Excerpts…
What are the key drivers for AppliedMicro’s business in India?
We are in the business of making end products for the telecom industry. We represent the bottom end of the business pyramid. We manufacture chips which are used by telecom vendors like Ericsson, Huawei and Juniper in their telecom products such as routers.
Since, our end consumers are service providers such as BSNL, Reliance Communications, and Vodafone India, the key drivers for the growth of telecom sector contribute to the growth of our business as well. The operators are presented with great business opportunity with the increasing number of mobile subscriber base and uptake of 3G and 4G. Secondly, the traffic generated by the subscribers is now moving from voice to email to video thereby opening up new revenue sources for telecom operators. The third important element relates to providing throughput to operators for providing these services and connectivity to this emerging section of customers.
And this throughput turns out to be wireless. It is in this area of unseen infrastructure that companies like ours step in and provides products and services to telecom operators to run their operations.
What are the areas of growth for the company in India?
The technology business of the company has two parts to it. The first one relates to ethernet which is the means to connect computers to servers and routers. Operators provide broadband connectivity using two technologies, optical transport network (OTN) and wavelength-division multiplexing. Out of the two the dominant technology is OTN. Our growth has also come predominantly from OTN segment. Over the last couple of years we have increased our share in this market to about 40 per cent. We are working towards sustaining this growth and increasing our market share to 50 per cent plus over the next few years.
Also, we are in the process of co-locating ourselves near our customers. Since, our customers comprise vendors like Cisco, Ericsson and they are present in Bangalore, we have also moved to Bangalore.
In June 2012, we opened our second design center in Bangalore. We already have a design centre in Pune. The new design center will drive advanced design and development of AppliedMicro’s computing and connectivity solutions, providing significant value to its technology capabilities. The design centre will help us develop compute and connectivity products for enterprise and cloud data centers.
What is your business plan for India?
We currently have a team of about 10 people. We plan to increase the strength of our team to 60 to 70 people within a year. Our focus would be on
growing our business in segments like mix signal, digital signal processing and system and chip business.
What are the trends in the telecom sector?
Two to three years back our clients and players like Cisco were primarily engaged in maintenance work. Today, they are involved in research and development of products. Also, Indian design centres are no longer the secondary departments. They are seen as the hub for innovations and the development of products. Bangalore as the informational technology hub has two things going for it. In the recent past it has witnessed development of large number of design houses and has immense talent pool in young design engineers.
Another important trend is that the industry is experiencing acceleration of technology at unprecedented rates. For example 3G had not even stabilised in the country and we are already focusing on 4G.
What are the challenges before the company?
The biggest challenge is to think and develop the kind of products that internet service providers will require six years down the line.
The cost of deployment of technology continues to be high. Telecom service providers and telecom equipment manufacturers have to come together for co-development of products and solutions. The network readiness of telecom operators is going to be the main focus area for vendors and companies like us. The operators have to employ IT strategies which enable adoption of fast and flexible technology products to be in a position to cater to increasing number of subscribers and the growing demand for higher bandwidth.