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Ashoka Valia, MD, Nortel India

April 15, 2005
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Ashoka Valia assumed office as managing director of Nortel India in June 2002. He is responsible for the Indian operations of Nortel Networks, including carrier and enterprise sales, business development and partnerships. In an interview with tele.net, Valia shares his views on the Indian telecom sector and talks about Nortel's performance and plans...

What have been Nortel Networks' biggest achievements over the past year or so?

There are a number of key achievements. Firstly, business has been exceptionally good for us in India.We have grown rapidly with service providers in deploying wireless networks. For example, the BSNL contract to deliver GSM/GPRS/EDGE in the eastern and southern regions of India is one of the largest turnkey deployments in the world today. We also have a foothold in the Indian Railways with GSM-R, an area where we have 65 per cent of the market share globally, and are doing a project with Reliance on CDMA.

To satisfy the growing communication needs of the country, we continue to see the optical business expand. We are the leader in India and it is gratifying to see the deployment of the latest technologies, such as our 640 gigabit optical cross connect (Optical HDX) and Metro DWDM for applications such as disaster recovery and storage area networking.

In the enterprise segment, we are growing faster than the market. We have been extremely strong in the BPO space. This is primarily due to our deep understanding of the industry and ability to offer an end-toend solution, be it IP or TDM based.

Another segment where we are gaining excellent traction is for secure, bulletproof data networking. Typically, this is important for "mission-critical" applications where you cannot afford to have the networks go down or attacked by malicious intruders. This is why the Bombay Stock Exchange relies on Nortel.

Secondly, our relationship with customers is getting tighter. For many, we have evolved from vendor to partner and now to a strategic partner. In that respect, we collaborate with the customer from the design of the network, to business modelling, to operating the network and servicing the end-customers. We recognise that we need our customers to be successful to grow our business.

Lastly, an achievement which we are quite proud of is the team we have built over the past few years. I believe we have more than our fair share of highly talented individuals in the industry. They have an ethos where they take pride in the success of our customers' business.

What are the targets that have been set for Nortel India for the short and long term?

We look at India as more than just a place we do business, but also where we bring business and strategically use its capabilities for the region. At a macro level, success for me is when Nortel is the first company that comes to mind when a customer asks "who can I trust to build the network I run my business on".

For the top line, our objective is to grow significantly faster than the market. This in turn allows us to invest more in the country to further propel growth and enhance our offerings to our customers.

Nortel has been in India for the past 15 years. We were pioneers in developing the telecom software industry back in 1989 and it is gratifying to be an integral part of a great Indian success story. We have recently invested $10 million in Sasken for an equity stake to further build our telecom software capabilities in India for customers here and beyond.

In addition, we are developing a centre of excellence for telecom, to better service customers in India and the region. As a result of this activity, we are expanding our offices in Bangalore, Mumbai and Delhi and have added new offices in Chennai and Kolkata. The target is a healthy business environment where we continuously enhance our service offerings to our customers as they grow.

What will be the company's focus areas over the next couple of years in terms of target customers and product segments?

The first priority is to deliver on our commitments to our customers. For example, we are building a very large network for BSNL at absolutely world-class speeds.There is a lot of pent-up demand, so the drive is to perform faster and better than has been done before.

With respect to technologies, we will continue to build our wireless presence here. Wireless is the mode of choice for connectivity. Nortel is in a unique position to deliver value as we are the only company that is strong in all three technologies –­ GSM, CDMA as well as UMTS.We have built optical backbone networks for Reliance, Bharti and GAIL. Our plan is to leverage this capacity to drive broadband to the last mile to offer a plethora of new services for the end-user.

As India continues to advance, new services and applications with multimedia capabilities will be developed. Convergence will allow these services to be delivered while lowering the total cost of ownership as they are delivered off a single core network. In this area, Nortel has been named the number one company for VoIP for three years in a row by Synergy Research Group. We have over 40 customers in 22 countries for this technology and we expect India to be a key market for us in the coming years.

We also believe security is gaining increased importance in networking. As more businesses rely on the network to get their business done, it is important to have integrity in the network, whether it is a secure VPN or a switched firewall or deep packet inspection technologies. Additionally, we are working with Symantec to detect viruses, worms or intrusions in the network before they even hit the server or the PC.

Lastly, application development will be taking on increasing importance for us.Operators are finding that ARPUs are falling lower and lower and they are looking at ways to profitably bolster the top line. Our MCS 5100 which allows you to stay in contact with your business anywhere, anyplace, anytime, with one number, is an example of this.

What were the key factors that helped you get the BSNL contract?

The number one factor was engaging the customer early –­ in understanding their key business drivers, network requirements, applications they want to offer and past experiences. This allowed us to work with our development groups to ensure we architected the right solution with the right product capabilities that was optimal for them. Second was our global expertise in wireless, which gave them the confidence that Nortel would deliver a state-of-theart network. We have plenty of experience in this area as we have deployed over 300 wireless networks in 50 countries.Additionally, we are working on more than a dozen UMTS networks in Europe.We have the proven expertise and experience to undertake a network of this scale and have demonstrated we can build large networks in India as we have in the past.

What is your outlook on the Indian telecom sector? What levels of growth do you expect and in which segments?

The recent statements by the communications and IT minister indicate that there are about a 100 million subscribers today –­ wireless and wireline –­ and they will be growing to 250 million by 2007; internet subscribers are predicted to grow from 5.4 million to 18 million; we are moving from half a million broadband subscribers to 9 million in 2007; and IT-enabled services are seeing 40 per cent growth.

I think the benchmarks the minister has laid out are achievable. For us, it plays very well because the growth is in areas that we are focused on: wireless networking, broadband, convergence, security and applications that attract people to use the network.

In the last two years the focus has been on adding new mobile subscribers for basic voice services. I think we will see a major shift in the industry going forward.Service providers will begin differentiating themselves on the basis of the quality of service, new applications being offered, trust and security of the network.

What are your biggest issues and concerns vis-A -vis the Indian telecom sector?

The telecom industry, both the private and public sector, has made tremendous progress in the last 12-18 months. Teledensity has surged, fibre is being laid and lit.Quality is getting better and applications are more innovative. The regulators for the most part have done a good job in ensuring strong growth at affordable rates. It is as if we are making up for lost time, which is truly exciting.

Along this process, however, there are areas we can certainly improve to be amongst the best in class in the world. The current tendering process for public projects is a case in point. Our telecom development has reached a point where we need to have a dialogue on the smartest way to procure equipment while ensuring the process is transparent and fair. Many in the public sector tell me that the current process does not give them the flexibility to quickly adjust to changing market conditions or ensure they get the best value for money. Questions like how do we maximise existing investments, leverage network infrastructure and minimise service disruption should be taken into consideration to find the best way forward.

Also, the industry has to start looking at shared resources. Affordability in India is less than in other parts of the world and that's reflected in the low tariffs. How do you make this sustainable? One possibility is to share infrastructure. For example, currently each operator builds its own site with shelters, towers, diesel generators, etc.They can reduce costs if they share this infrastructure. The industry needs to do some out-of-the-box thinking to find ways to reduce costs and become more buoyant.

Another challenge is to ensure network quality and security become a hallmark of the telecom industry. This is a key factor when companies are making a choice of where to invest their capital. For many, the reliability, quality and security of the country's communications infrastructure will be important considerations in their decision.

Success of the telecom sector is also interdependent on the success of other infrastructure initiatives. Roads, airports, reliable power...these will all help further fuel development of the economy and hence the telecom sector.

What are your thoughts on the spectrum allocation issue that has come up with respect to the 1900 MHz band between GSM and CDMA operators?

Nortel is in an enviable position in that we enjoy leadership across different technologies. We will be able to work with whatever the result is on spectrum allocation.

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