Citrus Solutions branches toward competitive future

  • 2005-08-31
  • By Peter Walsh
RIGA - The drab Riga suburb of Purvciems hardly seems a likely home for cutting edge technology. But the head office for Citrus Solutions is deceptive. On the outside, it's just another rundown and anonymous gray building. Step inside, though, and you find yourself in a brightly-colored, state-of-the-art office environment.

Citrus Solutions was formed this summer as a subsidiary company of Lattelekom 's the leading telecommunications operator in Latvia. The majority state-owned Lattelekom is streamlining operations in preparation for major changes soon to shake up the industry when Bite, the Baltic state's third GSM operator, joins the fray in the small but lucrative Latvian telecommunications market.

Citrus Solutions was formerly known as the Network Maintenance Division at Lattelekom. Its chief function was to service Lattelekom clients and help them set up and maintain new networks. The decision to establish Citrus Solutions as a separate company was taken to increase efficiency and turn the subsidiary into a more profitable market player, according to Citrus Solutions' executive director Rinalds Sprogis.

"We saw a developing market for building networks and a growing market in construction, and realized that we could put our experience to great use in both fields," he explains. "As part of Lattelekom, all we had to worry about were our expense sheets. Now we are a profit-making operation."

It is certainly a unique arrangement between Citrus Solutions and its parent company, and an extremely practical way for both parties to move forward.

"Citrus Solutions still services Lattelekom clients: they are the bulk of our business. But by being an independent company we have to be extremely efficient and have the scope to reach out to new clients," Sprogis says. "Our first priority since we were established in June was to squeeze costs. A fixed number of people used to service one district, but now the same number of people is able to service more districts. Our people are at the most four hours away from anywhere in the country."

At present, 93 percent of Citrus Solutions' business is with Lattelekom, but the company's business plan foresees it winning up to 30 percent of market share over the next few years.

The company employs some 600 people 's the same number that worked for the Network Maintenance Division under Lattelekom 's but they have been retrained to fit the company's ambitious expansion plans.

"We have to decrease the number of network maintenance staff because Lattelekom wants to spend less and less on network maintenance. We plan to retrain these staff and put them into construction work and other areas."

Sprogis believes that Citrus Solutions is ideally placed to use its extensive expertise to get in on the fast-growing market for building new and ever-more elaborate network systems.

"We are targeting corporate business, mobile operators and the construction industry, which is absolutely booming in Latvia," Sprogis explains. "We already have some major clients, such as well-known equipment vendors and mobile operators. We have an extremely diverse clientele, in fact: our services can range from anything from 10 euros to 5 million euros."

Another lucrative market that Citrus Solutions wants to tap into is that of security systems. Sprogis believes that the company is ideally suited to provide an integrated package of services to its clients, from the groundwork of laying cables to providing their power supply and setting up their security systems.

"We see our range of services as being very interconnected. Our workforce is made up of experts in telecommunications, which makes it very easy for them to apply their knowledge in other closely related areas. We believe that we can offer our clients a one-stop solution: security, power supply and telecommunications infrastructure," Sprogis says.

To begin with, Citrus Solution will mostly concentrate on winning its fair share of the domestic market, yet it also plans to expand internationally.

"We are confident that we can export our expertise abroad," Sprogis continues. "But we don't just want to export our workforce. We want to manage projects and train local people. It means that we can go to any place, set up the network infrastructure, and then train people to maintain it properly."

Sprogis has no doubt that the arrival of Bite will radically shake up the Latvian telecommunications market, but he believes that telecommunication construction companies will only benefit.

"When Bite enters the market this year, it will have to build a lot of towers and containers and it will probably need about four years to fully establish its infrastructure. During the next two years, there will be a demand for transmission capacity in mobile networks driven by mobile content. This means that such networks will be expanded and improved," he explains.

But he believes that Citrus Solutions will reap the benefit of this seemingly never-ending period of telecommunications growth and development. As he optimistically explains: "Citrus trees yield fruit all year round. It's a continuous cycle. That's why we chose our unusual company name."