Having acquired national and international long distance licences, Orange Business Services (OBS) is poised to capitalise on the opportunities presented by the Indian telecom market. The company is betting big on unified communications, video presence and cloud-based solutions. Bala Mahadevan, chief executive officer, OBS India, discusses the biggest challenges for the company in the Indian market and its future plans…

How has the company performed in India over the past year?

Our Indian operations have witnessed significant growth over the past few years. France Telecom’s investment in India through the acquisition of GTL Infrastructure’s managed and enterprise services divisions in 2007, and OBS obtaining international and national long distance licences in 2008 have been the major milestones.

Our customer base in India has increased significantly in two areas. On the network connectivity side, we are witnessing the global expansion of several Indian companies and therefore, the company’s requirements for international connectivity are expanding. Compared to our traditional international customers who have offices in India, the trend now is two-way, with Indian companies expanding overseas.

OBS India also has a large IT services portfolio, which offers a range of solutions for domestic companies. It includes designing the local area network (LAN) and wide area network (WAN), security solutions, remote infrastructure management, PABX management and specialised contact centre solutions. Large domestic companies are our primary customers for these services. We also provide these services to our traditional international network customers. Today, we have more than 600 customers in India, including a large number of domestic companies. We are also working on several healthcare projects with the state governments.

How does the company view the Indian telecom market in terms of business opportunities?

The uptake of communication services in India has been very encouraging. The key services are unified communications, video presence and cloud-based solutions aimed at increasing productivity as well as accelerating growth within limited resources and budgets. Organisations are looking at quick decision-making, thereby reducing variable costs. This can be achieved through a low communication latency cost, which is supported by unified communications.

Network-based value-added services (VAS) such as network optimisation, WAN acceleration and network security solutions are driving network integration in India.

What technology trends do you expect over the next year or so, especially with the introduction of broadband wireless access (BWA) services?

The key growth drivers for the telecom sector will be the launch of 3G, BWA, Wi-Max and long term evolution (LTE) services, and the growth of high speed broadband, data and VAS. The launch of BWA services will have a positive impact on the market.

The industry’s focus will move from voice to data and VAS. While voice brought about the first wave of revolution in the telecom business, data will drive the next level of growth.

On the enterprise side, the following trends are expected:

•   Collaborative technologies are helping modern organisations to source skills independent of the location, while enabling their employees to be more flexible. These developments promise to improve productivity. According to the Yankee Group, 50 per cent of a company’s employees now spend at least 20 per cent of their time away from their primary workplace.

•   Machine-to-machine (M2M) communication is fast becoming a part of IT strategies. For instance, security firm Securitas Direct has partnered with Orange in France and Spain to offer an M2M-enabled home security service. With 100,000 SIM cards already deployed, the partnership has led to the development of a new M2M-enabled video surveillance product, allowing security experts to remotely monitor client premises. Today, several million M2M connections are available and this will increase further as more people recognise the potential of this solution.

•   Cloud-based contact centre solutions are becoming increasingly popular with businesses that are looking for an infrastructure that provides the flexibility to scale up and down quickly, and allows them to service new markets at a minimal capex.

•   The growth of the video market will drive communication and collaboration with customers, staff and partners. The availability of several mediums supporting voice communication will contribute to this. Going forward, the focus will continue to be on the ability to quickly and easily collaborate, irrespective of the location, which will transform business processes.

What are the company’s investment plans for India in 2012-13? Which segments are likely to receive more investments and why?

We have made large investments in the Indian market over the past few years. In 2012-13, we will increase our investment focus on the network in the Asia-Pacific. In 2011, around Euro 750 million was spent on the international network backbone and related IT infrastructure. During 2012, OBS will complete the implementation of a 10 GB ring network covering Japan, Hong Kong and Singapore, which will provide customer benefits such as quality services, dynamic bandwidth reallocation, improved service level agreements, virtual private LAN service  and 1 GB access.

What are the biggest challenges for the company in India?

While India is a growth market, it has also become a highly competitive market. The competition in India is unique and there is a need for constant product and solution innovation as well as price sensitivity. Also, while the uptake of new services is increasing, the adoption of cloud-based services and telepresence has not kept pace with global markets.

How is OBS placed internationally vis-à-vis its competitors? Which are its closest rivals?

The base for traditional telecom companies is expanding as they enter new markets. The line between IT service providers and operators is blurring. Considering this evolving marketplace, the expansion of Indian operators into emerging markets is not a threat. We expect new partnerships and consortium models in the next few years with growth in the demand for services like cloud computing.

Do the requirements of global enterprise customers match those of Indian customers?

Network infrastructure for large multinationals is usually centrally controlled. The network is the lifeline for organisations and security is of critical importance. Therefore, entities always look for a single network service provider. However, as international companies expand in India and increase their footprint, we are witnessing collateral decision-making. The complexity of the network and its interoperability requirements necessitate companies to have a single network provider, while there may be an element of domestic connectivity requirement, for which local operators may provide services to ensure timely delivery, execution and implementation of the best local models.

In the best interest of customers, OBS also has a vendor-based managed service model, under which we develop solutions in collaboration with Indian telecom operators and link them to our backbone to provide seamless interoperable connectivity solutions.

What trends are likely in the managed services and security space?

Customers are increasingly opting for managed security. Managed services cover traffic analysis, VPNs, online firewall monitoring, etc. The advantage of these services is that companies can offset the significant resource requirement for specific security measures (such as malware scanning). For cloud-based services in particular, vendors have designed their security platforms as foundations that allow the addition of modules, paving the way for a strong security offering.

What are the company’s future thrust areas for the Indian business?

OBS has set itself key objectives in four major markets:

•   Generating Euro 500 million in revenues from cloud computing by 2015 by expediting development and focusing on four areas – cloud-ready networks; “as a service” infrastructure; “as a service” collaborative solutions and communications; and application stores.

•   Selling 10 million SIM cards by 2015 in the M2M market, thereby capitalising on the development of services beyond connectivity.

•   Enhancing the company’s dedicated international expertise centre in Brussels and expanding its role as the driving force for market standardisation.

•   Becoming the top player in the videoconferencing space in France and one of the top three worldwide.

•   The guiding principles include interoperability of terminals and networks, development of managed and hosted solutions as well as simplification of use through user support.

•   Generating revenues of Euro 1 billion in emerging countries. OBS hopes to achieve this by supporting international customers in developing their projects and strengthening its presence alongside local multinationals.