In 2011, telecom equipment vendors focused on facilitating 3G network rollouts for operators and signed key managed service contracts. With broadband wireless access (BWA) services expected to be launched in 2012, these vendors are all set to deploy long term evolution (LTE) technology in the country. tele.net spoke to leading telecom equipment providers about their performance in the past year, the issues faced by the segment and expectations for 2012...
How did the telecom equipment industry perform in 2011?
Kanika Atri
The year 2011 was one of resilient growth for the Indian telecom industry. With the telecom subscriber base touching 915 million and a teledensity of over 75 per cent, the sector continues to grow. 3G services became a reality in 2011 and witnessed gradual subscriber addition. 3G has increased the expectations of end-users to look beyond simple network performance parameters such as network availability, capacity and voice quality to more personalised experience, especially in terms of data usage. In the past year, there was steady growth of both passive and active infrastructure. Managed services continued to be one of the key focus areas for telecom infrastructure providers as they rolled out 3G networks. In addition, equipment vendors supported operators in optimising their management resources and finding ways to secure a single point of contact for all network-related operations.
Sanjay Dhawan
Last year was an eventful one for the industry with the sector witnessing 3G network rollouts across the country. These networks will be optimised in the future and smartphone devices will enable data growth. Also, the new National Telecom Policy (NTP) is nearing finalisation, which will be a step forward for the industry.
Cui Liangjun
India is the world’s fastest growing telecom market and has the second largest network in terms of wireless connections after China. In 2011, operators expanded their existing 2G networks to cater to the growing demand. In addition, 3G networks were extensively deployed. In 2012, we are likely to see the deployment of LTE technology. In addition, there will be requirements for upgrading the transmission network to meet the growing capacity demand of backbone networks.
Anirudh Patil
On the equipment front, 2011 was not a very remarkable year given the issues surrounding 3G licensing and deployments, and the increased focus on improving profitability and customer experience. The global economic slowdown, plateauing of subscriber growth in many circles and tapering of Indian GDP growth also had an effect on the telecom equipment industry.
Which are some of the key agreements that your company signed with operators during the year 2011?
Kanika Atri
Nokia Siemens Networks (NSN) considers India as a growth market as well as an innovation hub and a global delivery base.
In 2011, the company signed several key agreements with Indian telecom operators. It received contracts from Aircel, Bharti Airtel, Idea Cellular, Tata Teleservices Limited (TTSL) and Vodafone India for the deployment of 3G networks in 20 telecom circles. It also became the packet core market leader in India. The company’s mobile packet core solution was selected by five operators – Bharti Airtel, Datacom, Idea, TTSL and Uninor. With this, NSN now carries data traffic from all 22 telecom circles and serves around 250 million subscribers, the highest in the country. In November 2011, Bharti Airtel selected NSN for deploying its customer experience management (CEM) platform and services across India.
Sanjay Dhawan
The year 2011 marked a first for 3G/high speed packet access (HSPA) services in India, and Ericsson has established a clear lead in this area. The major deals signed/projects implemented by the company during 2011 are:
• The country’s first LTE contract with Augere for the Madhya Pradesh region; scheduled for rollout in mid-2012
• Managed services deals with Bharti Airtel, Aircel and Sistema Shyam TeleServices Limited (SSTL)
• Based on its application store, Ericsson eStore, the company set up similar facilities for Idea Cellular as well as Reliance Communications
• A partnership with Aircel to provide location-based services.
Cui Liangjun
Key contracts won by ZTE in India are:
• From Power Grid Corporation of India Limited for the supply and installation of transmission equipment across India
• From Bharat Sanchar Nigam Limited for the supply and installation of broadband equipment
• From Vodafone India for developing an advanced VAS platform
• From SSTL for CDMA expansion and EV-DO upgrade
• From Aircel for 3G network deployment in the Uttar Pradesh (East) circle; the project has been completed.
Anirudh Patil
Alcatel-Lucent continued its engagements with most of the major operators across the fixed line and mobile sectors. The company signed some innovative partnerships such as with Ozone for Wi-Fi managed services and with Percept Knorigin for content delivery. Also, the company’s partnership with HCL was a strategic move to provide 3G services to the armed forces. Some of the innovations that Alcatel-Lucent introduced in the market in 2011 were Light Radio and FP3 chip.
What are your demand expectations from the telecom industry in 2012? Which segments are likely to drive this demand?
Kanika Atri
The dynamics of the communication industry are changing rapidly and infrastructure providers are evolving to meet the challenges and capitalise on the opportunities that 2012 may offer in the mobile broadband and professional service segments as well as those provided by the NTP 2011. The telecom ministry expects rural India to drive the next round of growth, particularly for voice-based services. 3G and BWA are expected to provide new opportunities in the maturing urban markets and facilitate balanced economic growth. The year 2012 is likely to be an inflection point for the industry with mobile broadband proliferation. Moreover, with the expected introduction of LTE time division duplex (TDD), India is poised to take the global centre stage in terms of telecom technology deployment.
NSN expects LTE TDD, mobile broadband and innovative offerings like CEM and managed services to become game changers in 2012. The company’s key initiatives in these segments are as follows:
LTE TDD: NSN is engaged with all major BWA spectrum winners for deploying LTE TDD networks in India on a trial basis. The company is now focusing on the commercialisation of the technology in India and has recently launched LTE TDD devices such as USB dongles and customer premises equipment.
Managed services: Banking on its global delivery, multi-vendor and multi-technology capabilities, NSN provides tailored and flexible solutions to operators for improving operational efficiency.
CEM: NSN’s CEM offering brings together pre-integrated software and related professional services to improve customer experience.
Mobile broadband: As more customers use mobile broadband, they expect their smart devices to be connected seamlessly. NSN offers smart networks and mobile broadband products which enhance customer experience.
Optical transport: The network architecture in India is changing rapidly to meet end-user requirements. NSN is prepared to deliver bandwidth, new applications and services to address the challenges that operators may face in 2012 and beyond.
Sanjay Dhawan
The year 2011 was one of several innovations in the information and communication technology space. Data is expected to become as important as voice in the future. Also, 3G services are set to grow and LTE, which will be soon introduced, is set to revolutionise the wireless broadband segment.
Ericsson sees three interdependent future trends:
• Increasing wireless data coverage
• Broadband will witness continued growth (900 million mobile broadband subscriptions in 2011)
• The cloud will rationalise resources by combining IT and telecom networks, as well as offer new and improved services at low prices.
There is also continued industry focus on network capacity and quality of services. The key technology trends that are expected to impact the industry are:
3G: 3G rollout has been a milestone for the Indian telecom sector as well as a forward step towards achieving the target of providing communication services to all.
LTE: BWA services will be launched through the LTE platform in 2012. Of the estimated 5 billion people who will use broadband by 2016, about 80 per cent will be mobile broadband subscribers and the majority of these users will be served by HSPA and LTE TDD networks.
Cloud: Several operators and service providers are scaling up their delivery of cloud services for global customers. Cloud computing would significantly change the way services are sourced (from technical platforms to applications, infrastructure, storage and software-as-a-service), and drive the transformation of the information architecture and business processes.
Ericsson expects enterprises to adopt hybrid solutions, which are a combination of on-premises or hosted infrastructure and multi-tenancy in the cloud.
Media content delivery: TV and video consumer behaviour is changing. There is a shift towards media services that focus on the individual, are simple to use, and deliver on-demand content in a way that meets user expectations for quality. The consumption of content is changing rapidly with the internet and mobile handset becoming the preferred platforms. This poses a major challenge for operators as delivering a large quantity of data efficiently would increase costs.
Cui Liangjun
India has a huge appetite for adopting new technologies such as LTE, cloud and xPON. With growing competition and the need for on-the-move connectivity, the demand for fast, scalable and cost-effective wireless networks to provide broadband connectivity is increasing in this market. Some of the technologies that would drive service demand are:
• LTE: The technology will help in increasing capacity and reducing network complexity, thereby decreasing both capex and opex. It will enable service providers to meet the growing demand for mobile data solutions. This will enable the delivery of content-rich services in a more cost-effective manner. Further, the cost per bit for LTE is very low as compared to other technologies, which will facilitate the adoption of the technology.
• FTTH: Fibre-to-the-home (FTTH) will drive wireline broadband penetration and help in making India a competitive knowledge-based economy. Optical fibre-based xPON technology plays an important role in access networks by providing high speed broadband, higher bandwidth capacity, resistance to external interference, increased reach, low maintenance costs, longer life, better reliability, etc.
• Cloud computing: Cloud computing is the buzzword in the IT sector and will empower end-users by delivering various mobile applications. This will be a breakthrough technology for rural India.
Anirudh Patil
The fundamentals of the Indian telecom industry remain very strong. While currently, the sector is addressing the problems of connectivity and broadband penetration, going forward, it is important to see how consumers use the internet or other creative applications beyond voice. These applications would be focused on bridging the prevailing digital divide in rural India, while on the other hand, creating a lifestyle enabler for urban areas of the country. To make this a cost-effective reality, the sector will see the network/infrastructure becoming smarter and intelligent, and the devices/ terminals becoming increasingly more frugal and affordable.
Increased demand for video services will lead to solutions which will optimise the mobile backhaul network. New applications for health, education and transport will create a circle of demand for services beyond plain voice and data.
The government has emphasised the need for indigenous equipment manufacturing. What are your views in this regard?
Kanika Atri
NSN appreciates the government’s initiative for developing the local manufacturing industry. As a major telecom equipment manufacturer in India, the company continues to work with the government and local manufacturers to develop the necessary ecosystem for the industry’s growth.
Over the last three years, NSN has invested over $100 million in making India a global equipment manufacturing and innovation hub.
Sanjay Dhawan
To encourage domestic manufacturing, preferential market access, reservation and protection may not be the ideal policy measures. The focus should be on providing stronger infrastructure, funding research, improving competitiveness and providing incentives that allow fair business practices.
Cui Liangjun
Indigenous equipment manufacturers should be encouraged; however, there should not be a policy of preferential access or mandatory requirements or penalties on service providers. Mandating preferential access without ascertaining whether the domestically manufactured equipment is at par or better than that internationally available will lead to investments in phased-out technologies by service providers. This may have an adverse impact on the quality of service and prove to be a hindrance to foreign direct investment in the sector.
To ensure sustainable growth of indigenous manufacturing, India should focus on improving the competitiveness of the domestic industry. Further, all indigenous manufacturing processes should be aligned with global standards like the 3G Partnership Project and the International Telecommunication Union to ensure that India is not isolated from the global industry. Global harmonisation will support international roaming services besides providing cost benefits resulting from economies of scale.
Anirudh Patil
There are arguments for and against this clause. We will get a better understanding of the direction in which the government is headed once the NTP is announced this year. India is a crucial market for Alcatel-Lucent not just in terms of business but also in terms of the company’s talent pool here. We expect that the government will support and encourage the company’s commitment to India