Amongst the top mobile network providers in India, Motorola has established a firm footing in the country’s telecom sector. It now intends to focus strongly on the rural segment. In an interview with tele.net, Firdose Vandrevala, who recently took over as chairman, comments on the growth opportunities in the Indian telecom market and Motorola’s focus areas in the future. Excerpts…
How do you perceive the telecom market in terms of business opportunities?
India has moved into a very dynamic growth phase with the GDP averaging 8 per cent growth annually. The government has created the right environment with the right policies. The Indian telecom industry has been an exceptional performer and today stands as the fastest growing telecom market in the world. Even though it has the lowest ARPU rate, the sector has demonstrated resilience and innovativeness in maintaining a very high growth rate year-on-year.
Companies that have shown passion, commitment and resilience over the years have seen positive results come their way. Considering we have 170 million mobile phones and about 45 million wireline connections today, and that mobile will undoubtedly grow to 500 million by the turn of this decade, there is more than adequate opportunity for all players of this ecosystem to collaborate and grow.
Rapid growth will increasingly come from new markets and rural India, where operators are adequately reassured of the demand and potential to pay for services. In light of this, connecting the unconnected has become the prime focus of most players. Building solutions and devices that serve this large swathe of untapped market with its unique needs will be a key growth enabler and business opportunity. For users, rural connectivity will enable access to new and wider markets, and productivity-enhancing information.
While voice will dominate for many years to come in India, we are optimistic that the country will soon lead the charge with new data and value-added service capabilities over broadband infrastructure ?? UMTS/3G, HSxPA, EVDO and 802.16e Wi-Max ?? and play a key role in evolving present-day voice-centric cellular networks to IP network-based next-generation technologies and services.
Along with these broadband-centric capabilities will evolve a market for customised applications and content for endusers. Already a very rapidly growing industry, this trend will gain momentum over the coming years. Finally, for the services to ultimately be consumed and to generate revenues for operators and members of the value chain, innovative enduser devices will be the key. Stylish, simple and easy-to-use multi-functional devices will give users in every market segment the power of choice.
What are the company’s future plans?
Motorola has been playing a key role at every step of the evolution of the telecom sector in India. Our investments include software and R&D work to foster an open, innovative and distributed development policy in developing future technologies and products as well as for addressing needs specific to India and other emerging markets while advancing the realisation of the vision of achieving seamless mobility across the globe. We have over 3,800 engineers in the country dedicated to such activities, and this pool continues to grow every year. The acquisition of Symbol Technologies will help Motorola enrich its enterprise mobility solutions and mobile management software portfolios.
Motorola has invested in a world-class manufacturing facility at Sriperumbedur. This facility will build cellphones and other network products for the Indian market as well as serve as an export base for other markets. Full-scale production from this facility will commence later this year.
Our Networks and Enterprise Business has been involved with building more than 40 cellular networks across India since 1995. We continue to support our key customers in their efforts to grow their reach and services in both GSM and CDMA technologies. Motorola is best positioned with a strong end-to-end portfolio for building 3G/UMTS/HSxPA and CDMA EVDO Rev. A/B networks, ensuring these solutions are highly competitive in terms of minimising initial capex as well as keeping running costs or opex to the minimum, while making available all functionality and features offered by these technologies.
Motorola is amongst the frontrunners worldwide to bring Wi-Max technology to the marketplace. We are of the view that Wi-Max can play a key role in the business plans of existing cellular operators and national ISPs. With investments in WiMax, operators will be able to deepen their rural footprint, open several new market segments and types of services in both urban and rural markets. Being IP architecture based, they are relatively simpler to deploy, scale up and operate, thus entailing lower overall capex and opex, eventually leading to quicker and better return on investment. In India too, Motorola will play a key role in bringing Wi-Max technology into the lives of endconsumers, thus enabling the widespread reach of wireless mobile broadband services across urban and rural markets.
Our Mobile Devices business continues to gain market share and momentum with a large product portfolio with a phone at every price point and for every category of consumers to meet their needs: iconic design, colour portfolio, music and style. The company has 30 products in the market today including CDMA phones.
Products like the MOTOFONE are redefining the market, both urban and semi-urban, with features and capabilities such as local language support, voice-driven menus, daylight screen displays and long battery life, to deal with real-life environment and educational/literacy constraints. On the other hand, we have stylish featurepacked handsets like the MOTOROKR E6 with world-class multimedia capabilities such as music, video and touchscreen, high resolution displays for the youth as well as for midand upper tiers of the market.
We are continuing to make significant investments to extend the distribution and reach of our phones through innovative sales and distribution channels as well as setting up retail showrooms in select cities and locations. A lot of emphasis is being given to customer service, thus ensuring that the overall end-user experience of possessing a Motorola device is a distinctive and pleasurable one.
Finally, our Connected Homes Business continues to address opportunities in emerging areas such as IP-TV, DTH and GPON-based wired broadband access technologies, all of which we believe will in the years to come create enormous opportunities as such services are rolled out to end-consumers in an efficient and cost-effective manner.
How has the company performed over the last one year in terms of customers and market share?
Motorola continues to be amongst the top three cellular network providers to customers in India. Our approach to growing this business has been supporting our existing customers in rolling out their networks and looking for opportunities that help grow our customer base in a manner that is desirable for the corporation as a whole. We have been selective in our approach and have products and technologies that can contribute to the operators’ success in the long run. Our philosophy is to partner with key customers and ensure the relationship is a win-win for both. Over the past one year, Motorola’s handsets division has gained multiple points of market share. Across our lines of business, we are focused on achieving sustainable growth.
Where does Motorola stand vis-a-vis the competition?
Healthy competition has, in fact, been one of the main contributors to the telecom revolution sweeping the country for the past 20 years. Motorola is well respected by customers and end-consumers, and is treated globally as a Tier-1 vendor. We have a rich legacy spanning over 75 years and are known for our innovation and technological superiority delivered through “must have” products, and “must do” experiences, along with a full complement of support services. Our brand is inherently associated with quality and trust. Our approach is customer centric and that of a true business partner. India is a market where there is room for all to grow in a fair and healthy manner. We believe we are a respected name in this industry and play in a manner that is consistent with enabling overall growth of the market while delivering best value to our end-customers.
What are Motorola’s strengths?
Motorola is a well-integrated company and has complete, end-to-end solutions’ capability with a variety of cutting-edge technologies and offerings for the core network and access network for operators. Our portfolio includes network and enterprisespecific solutions across all technology standards, a wide portfolio of mobile devices for rich end-user experience, and all of this is backed by a deep R&D capability, thus making it possible for an operator to use us as a common source for network and end-user devices. We have traditionally been recognised as a pioneer in wireless systems and continue to build and live up to this reputation. We have solutions that serve a wide spectrum of applications ranging from public cellular networks to mission-critical private networks for first responders such as the police, military and paramilitary forces and similar users.
With a strong and well-established position in 2G technologies, we are today very well positioned to serve 3G/UMTS/ HSxPA as well as CDMA evolution path solutions such as EVDO Rev. A/B to our valued customers wanting to make investments in such networks.
Motorola is pioneering and making significant investments for the introduction of IEEE802.16e Wi-Max-based wireless broadband networks to open up a whole new business dimension coupled with a host of new end-user personal broadband experiences. We believe wireless broadband networks capable of delivering triple-play services anytime, anywhere will be the direction that technologies will evolve going forward.
Simultaneously, we are making investments in technologies such as LTE (longterm evolution), thus making it possible to serve the expectations of our customers regardless of the technology path they find best suited to grow their business and serve their end-customers.
Motorola has made many recent investments and strategic alliances to play an active role in the development and delivery of rich content and applications for all segments of users that networks serve. We have a strong managed services business that acts as the glue that binds our solutions together and helps an operator not just build and deploy the technology, but put it into active use so that customers adopt these new services and thus open new streams of revenues from them.
Finally, our in-country investments in local manufacturing and software development/R&D ensure that we remain aligned at all times to best serve the needs of the market and offer competitively priced products and solutions.
What are the key technologies that Motorola is focusing on in India?
In India, we intend to play a leading role in the introduction of 3G and Wi-Max as we expect new investments to take place in these technologies on the cellular side. This is in addition to a continued thrust on 2G rollouts. We are also working on technologies such as non-conventional alternative power sources for mobile systems to lower the operating cost and extend the reach of mobile and broadband services into conditions and terrain where conventional power sources are unavailable or unreliable, making it very expensive to run sites at such locations.
What are some of the company’s initiatives for the rural areas?
Motorola is investing in making several mobile handsets based on the specific needs of users in such market conditions. One such product is the MOTOFONE. It combines Motorola’s award-winning design sensibility with smart features and easy functionality. As Motorola’s thinnest phone yet, measuring in at approximately 9 mm, MOTOFONE is a value-priced handset. The product’s design platform borrows elements from Motorola’s iconic portfolio and adds a flat keypad, innovative materials, intuitive interface and voice prompts in local languages such as Hindi, Punjabi, Tamil, Telugu, Kannada, Malayalam and Bengali. It is available in both GSM and CDMA technologies. Its large, high-contrast screen, powered by a revolutionary ClearVisionTM display, makes it easy to use. The changeable electronic ink display is easy to read in bright sunlight or dimly lit environments from virtually any angle, just like paper. In addition, the display is plastic, lightweight and ultra-low power, making it ideal for mobile and power-sensitive applications by eliminating the weight and breakability of glass used in LCD displays.
Further, significant investments are being made to extend the reach and availability of our phones in rural India through initiatives like BharatMoto, under which several unique and innovative alliances have been forged to reach the rural markets. These include an alliance with DCM Shriram Consolidated’s Hariyali Kisaan Bazaar; a distribution agreement with ITC e-Choupal; a strategic relationship with Bharti Teletech; a mobile handset financing tie-up on zero per cent interest with GE Money; and an alliance with Godrej Aadhar for distribution of handsets.
Motorola has broadband technology solutions in both the licensed and unlicensed frequency bands for highly cost-effective and speedy delivery of applications to promote the imperatives of the government in the field of e-education, e-health and e-governance. In the unlicensed band, we have well-tested, cost-effective and successfully deployed solutions like the CANOPYTM that enable point-to-point and point-to-multi-point delivery of broadband in a very economical manner, making it possible for an operator to recover investments within 12 to 15 months of deployment.
In our view, technology neutrality and the choice of solution should be left to the investing operator while inviting investments for rolling out networks in rural India for voice and/or broadband delivery, allowing this in both licensed and unlicensed frequency bands through part-funding/subsidy from funds such as the Universal Service Obligation Fund.
What are the immediate concerns that need to be tackled in the telecom industry?
To sustain and further accelerate the present growth momentum of cellular services, quick availability of additional spectrum is vital. The government is well aware of this fact and is in the process of getting spectrum freed up for allocation to enable growth of 2G/2.5G networks.
India has the opportunity to lead the global charge on inducting wireless broadband based on 802.16e Wi-Max technology. For this however, it is important for the spectrum policy to make available spectrum in the globally harmonised frequency bands for Wi-Max services, namely, 3.5 GHz, 2.5 GHz and 2.3 GHz. For the true benefits of this versatile technology to have widespread reach, each operator should be assigned at least 30 MHz of bandwidth.
Sharing of active infrastructure and pooling of radio frequency (RF) resources while rolling out new technologies such as Wi-Max should be permitted to ensure best utilisation of scarce spectrum as well as efficient delivery of services. It is in this context that the MVNO concept for such services should be encouraged so that the capacity benefits of such technologies are gainfully used, rather than building multiple networks that are equipped to suboptimal levels of their individual capacities.
Finally, the spectrum policy and actual allocation of spectrum to operators should be timed in a manner that no single technology has a time-to-market advantage resulting from time gaps in making spectrum available for rolling out services. Announcement of the spectrum policy and allocation of spectrum for 3G services and for wireless broadband technologies like Wi-Max should be simultaneous, thus leaving the choice of technology decision to operators, with neither technology enjoying an artificial timing advantage over the other.
