A global provider of innovative technologies, Dialogic has made significant headway in the Indian telecom market. The company provides technologies that enable innovative mobile, video, IP and time division multiplexing solutions for network service providers and enterprise communication networks. In a recent interaction with tele.net, Nick Jensen, president and chief executive officer, Dialogic, discussed the company’s key thrust areas and growth strategies. Excerpts…
How important is the Indian market for Dialogic?
This seems to be a very good time to be present in India as 3G rollouts are going on. We believe that given the quality of handsets and networks in the Indian market today, and the available video-enabling technology, this is the best time for players like Reliance Communications, Vodafone Essar and Bharti Airtel to roll out these services. In terms of revenues, India is not our biggest market but in terms of potential, China and India will probably share the top slot.
What are the key growth areas for Dialogic?
Mobility is by far the biggest growth area for us. Mobile interactivity, which mainly constitutes video, holds major potential and we are determined to maximise our investments in video.
In India, 90 per cent of the traffic today is voice and only 10 per cent is value-added services (VAS). But still, 35 per cent of the users have data servicesenabled phones. This means that there is a lot of potential for video-enabled services. As per our interaction with Indian operators, VAS is a major growth area with rural areas being the major growth drivers.
What is the situation globally in terms of demand for such services?
China and India are the biggest telecom markets. The only other market outside this region that resembles India in terms of potential in video is Brazil. Europe and the US are different markets with respect to the timing for the launch of various services, and the usage pattern too varies in these regions. Europe launched 3G services years ago, but there were no services at that time. Another problem was that the handsets then were mainly audio enabled. It made little sense for users to change over to 3G handsets only for voice services. It is video and data services that act as the differentiator.
Do you expect video services to pick up in rural areas?
I see a market. As of now, Bharat Sanchar Nigam Limited and Mahanagar Telephone Nigam Limited have launched 3G services on a trial basis but they have a limited number of subscribers. Once fullfledged 3G services are launched, I would be surprised if you do not see a higherthan-normal uptake of 3G versus other phones because video is visually much more interesting than voice.
The year 2010 is the ideal time for Indian telecom players and for us as well to have everything ready before the Commonwealth Games begin. In 2008, the Olympics were held in Beijing and a lot of applications were built on Dialogic technology. The applications were built on an interactive voice response platform with China Unicom and China Telecom. The Commonwealth Games pose an equal opportunity for the rural areas as well.
What products and services are offered by Dialogic? Who are some of your important global clients?
Dialogic enables technologies by providing a platform on which applications are developed. The company has 3,000 customers worldwide. We have the biggest number of customers in the audio industry by far. In the audio-enabling platform market, we have 50 per cent market share worldwide. Half of the world’s CRBT (caller ringback tone) ports are powered by our technology.
How has the acquisition of NMS Communications helped the company?
We have consolidated our market aggressively over the past three years. Consequently, we have managed to retain a leading position, not only from the applications but also from an underlying enabler point of view.
Who are your major competitors?
Over time, the top five players in the market have consolidated. The rest of the industry comprises niche players. These players would amount to one-tenth of Dialogic’s revenue. So, given the kind of breadth Dialogic has today, there is no clear competition.
How has the global economic downturn impacted you?
Except markets like India and China, other markets (most of Europe and North America) have witnessed a significant fall in GDP. We have also been impacted by the slowdown as our revenues have come down. We have taken some measures, including lay-offs, to control costs. We are still better off than some of our peers whose revenues have gone down by nearly 40 to 50 per cent.
What challenges do you foresee in achieving your goals?
It is very important for us that 3G spectrum is made available in India. Moreover, Indian operators need to understand how they can make money from video services. Now is the time to make the services available as the enabling handsets are available.
Finally, VAS players need to develop applications. They should not wait for the carriers to have a demand for video because most of the time they are themselves not aware of the demand.
