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Russian startup aims to boost internet speed significantly

MaxTelCom has developed a new technology for fiber-optic networks.

By Dinara Mamedova, Russia Beyond The Headlines
Dec 25, 2014



Russian startup MaxTelCom has developed fundamentally new fiber fusion splicers that are qualitatively on par with global competitors and several times cheaper. According to the company’s founders, the majority of internet users around the world are connected via copper networks. Fiber has yet to penetrate apartments and offices due to the high cost of equipment, the inconvenience of installation in buildings and its high levels of energy consumption. The new fiber fusion splicers substantially speed up the process of replacing copper networks with fiber-optic networks. This, in turn, means fiber-optic networks will become more affordable and internet speed and quality will rise dramatically.

A unique and cheaper alternative

MaxTelCom believes that the existing devices used to install fiber-optic cables are inefficient. A qualified specialist is needed to work with those devices, which cost roughly $12,000 and require expensive maintenance.
"That equipment weighs between two and 10 kilograms and measures 120 by 160 millimeters," MaxTelCom CEO Nikolai Ivanov says. "Because fiber-optic networks are located in sewers, columns and attics, a team of two or three people is needed to install them."
MaxTelCom’s first experimental model is called Zero. Weighing in at 800 grams, the device looks like a small laptop computer with a touch screen and includes software. In the second quarter of 2015, the startup will conduct beta testing on Zero with the help of 50 Russian and European companies with the potential to become clients in the future. Then, in the fourth quarter of 2015, MaxTelCom plans to start selling its product in France and England. According to Ivanov, one apparatus will cost roughly $3,000-$4,000. It will be able to compete qualitatively with similar products made by South Korean brands Ilsintech and INNO, but it will be significantly cheaper.
"Our advantage is that the device will be convenient, have an understandable interface and any system administrator without a technical education will be able to work with it," Ivanov says. "In addition to that, the equipment will have a removable cartridge designed to perform 500 splicing procedures. Thanks to that, the client won’t have to pay for expensive service maintenance. We, in turn, will derive our main income from the sales of components instead of the apparatus itself."

Investor interest

MaxTelCom has already submitted patent applications to Russian and international patent organizations. The Zero is manufactured in Russia, but the startup imports the components from China, Taiwan, France and other countries.
The project was initially financed by the founders – according to the CEO, they invested $1 million. MaxTelCom has attracted $2 million in investment over the past two years from the Russian Venture Company and four angel investors. The lion’s share of the money went to arranging production and research and development. Throughout 2015 the startup plans to raise another $3-4 million in order to enter foreign markets, primarily France and the UK.
Ivanov says a foreign producer and fusion splicer system dealer will promote MaxTelCom’s product. He declined to provide the name of the company. In exchange, the partner will receive a stake in the startup. MaxTelCom plans to recoup the project costs over the next four years.

The entrepreneurs involved in the startup think the global market for fusion splicers has good prospects. That market was worth $470 million in 2013 and will grow to $1 billion by 2020 as the internet spreads and the number of gadget owners rises, MaxTelCom says. The startup’s potential clients include construction, internet and telecom companies.
According to a partner at the Russian networking agency Sapfir Capital, Alexander Zhurba, the Western market is indeed more attractive than the Russian market for this particular startup project, because it has a high capacity and a greater number of individual and smaller-scale customers. "Of course, MaxTelCom could encounter a number of difficulties on foreign markets, such as in selecting partners, building supplies and technical maintenance and licensing its products," Zhurba says. "However, sooner or later the company will start earning good money abroad."