Global telecom vendors eyeing Indian market
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Global telecom vendors eyeing Indian market

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Global telecom vendors eyeing Indian market
New Delhi: Next two months are expected to be quite challenging for Indian telecom market, as top executives of the world's largest telecom equipment vendors such as Ericsson, Nokia Siemens Networks (NSN), Alcatel-Lucent, Huawei and ZTE are believed to bid for several billion dollars worth of business deals coming up for grabs in the next six months in the country.

"It is quite natural for them to converge on India, which is probably the only large growth market in the world at present. The total business on offer could be worth $25-30 billion over the next two years," said BK Syngal, Senior Principal, Dua Consulting, and Former Chairman of VSNL.

The world's top five telecom gear makers have been battling to bag deals in India, where several new operators are launching services, even as existing ones are expanding their networks. Besides, the 3G spectrum auctions scheduled for early January 2010 will result in huge network orders from domestic players. Take the case of NSN, which is battling falling sales globally. Its new CEO Rajeev Suri, top executives and its entire board will spend close to a week in India. NSN is not the only telco that is having a board meet in India. Chinese equipment major ZTE also plans to host its next board meeting here and its top executives led by its president and CEO Yan Yimin are slated to be in India before December-end.

The current CFO (Chief Financial Officer) and EVP (Executive Vice President) of LM Ericsson AB, Hans Vestberg, who is set to take over as CEO of the Swedish firm from January 1 will also be seen in Delhi next month. Ben Verwaayen, CEO of Alcatel-Lucent, is also headed for India in early November. A Huawei Chairperson is likely to be in India before November-end.

With India having a mobile penetration of just 40 percent and adding an average 13 million subscribers every month, the domestic market provides the single biggest opportunity for global telecom vendors. For instance, BSNL's (Bharat Sanchar Nigam) latest tender for 93 million lines was worth $8 billion and the PSU (public sector undertakings) is currently engaged in awarding this contract to Ericsson and Huawei. NSN was disqualified from this tender on technical grounds.

Besides, India's largest mobile service provider Bharti Airtel's over $2 billion network outsourcing contract will be up for grabs soon as its existing deals with Ericsson and NSN come up for renewal in early 2010.

In the last four months, NSN has bagged multiple deals from Unitech Wireless (Telenor) to roll out its mobile network, a contract from Idea Cellular to upgrade the telco's network across India and also entered into an agreement with for Vodafone Essar for building infrastructure for the Indian telco in seven circles.

Alcatel-Lucent too has witnessed a huge revival in its fortunes in the Indian domestic market. The company is in the race to buy out troubled state-owned telecom equipment maker ITI and is also the front runner to bag both Bharti Airtel's and Reliance Communication's (RCOM) upcoming contracts to manage and maintain their optic fibre cable networks.

Both these contracts are estimated to be worth over $500 million each. In April 2009, Bharti had awarded Alcatel-Lucent a $500 million deal to manage its landline and broadband business. Last year, Alcatel-Lucent had entered into a network outsourcing deal with RCOM and the value of this contract has already exceeded $1 billion.

Over the last 12 months Chinese vendors ZTE and Huawei, have beaten western vendors to walk away with a significant portion of the new network outsourcing deals. RCOM and Tata Teleservices have outsourced part of their GSM network management to Huawei which has also bagged network rollout contracts from BSNL, Datacom, Aircel and Unitech Wireless. ZTE recently tied up with Loop Telecom for its GSM rollout while also picking up large orders from Sistema Shyam and Unitech Wireless.

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Reader's comments(2)
1: It is extremely disappointing to see Bharat buying foreign Telecommunications Equipment for its burgeoning market. What happened to Sam Pitroda, C-DOT, and other hotshots ? With a subscriber base of 350,000,000 it truly is a shame that we do not manufacture a single switch or cell phone. Everything is either imported from China, U.S.A., France, Germany, South Korea, or Taiwan.
We should be the largest exporter of telecommunications equipment not importer.
Posted by:Suraj Tschand - 29 Oct, 2009
2: late than never, world giants have realized that they need to do well in Indian market if they want to grow globally.
Posted by:virat - 29 Oct, 2009