The Dynamics of India

 

 

John Giere: First of all, Frederic, thanks for taking the time to talk with us today. The market in India is quite diverse. What do you see as the major communications market trends?

 

Frederic Rose: Well, thank you John, it is my pleasure. In answer to your question, the Indian market has been experiencing a telecom revolution, driven by socio-economic and political changes after the neo-liberalization. Global players entered, competition grew fierce and end users became increasingly demanding. The last year has seen a month-on-month increase of more than six million telecom subscribers. The mobile subscriber base grows at a rate of more than 80%. The metropolitan cities such as Chennai and Delhi witnessed almost saturated tele-density rates.

 

The tremendous rise in purchase-power of individuals and urban families coupled with developments in segments such as hospitality, transportation, health and defense have created huge opportunities to build telecom infrastructure. Demand for broadband technologies like gigabit passive optical network (GPON) and the demands of enterprises are driving a rising demand for IP transformation and innovative telecom services.

 

Coverage and tele-penetration are also key trends of the Indian telecom market. This makes broadband, especially wireless broadband, a key differentiator in the government’s growth plans for the country. Although Global System for Mobile communications (GSM) and code division multiple access (CDMA) have a long way to go in terms of providing connectivity to underserved areas, a focus on e-education, e-health and e-Government currently demands broadband access and connectivity.

 

Adding to market competitiveness, India boasts minimum call charges and the cheapest handsets. Service providers compete on very low average revenue per user with furious cost competitiveness.

 

 

JG: Who would you say are the major Indian service providers today?

 

FR: If we talk about the major Indian service providers in wireline and wireless today, we can start with the two public giants – BSNL and MTNL. Together they have about 27% of the market. Coming down to the private operators, Bharti enjoys a 20% market share. Next in line are Reliance and Vodafone-Essar with around 15% each. Almost all the operators are turning focus on next generation technologies such as third generation (3G)/ Evolution-Data Optimized, Worldwide Interoperability for Microwave Access (WiMAX), IPTV, Mobile TV, GPON, DSL, Fiber to the x (FTTX), IP Multimedia Subsystem (IMS) or Next Generation Network (NGN). In addition to these players, the mobile GSM market is opening up for some new licensees and together they are expected to add over 100 million mobile subs per annum for the next three years.

 

JG: With India being a key growth market, how competitively are we positioned in the country?

 

FR: Alcatel-Lucent has established itself as a key player in the Indian market. We are being looked upon as leaders in many areas. In the fastest growing wireless space, particularly in CDMA, we enjoy more than an 80% market share. We also supply 75% of submarine telecommunications equipment, 60% of transmission equipment and over 50% of the fixed lines business. We have recently entered the GSM space, and already have close to a 15% share. We are also a significant player in the industry & public sector and the enterprise communications area.

 

 

JG: Innovation and R&D play a major role in the Indian development. How do you see it influencing Indian telecom market trends? How does Alcatel-Lucent contribute to it?

 

FR: A prime strength in India has been the evolution of research, technology and innovation activities. Developments in technology and intellectual property being generated in the country add to the fuel that the region needs to grow further and faster. India’s skilled and competent manpower has rendered the country a key contributor to our innovation capability. Alcatel-Lucent has been one of the first global telecom multi-national companies to start R&D in India. We have therefore been a firm supporter of the growing market needs in the region.

 

Alcatel-Lucent R&D centers in India play a pivotal role in enabling worldwide product development, including testing and maintenance of future solutions and services targeting wireless, wireline and enterprise business segments.

 

Two particularly rich examples of this are Bell Labs and the C-DOT Alcatel Research Center. Bell Labs Research India was launched in October 2004 and is located in Bangalore, India's silicon city. It has already started contributing to Alcatel-Lucent’s solution development like the Laptop Guardian, which is making big differences in enterprise security needs. The C-DOT Alcatel Research Center -- a joint venture between Alcatel-Lucent and the government of India’s Center for Development of Telematics –- is a center for the development of WiMAX Rev-e technology. It focuses on broadband wireless access for rural, urban and suburban regions with many applications. The center has also been involved in many trials in the region, successfully demonstrating applications such as video streaming, high-speed file downloads, Voice over Internet Protocol and web browsing.

 

JG: What’s your view of Alcatel-Lucent’s future in India?

 

FR: Bright! Alcatel-Lucent is driving the most dynamic segments, with growth in new technology areas like WiMAX, GPON and IN services. We have partnered with major service providers. We have also developed powerful positions in the non-carrier space – in particular with the government through our public partnerships.

 

All of these factors fuel a great deal of potential. However, with great glory comes great responsibility. We will continue to concentrate our efforts in service offerings and raise delivery and quality industry standards to enhance customer satisfaction.