India one of the fastest growth areas for Ericsson globally: Paolo Colella

New Delhi: Make in India might have been the reason for the recent announcement from Sweden-headquartered Ericsson. The firm on Sunday announced the setting up of its second manufacturing plant in Pune. Paolo Colella, managing director, Ericsson India, says he believes that India has been central in the company's growth road map. In an interview with Hrishikesh Joshi, he talks about the firm's expansion in India, contribution to its global revenues and the road ahead. Excerpts.

What is the role of India in Ericsson's road map?

We established our India operations way back in 1903. We are India's significant partner in developing telecom infrastructure and now part of its cellular revolution as well. We set up our first factory in Jaipur. Ericsson has manufactured more than 400,000 base stations for India through our factory in Jaipur.

We are now setting up a new plant in Chakan which will be operational by third quarter of this year. Ericsson has invested $15 million in this plant. This will also cater to the Asia-Pacific region and Africa. In future, this will be our global manufacturing hub.

Since this facility is catering to global markets as well, how much will you export from India ?

It's difficult to predict, as of now. But, it will serve the southeast Asia and Africa markets, depending market conditions. Volumes in India will definitely determine the growth as well. India is one of the important markets where we have a complete set up, including sales, support, and now centre for global manufacturing. We can go beyond service providers.

India has become the top third contributor with six per cent contribution to your overall net sales, what is working for Ericsson here?

India as a country itself is a strong growth driver for Ericsson. Growing economy and the 1.3 billion people are driving volumes.

Besides that, we are at the beginning of investment cycle and building mobile broadband infrastructure. Also, fourth generation (4G) is a big area of investment. We will generate wave of modernisation in India. It will bring change in operational support system (OSS) and business support systems (BSS) space. The six per cent will be fuelled by a big way of transformation.

How are you planning to continue and grow your share in the country?

We are not in a hurry to increase market share. But we are looking for stability and stable volumes. We are looking at moderate growth. It is much more dependent on the export volumes which will shift from year to year. This will basically provide stability to manufacturing. The global volatile market conditions will play an important role.

What kind of growth are you expecting from the targeted areas in India. What is the kind of timeline?

4G will generate more opportunities for us in India. 4G will come with a strong intellectual property (IP) backbone. Mobile, radio broadband, IP, microwave backhaul. It will help us to bring new business models as we shift from voice to data. The monetisation logic becomes much more sophisticated. India is one of the fastest growth area for Ericsson globally. TV and media is also very important area for us.

We have made significant investments for this we have a very strong offering in video space. It will need a high speed to mobile Internet. We have created solutions for various sectors like automotive, shipping and telecom. In India, we are very keen on smart city project.

How are you transforming to become an ICT player?

From early 2000, we have shifted completely as a company. Earlier, the business were based 75 per cent on hardware and 25 per cent software. We have flipped that now. Today, we are more of a 75 per cent software and services company. However, We are still banking on telecom infrastructure but we have developed service workforce that is close to 90,000 people globally. In recent years, we have developed managed services business as well. We have grown from 43,000 people in 2003 to more than 100,000 people now. All our growth has happened in software and services space in last 12 years.

With this move, your competition landscape is also changing and becoming bigger. How are you gearing up to tackle it?

Landscape has became more articulate and its not based on traditional level. It is not only about competition, but setting up large ecosystem of players. We are actively engaged with our global partners like CISCO and Intel. We are working with major industry players to create an ecosystem. That is the way we engaging competition.

What kind of role can Ericsson play in govt's Digital India agenda?

For Digital India, we are involved in developing fibre optic infrastructure.

High speed internet mobile connectivity will give India boost for development. Smartphones will be the main device through which population of India will access internet. We are already associated with all the major Indian telecom service providers. We are intensifying our efforts to be a part of Digital India.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.