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05/07/2017

CorCom, interview with Mario Ciofalo (Tiesse) - Too many barriers to made in Italy digital exports

The Chairman of the company specialising in routers and M2M devices: "In 2016 we achieved 20% of our turnover thanks to internationalization. But we have to deal with the barriers put in place by foreign governments. While in Italy the big foreign companies can operate unconditionally"by Antonello Salerno

“Tiesse started international activities a couple of years ago, and in 2016 it achieved 20% of its turnover outside Italy. This despite a number of barriers to entry we found in China and in the US, which significantly complicated our business. We find ourselves playing with a double handicap: that of competing on a domestic market where foreigners do not encounter any barriers, and that of overcoming obstacles when we operate outside Italy. The WTO must be real, not unilateral, otherwise it is not serious. If others defend their own manufacturers, either they stop doing it or our own government must do it too". So says Mario Ciofalo, Chairman of Tiesse, a company that designs and implements, entirely in Italy, professional routers and M2M devices with traditional wired and mobile connectivity, in an interview with CorCom.

 

Mr. Ciofalo, is protectionism really a big obstacle for your business?

On custom projects we can exploit our expertise in dealing with large international organizations which, not having any networking activity within their organization, prefer - instead of attempting to do it on their own - to start a partnership with Tiesse, trusting in our ability to provide networking applications and technologies for mission critical applications, designed in particular to be the basis for IoT-type applications on which we are already specialized in Italy. Internationalization is important to us because the Italian market is small, open to all and without any defense, while when we go to China and the USA, where we are trying to start our sales activity, we find significant barriers to entry. As an example, to sell to major state-owned organizations in China, almost all the biggest players, from telecom operators onwards, can only get involved under two conditions: having a production plant in China and a certification that can only be obtained through specific quango companies. Conditions that make entry very difficult. Here in Italy, on the other hand, anyone can come and do what they want, and compete in a very aggressive way. This is valid for China and to a large extent also for the US, today even more so with Trump's "American first", but more discreetly even before.

 

What kind of welcome does Italian technology excellence find abroad?

Excellent, when we manage to get in touch with local companies. We have an extremely competitive offer. Since 2016, we are an innovative SME, we have reached the stage of a medium-sized company and we have grown significantly, in terms of both employees and turnover: this allows us to make direct investments, all funded by us, to try to enter those markets. For example, in the Enel smart grid project in Puglia, the supply of which has almost been completed and of which we were awarded 90%, we put in place a very innovative and very complex technology, in a very selective tender in which we were optimally positioned from both a technical as well as financial point of view. A technology that potentially also has a big market abroad, but with which we are facing the difficulties I just mentioned.

 

What opportunities can you exploit in Italy from implementation of the Government's Industry 4.0 plan?

In this market segment we have started a development initiative. We have product lines already very well-designed to compete in areas which are disturbed from the electromagnetic, temperature and more generally environmental point of view, with a series of functionalities to provide all the connectivity technologies. They can be configured with all or part of the connectivity on fixed and mobile networks for data transmission. To this we are adding certain functionalities concerning the connectivity of sensors and application functionalities that can be complementary with respect to the specific companies, plants or production environments. We are investing in this field and have started a series of collaborations, working with telecom operators and system integrators specializing in individual sectors.

 

Do you have difficulty in your expansion activities in finding specialized "digital" personnel on the market?

We work with universities, in particular with the Politecnico di Torino, with which we also conduct specific targeted projects, where young graduates are involved: often we hire the best ones. We have also opened offices in Rome, where we have both a commercial branch and a research laboratory, we have collaborated with the University of L'Aquila, and we have a site in Avezzano. Research centres where both young people as well as experts we hire from the market work, so as to have the right balance between new resources ready to develop their experience and experts, who can immediately bring the skills acquired over the years and can use them to help the youngsters grow.

 

What role will 5G have on your development prospects?  How are you preparing for it?

We were the first to have taken routers based on 2G, 3G and 4G mobile networks to Italian telecom operators. We tested our 4G routers in 2012 with all the telecom operators that had a network: we implemented the products in advance by collaborating with the providers of technologies instrumental for the development of these devices. With 5G we are doing the same things to prepare ourselves: we are working with the chip manufacturers and we expect to release our product line in the same way. In this perspective, we rely heavily on the use of our IoT devices, and we have IoT installations, among others, of the order of 150,000 devices installed in gaming in Italy, representing more than 50% of the domestic market. The second segment concerns the routers in tobacconists where, in addition to the gaming of the major industry operators, bills can be paid and other operations carried out that facilitate citizens' lives. The service companies with this network of tens of thousands of operators count on routers with advanced features that ensure transmission efficiency and security.