Alcatel-Lucent has bagged several large contracts in India over the past few years and has identified various strategic areas for possible future growth. tele.net spoke to Rajeev Singh-Molares, president, Asia-Pacific region, AlcatelLucent, about the opportunities the company foresees in India and its business strategy in the country...

What have been Alcatel-Lucent's biggest milestones in the country in the past one year, including key contracts?

Alcatel-Lucent signed two important deals in the public domain, one with Reliance Communications (RCOM) in 2008 and the other with Bharti Airtel in 2009. These companies are important customers for us as well as important operators in India. Moreover, the nature of these deals was innovative, not just in India but globally, as it created a separate entity to manage the operators' network requirements. A lot of importance was given to them as they were new ventures.

In mid-2009, Alcatel-Lucent completed one year of its contract with RCOM. What have been the significant milestones?

The joint venture (JV) with RCOM started with operations in five circles, and scaled up to a pan-Indian level within three months. This in itself is scaling at a magnitude never seen in India. We are talking about 2,700 people who were very quickly involved in a new organisation.

In terms of the actual JV model, it has received awards from various global telecom events and is TL 9000 certified. The model has evolved from a simple managed services contract to building processes, efficiencies, automation and scaling, making all of this work.

How is Alcatel-Lucent placed vis-à-vis the competition?

We are following a three-year turnaround strategy which began last year.
In the first year, we defined the strategy and set out on a vision we call "applications enablement". It is based on the view that over time, all the networks are going to move to internet protocol (IP) and our customers will need to generate revenues beyond basic voice activity.

As part of our three-year strategy, we will be focusing on research and development (R&D) and making several innovations on the products and technologies front. Many of our earlier innovations have now become a reality in terms of products and solutions offered in the market. We expect this to further accelerate this year.

Given our skills in domains like IP, optics, services, access business and the fact that we are one of the leaders in DSL and PON technologies, etc., we have, on the whole, many strong offerings that we are confident about. This combination of unique attributes is what is going to differentiate us from our competitors. The industry is quite dynamic, the competition is strong and will continue to be so. Hence, we cannot become complacent. Every contract is a hard fight.

What is your strategy for India?

India is one of our main priorities; we are very focused on the country, as it is one of the fastest growing markets in our portfolio. Some years ago, Alcatel-Lucent had a very small base in India, and was somewhat losing momentum. However, we started to rebuild our presence in the country and our business has grown substantially over the years. We intend to sustain that momentum in growth, and actually triple our business in the next three to four years. We have strong relationships with a large number of operators in India and we aim to further strengthen those ties. Our goal is to grow with the service providers and also with business verticals like transport, health care, energy, government and utilities, and the enterprise market. At present, India is not the largest market but with the growth targets we have set and we hope to accomplish in the next three years, it is expected to become one of our largest markets.

What are the strengths and weaknesses of the company?

Our strength would be innovation. We still have Bell Labs, which is one of the leading research centres in the world. We have announced a number of innovations in the DSL space, and need to now commercialise and capitalise on these innovations. We have end-to-end capabilities from access to core, and transport to IP services. We have a lot of competitors in the marketplace and have historical relationships with all the leading providers; they trust us.

In terms of weaknesses, AlcatelLucent was a merger of two companies about four years ago and if one is fair about it, we probably did not do as good a job in bringing these halves together as we could have. Some of the shortcomings in that integration process meant that we were not as fast as we would have liked to be in taking our products and solutions to the marketplace. The focus now is to accelerate timelines and generate and create new products to meet customer demands. Also, one feature of our industry is that customers are becoming very demanding and we need to continually better our game which is challenging.

What kind of investments are you looking for in India in the next two years?

To grow our business, we need to invest in people, real estate and capabilities, and we require partnerships in India as we are not going to do everything alone. We are going to grow our investments in the country as our business and employees grow.

We are actively looking at enhancing our R&D capabilities in India over the next few years. We just appointed the R&D business head as our head of services business. You will see more service businesses being located in India, as the country is fast becoming a hub for service innovations, processes and tools.

Going forward, what are the plans with RCOM and Bharti?

Our plan is to deliver on the commitments we have made to those customers and beyond that we will discuss with Bharti and Reliance.

What initiatives have you taken on the 3G and broadband front in India?

We have signed a partnership with Aksh Optifibre for mobile TV services. With Bharat Sanchar Nigam Limited and Mahanagar Telephone Nigam Limited, we already have a very large 3G footprint. We are also in talks with several other operators regarding this.

What are your expectations from these technologies in particular, and how are they likely to change the face of the Indian telecom market?

If 3G is successful, especially given the way the bidding on spectrum is shooting up at the auctions, it looks like an urban voice play. I believe that the ecosystem and the applications that ride on 3G are going to become more important. And, as mentioned earlier, our vision of "applications enablement" is going to be a key piece in taking 3G beyond just city centres, and will provide us incremental revenues. This is not just an Indian perspective, it is our global perspective as the same phenomenon is taking place in other emerging markets too.

What, according to you, are the emerging technologies globally?

In the wireless space, clearly long term evolution is going to be a key technology. We have made significant progress in many of the trials in the US, in some European countries and in Asia. We currently have a trial under way in Shanghai. We are excited that the service is going to be launched in many of these markets.

In the Asia-Pacific, PON technologies will be important as there is a lot of potential for growth in the DSL space. We have just announced that we will move to IP-based networks. Also, in the wireless space, we are quite bullish about femtocells.

Where do you think India stands in terms of deploying these technologies vis-à-vis the Asia-Pacific? Which of these are relevant to the Indian market scenario?

Green Touch is one technology that is very relevant to India. This, of course, is a theoretical technology which can reduce power consumption significantly.

On the technology innovation front, India should take the lead in the deployment of energy-efficient equipment, thereby creating an ecosystem for broadband at much lower price points.

Alcatel-Lucent in India: Quick facts

• Entered India in 1982
• Has 20 offices and 10,000 employees across the sales, customer support, services, software development and R&D businesses
• Dedicates nearly 15 per cent of its annual revenue to R&D
• India is a major hub for Alcatel-Lucent's R&D with over 3,500 engineers and scientists working across labs in Gurgaon, Noida, Chennai, Bangalore and Hyderabad
• Deploys GSM and CDMA infrastructure, 3G, broadband, IP multimedia subsystems, optical and radio transmission, IN platforms and applications; also serves the enterprise segment and undertakes telecom infrastructure projects for the railways, defence and aviation sectors.