Economic Times: January, 2017
New Delhi: Ericsson is focusing on creating the right balance between footprint and profit in India, the Swedish telecom gear maker’s India head Paolo Colella told Danish Khan in an interview. Besides its businesses of supplying and managing equipment for telecom networks, the company will focus on new areas such as IT and cloud, he said, while identifying media and payments as the key drivers for data connectivity in rural India. Edited excerpts:
How do you view Ericsson’s operations in India, especially after spectrum auctions?
This is a very important phase for India. We are in the midst of heavy mobile broadband deployment and the spectrum auction has given it a boost. Post auction, we have seen an upswing in terms of deployments. There is definitely some sense of urgency with Reliance Jio readying operations. The second area that is very important to us is managed services. It’s one of our key pillars for business in India. We have long-term partnerships with AirtelBSE 0.10 % and many of the others in different forms, from covering the wireless space, fibre and fixed line. In terms of new areas, we are giving a strong push to the IT and cloud area. We’ll focus much more on core, BSS (business support systems) and general digital area. We believe, as data becomes important part of the telco revenue structure, we will see emergence of new business models.
Do you see scope for any more network deals spurred by the spectrum auctions?
The market will remain open to innovation. There is going to be enough room for deals and a lot more focus on execution.
Nokia claims that it leads the 4G LTE market in India. What is your view?
I don’t think we are lagging. We have achieved what we wanted to achieve. Our focus is on creating the right balance between footprint and profit so that we continue to provide long-lasting support to our customers.
How do you look at your competition with other vendors in India?
Obviously, the competition is strong. We believe that this is a marathon and each one should be better focused on their own capabilities.
If you look at LTE, obviously No. 1 is Samsung given their position with Jio. Then, when it comes to LTE, give and take, we have a solid footprint. As the market consolidates, there will be opportunities.
Is consolidation a good thing for Ericsson?
In the long run it’s beneficial. We can offer our customers already from today a smooth transition from 4G to 5G because the portfolio that we have bought into the market is already 5G ready.
As consolidation happens, we will have to go with the necessary cycle, but we are quite confident of our capabilities.
Before spectrum auctions, vendors were struggling to get business. Has the situation changed now?
The market was in a resting mode. If you look at the last 12 months, telcos have been very busy resetting their priorities. Over the last 18 months, we have seen a clear change of plan. Some telcos are looking at leapfrogging straight from 2G to 4G.
This year has been probably the biggest year ever by sheer number of radios we, Ericsson, have deployed in this country, but mostly for existing contracts. The new spectrum is bringing additional fuel for us.
Ericsson had earlier deployed the OSS (operations support systems) solution. Is it now looking at offering any other technology to Jio?
We have a portfolio to cover much of Jio’s needs. We have discussions on BSS. We are promoting many areas of our portfolio. The question is when they are going to be prepared to open up some areas for us and for others.
How are your industry and society business segments progressing?
The Indian market is developing in this space. Smart cities are very high on our agenda. There is quite a lot happening.
What new trends do you see this year?
Mobile internet in rural India will not be about the same drivers as in metropolitan India. Media and payments will be the key driver for data connectivity in rural India. These couldn’t be visible before, because one year ago it was mostly 2G.
Jio’s launch with their bundling of content has shown the way, and the payments are now coming at the speed of light because of the demonetisation. These two trends are opening a new stream of business.