Sarwar Ali Khan is the CEO of TPL Trakker Ltd. and has been associated with the company since 2016. He has over 17 years of experience with local and international companies including Accenture, Samsung and National Bank of Pakistan. He is known for his expertise in strategy formulation and cost optimization.

Before joining TPL Trakker, Sarwar was Global Strategy Manager, Samsung Global strategy group. He has diversified TPL Trakker from a vehicle tracking company to an IoT solutions provider in just under 3 years. Today TPL Trakker has a services suite covering not only tracking but also predictive maintenance, smart generator monitoring, fuel management, smart homes and digital App based solutions. Sarwar holds an MBA degree from INSEAD and BS Computer Science degree from the University of Wisconsin-Madison.

Following are the edited excerpts of a recent conversation BR Research had with the CEO of TPL Trakker:

BR Research: With significant diversification happening at TPL Trakker, what is the company’s portfolio today?

Sarwar Ali Khan: We have three business units today. One is the auto sector tracking business which essentially has been the core of TPL Trakker Limited and also the largest business unit in terms of revenue generation as we have been in this business since 1999.

The second business is digital mapping and location that we launched in July 2020 after our IPO. We are the only company in Pakistan that is licencing data through APIs, and we have seen a very good uptake across different verticals be it banking, financial services, e-commerce, or rapid delivery. To give you an example of our clients, we have signed an agreement with HBL and we are in the process of integrating our APIs with them; in e-commerce, Khaadi is a client and we are in the process of integrating our APIs, and signed an agreement with them; similarly, in rapid delivery, foodpanda is one of the first clients we on-boarded. This is a new business and we have entered our third year of operations.

We collect certain type of data, which is essentially location data or geo-coded business address, residential location data, and road network data all over Pakistan. We have different layers of data in the location space that we license to our clients, and we also do GIS-related custom mapping and custom survey projects as part of this business unit. For example, we have been working with Rain Group, which is a local entity, on a polio eradication drive for over a year where we have been mapping out the polio boundaries to assist in polio eradication. Similarly, we have won contracts with the PTA and other government entities within the maps business.

The third area is the industrial IoT, which is about providing the solution, monitoring, and operational efficiency related to all types of immovable assets like generators, fuel tanks, water tanks, etc.

BRR: How do you differentiate your data from Google maps? What’s your business model?

SAK: The majority of the clients that have started utilizing our maps are companies that have been utilizing Google location data and have switched to our location data. This is a proud moment for us. The way it works is that we have a range of APIs that have different used cases associated with them, and clients utilize different APIs based on their needs. Whenever those APIs are used, there is revenue associated with that API that comes to us.

The way the model works is ‘Pay as you go’ where we have a different tiered pricing structure based on volume, and the billing cycle is monthly. It’s a subscription-based model and a very high-margin business. And over time, we expect our margins to increase because a lot of our cost is fixed. We’ve collected the data and can license the same data to different clients over and over again. That is what enables us to have a high gross margin that increases further over time as more and more of the fixed cost is covered.

So instead of comparing ourselves – a medium-sized company - to a global giant like Google, I would say that we provide hyper-localized alternatives and we bring in a few advantages which are keys for our clients. The first is that we have been licenced by the Survey of Pakistan so we have actual surveyors on the ground that collect and refresh data. We align data collection and refreshing with the priorities of our clients, which provides a great value proposition to our customers.

Second, we can hedge against the currency risk; payments are made to us in PKR, which is a big plus for clients in Pakistan versus Google, especially in the current economic scenario. You have to pay Google in dollars, which becomes much more expensive with how PKR has depreciated against USD.

Thirdly, we are also 30-40 percent cheaper than Google as we offer a cheaper rate per API.

These reasons together show why we have been successful. We have seen good uptake of our services in the last two years, and we have a robust pipeline with good interest. We have our own development team, and hence we can make changes to the APIs as per the requirements of a client.

BRR: Why are no other firms doing what you are doing if it’s a high-margin business?

SAK: From the local perspective, we are the only company that is commercially licencing this data. The only other alternative is Google, which does not give you hyper-localized data as we do. Secondly, the barriers to entry are very high as it requires significant capital investment. We started the development of our location platform in 2017; it took us around 3-4 years to develop this platform with data that has specific accuracy. And the third is that you require a technology platform to be able to serve and license the data. Also, a lot of our time and effort is spent on educating and creating awareness about the utilization, understanding, and benefits of using digital location services in the products.

BRR: What other areas or segments do you think you can tap into?

SAK: I believe that the market need for digital location service comes in where there’s a need for last-mile delivery, route optimization, accuracy in addresses, etc. Then there is a wide range of other applications; we signed a contract with PTA where we are developing a GIS-based tool for the rollout of 5G that maps out the towers and coverage with population densities of these areas and how that will be changing over time. During COVID, we worked with NITB and NCOC to develop a tool for them to visualize and help in smart and micro lockdowns. This project was done pro-bono and we received a lot of recognition and appreciation for it from the CEO of NITB.

BRR: Do you have any plans to go global?

SAK: We have a subsidiary in the Middle East called Trakker Middle East, which was a company we took over around two years ago and was in the same line of business as us in terms of tracking fleet management services.

In the tracking business, we sell tracking devices and then the technician installs them. So basically the sales are made by selling and installing the tracking device. What we are now doing is working on and completing the development of an IoT monitoring platform, which is hardware agnostics that can connect with our hardware device or any third-party hardware device. We are trying to move from hardware focus to software focus. An example of that would be the video telematics solutions that we offer. These are cameras that we install inside the trucks’ cabins or on the roads as well from a safety and security perspective.

We are developing algorithms that can take in a video feed from any kind of camera and be able to raise the same alerts that our own installed cameras used to do previously. It’s moving towards a more SaaS-based business model, which has higher gross margins because we are reducing our hardware dependence/cost and investing in high upfront costs through software and algorithm development. This would help us to sell the solution to any client that has certain hardware specs. The idea behind this was to go regionally through this platform-based approach. It is also why we took over the company in the Middle East as it has existing clients, and we wanted that base to go international – which we hope to do towards the end of this fiscal year.