hughes System Software, an arm of Hughes Electronics bagged a major deal to supply the software and services for 3G mobile equipment to lucent Technologies, USA.

 -San Diego, CA based communication company Wave Three Software, Inc selected HSS SIP server framework to power its platform for multipoint SIP video conferencing.

  -Rolls out SIP Centrex in Japan.

2004 -Hughes launched next generation broadband terminals.

  -Hughes Software Systems has informed that the securities(Equity Shares) of the Company have been delisted from the Delhi Stock Exchange with effect from January 8, 2004.

  -Hughes Software Systems Limited has informed that the Company received intimation dated January 15, 2004 from James Lucchese, Director of the Company that he has sold 1,325 shares of the Company and the value exceeds Rs. 5,00,000/-.

2005 -Flextronics a -billion global electronics manufacturing services provider, is to build manufacturing facility in the outskirts of Chennai.

  -FSS launches development center in Beijing

  -Flextronics releases Wi-Fi Wireless Local Area Network (WLAN) security and mobility software products.

Products offered by the company:-Aricent licenses more than 125 software products to equipment manufacturers, device manufacturers and service providers, including:-

• Femtocell/Picocell software
• General Packet Radio System (GPRS) Service Node
• IP Multimedia Subsystem (IMS)
• Media Gateway Framework
• Mobile TV (DVB-H) solution
• Music player application
• PacketCable Call Management Server
• SIP Server framework
• Softswitch
• DirectShow Filters for Mobile and PC
• Video/Audio codecs
• Streaming Multimedia Content
• UMTS terminal stack
• ATCA-crnc
•  Voice Call Continuity server
• Voice over Internet Protocol (VoIP)
• Wi MAX ASN Gateway framework Long Term Evolution (LTE),etc.

Clientele:- Aricent lists large telecommunications firms, data equipment manufacturers, device makers, and service providers as clients, including:-

• Airtel
• Alcatel-Lucent
• Alltel, Cisco Systems
• COMVERSE
• Ericsson
• Hughes Network Systems
•  Inmarsat
•  Juniper Networks
•  LG Electronics
•  Motorola
•  NEC
• Newport Networks
• Nokia, Nokia Siemens Networks
•  Panasonic
• Pantech
•  Polycom
• Samsung
•  Siemens
•  Sony Ericsson
• Tellabs
• Texas Instruments
• Virgin Mobile
•  Vodafone.