Rising Opportunities: Vendors’ views

Network and equipment vendors played a pivotal role in the rapid deployment of 5G networks during 2023. The industry undertook several initiatives to contribute to the Make in India initiative by leveraging incentives offered under the production-linked incentive (PLI)/design-linked incentive (DLI) schemes for telecom and networking equipment manufacturing. Leading players in the telecom network and equipment segment comment on the key highlights of 2023, the progress and opportunities in the evolving 5G ecosystem, the impact of the PLI scheme on domestic manufacturing and the future outlook…

 

Amit Malik

Here are some of the key highlights for Ciena in 2023:

• We reported very strong fiscal results for the fourth quarter of 2023, including revenue of $1.13 billion, of which Asia Pacific contributed nearly 14.4 per cent of total revenue in financial year 2023. India is a key contributor to our success, with growth expected to continue in the coming year.
• 2023 was also a big year for us in terms of innovation. We unveiled WaveLogic 6, the industry’s first 1.6 Tbps coherent optic solution. WaveLogic 6 will be the first to support up to 1.6 Tbps single-carrier wavelengths, deliver 800G across the longest links, and feature footprint-optimised 800G pluggables with the lowest energy consumption. We also announced the game-changing WaveRouter platform – a purpose-built coherent metro router designed to unify internet protocol (IP) and optical in the metro, enabling open application programming interface (API)-based programmability for operators to create high speed services and transport functions. WaveRouter features building-block flexibility, future-proof extensibility and improved network sustainability, including optimised dense wavelength-division multiplexing (DWDM) density with up to 55 per cent less power and up to 65 per cent less space. Notably, our local research and development (R&D) team in India played a key role in the development of the WaveRouter product – especially in designing the software on both the data path as well as the control path from device drivers, routing protocols to the management plane.
• We also reached an incredible milestone, shipping over 100,000 modems of our industry-leading WaveLogic 5 Extreme programmable 800G technology. It provides the foundations for metro, long-haul, and submarine networks and is more energy efficient, meeting the ever-increasing bandwidth demands.
• Notably, in 2022-23, revenue from our routing and switching portfolio also increased 27 per cent year on year, demonstrating strong momentum within this segment of our expanded addressable market.
• From a corporate sustainability perspective, Ciena received approval from the Science Based Targets Initiative in 2023 for the following near-term science-based targets:
• An absolute goal to reduce Scope 1 and Sacope 2 greenhouse gas emissions by 80.6 per cent by 2030 from 2019 levels.
• An intensity-based goal to reduce total Scope 3 greenhouse gas emissions per unit of capacity shipped in Gbps by 71.3 per cent by 2029-30 from 2018-19 levels.

Dr Kumar N. Sivarajan

In 2023, the company maintained its strong business momentum through significant order wins in the wireline and wireless equipment segments, both domestic and international. We began the year by winning the single largest wireline equipment order in the company’s history for supplying our state-of-the-art access and aggregation routers for Bharat Sanchar Nigam Limited’s (BSNL) nationwide IP/multiprotocol label switching-based access and aggregation network. This was followed by our selection as the sole supplier of 4G/5G baseband and radio units for BSNL’s pan-Indian network comprising over 100,000 cell sites. Our innovative 100G/100G+ alien wavelength solution was deployed in one of the largest roll-outs, comprising over 300 DWDM links. We continued to gain traction in the international markets as well. A wholesale telecom operator in Italy commissioned an end-to-end fibre network using our full range of optical networking and broadband access products, including gigabyte passive optical network, packet transport network and optical transport network/DWDM. In the US, the company successfully commissioned a high-capacity metro network with 1.2 Tbps links for a video production and distribution application.

What are your thoughts on India’s 5G progress? How have you leveraged the 5G opportunity?

Amit Malik

India recently completed one year of the launch of 5G services in the country. The two telcos that launched services, Bharti Airtel and Reliance Jio, are close to reaching their targets of pan-Indian coverage. India recorded one of the fastest roll-outs of 5G services worldwide. Airtel and Jio have also recently launched 5G-enabled fixed wireless access (FWA), which is likely to play a crucial role in bridging the digital divide in the country.

As the country moves closer to achieving pan-Indian 5G coverage this year, we anticipate almost every industry to be covered by 5G. Trials are already under way across various sectors. With the introduction of 5G in India, web traffic flows are changing and moving towards the metro and network edge, increasing the need for common routing and switching aggregation platforms. Ciena’s move to manufacture in India supports the growing local demand for this specific category of products.

Another key opportunity lies in the area of network sustainability, where we can assist our customers in providing connectivity more efficiently. At Ciena, we continue to innovate and deliver product advancements that enable power and energy savings.

Dr Kumar N. Sivarajan

Since its launch in October 2022, India has witnessed one of the fastest 5G roll-outs in the world with nearly 400,000 cell sites deployed by December 2023. Although the 5G subscriber base is still relatively low at 150 million, as per independent studies, we are one of the top 10 countries in terms of 5G signal availability. With growing pan-Indian coverage and a wider choice of affordable 5G smartphones, it is expected that the subscriber base will touch 500 million in the next four to five years. However, as in other countries, enhanced mobile broadband and FWA are the primary 5G revenue drivers for Indian telcos, and more advanced applications such as network slicing, private 5G, remote surgery, robotic manufacturing, and metaverse are yet to see any meaningful adoption. Given the expected longevity of 5G till the end of this decade, the commercialisation of 5G-Advanced (Releases 18, 19, 20) could act as a catalyst for these advanced applications.

Tejas has designed and developed end-to-end radio access and optical cross-haul products for global telecom customers deploying 5G networks worldwide. This includes a diverse range of high-power 5G radio units operating across multiple frequency bands with advanced multiple-input, multiple output functionality, ultra-converged baseband products, and support for a full range of technology options such as WDM, xPON and packet for implementing 5G cross-haul networks. Our recent wins to supply 4G/5G radio access network (RAN), access and aggregation routers for BSNL’s nationwide network will serve as a strong reference, positioning us favourably in both the radio access and backhaul segments. Tejas is the sole supplier of RAN equipment for BSNL’s pan-Indian 4G/5G network and is collaborating with its consortium partners (Tata Consultancy Services and Centre for Development of Telematics) to deliver an end-to-end 4G and 5G stack. We plan to work with our ecosystem partners, both within and outside the Tata Group, to deliver end-to-end solutions for both public and private 4G/5G networks.

What are your views on the new Indian Telecommunications Act?

Amit Malik

The Indian Telecommunications Act, 2023 is a welcome update to the laws, and Ciena applauds the government for the modernisation of its regulatory framework. Clarifying the spectrum regulatory regime and right of way will be helpful for many of our customers. Further, it is noteworthy that the government excluded over-the-top providers from this framework. The ecosystem is still growing, and it was prudent of the government to proceed cautiously to allow growth and innovation.

Equally important will be the specifics – how the agencies implement the law. Ciena will actively engage with ministries in 2024 as they begin to execute on their updated authority – especially regarding security, encryption, manufacturing and data processing. We hope to be a good partner to the government and a front runner in fostering the growth of the digital and communications market in India.

The Indian Telecommunications Act, 2023 is a welcome update to the laws. We applaud the
government for the modernisation of its regulatory framework.”
Amit Malik

Dr Kumar N. Sivarajan

The Indian Telecommunications Act, 2023 has introduced several forward-looking provisions that will simplify the development and functioning of telecommunication networks in the country. The utilisation of the Universal Service Obligation Fund, renamed Digital Bharat Nidhi, for supporting telecommunications R&D and pilot projects, is a step in the right direction. The creation of regulatory sandboxes for the live testing of innovative products and technologies will provide a risk-free platform to evaluate unconventional and disruptive ideas, thereby enabling the domestic innovation ecosystem. Besides these, the act has brought in several welcome reforms to facilitate speedy right of way permissions for telecom network roll-outs and to ensure greater infrastructure security, considering the mission-critical nature of data and applications supported by today’s telecom networks.

What initiatives/plans have you undertaken to support Make in India? What other policy measures are required to promote domestic manufacturing in the telecom domain?

Amit Malik

India is a high-growth market for Ciena, and we are manufacturing in India in support of the government’s Make in India initiative as well as to expand and diversify our supply chain. Our focus for manufacturing within the country is to meet existing demand from our local customers.

Dr Kumar N. Sivarajan

As India’s leading R&D-driven telecom products company, Tejas has been championing Design and Make in India for over two decades now. All our products are conceived, designed, developed and manufactured in India, and our vision is to become a global-scale, top-tier telecom product original equipment manufacturer from India. In order to achieve this, we are accelerating our investments in domestic R&D to ensure that we build globally competitive products. We have significantly expanded our product portfolio, which now consists of optical and packet transport, fibre access, and wireless (4G/5G/satellite communication) products. They can be used to build an end-to-end telecom network. The intellectual property rights associated with our products are all owned by Tejas and together with our subsidiaries, we have filed over 440 global patent applications in wireless and wireline technology areas. In the coming years, the company will continue to play a prominent role and contribute to India’s mission to become atmanirbhar in telecommunications.

As a leading global economy, it is important for India to have full technological control over all critical technologies and products that are used to build telecom networks. The government’s design-led PLI/DLI scheme for telecom and networking equipment is an excellent initiative that encourages design-led manufacturing in the country. This is crucial for increasing domestic value addition, enhancing self-reliance, and strengthening national security. We are delighted to have received approval under the scheme and believe that the government’s forward-looking programmes and policies such as the Bharat 6G Alliance, the PLI scheme, Preference to Make in India, Trusted Sources Mandate and the Telecom Technology Development Fund, if effectively leveraged and implemented, will help the country emerge as a global technology and manufacturing leader in the telecom sector.

As a leading global economy, it is important for India to have full technological control over
all critical technologies and products that are used to build telecom networks.”
Dr Kumar N. Sivarajan

What will be the key growth drivers for the telecom network and equipment manufacturing industry during 2024 and beyond?

Amit Malik

The digital infrastructure landscape is set to undergo a significant transformation, facilitated by the synergies of artificial intelligence (AI), cloud and digital media. The year 2024 will be characterised by a blend of technological advancements and emerging challenges, reshaping the way businesses and individuals interact with digital technologies. The key growth drivers will be:

• AI, which will revolutionise infrastructure through the hyper-optimisation of resources, predictive maintenance, and automated security, leading to enhanced efficiency, cost savings and proactive threat management.
• Cloud computing, which will shift the focus towards edge computing for handling latency-sensitive applications such as internet of things and augmented reality/virtual reality (AR/VR), and hybrid and multi cloud strategies for optimal resource utilisation.
• Digital media, resulting in a revolution with the advent of immersive AR/VR experiences and personalised content delivery. It will require robust and scalable infrastructure capable of real-time processing and advanced data analytics.

Dr Kumar N. Sivarajan

In 2024, India is expected to witness a strong capex spend on telecom equipment, fuelled by ongoing 5G roll-outs, rapid increase in fibre-broadband penetration, and large public investments to expand broadband connectivity in rural areas. The union cabinet recently approved a budget of Rs 1.39 trillion for extending BharatNet to every village in the country. In order to cater to the consequent bandwidth surge, both communications service providers and enterprises will continue to augment the capacities of their metro and backbone networks by investing in terabit-scale optical transmission, packet switching and routing equipment.

Given the strategic importance of a secure telecom infrastructure, the government continues to have a strong focus on achieving atmanirbharta (self-reliance) in telecom equipment, for both the wireless and wireline segments. Besides accelerating growth in the domestic telecom market, this has created an excellent opportunity for Indian companies such as Tejas to gain economies of scale and capture a meaningful portion of the approximately $200 billion annual worldwide spend on network equipment.