Interview with Sanjay Nayak, MD and CEO, Tejas Networks

Despite the Covid pandemic, 2020 turned out to be a good year for the Indian telecom network and technology vendors. Automation, softwarisation and virtualisation emerged as key trends while telcos took steps to make their networks future ready. Network upgradation, especially in anticipation of 5G, will continue to be a key theme in 2021 as well. Sanjay Nayak, MD and CEO, Tejas Networks, shares his views on the performance of the sector in 2020, the key growth drivers, opportunities in the evolving 5G landscape and the future outlook…

How has the Indian telecom technology landscape evolved in 2020? What were some of the key business highlights for your company?

Covid-19 lockdowns and associated mobility restrictions during 2020 highlighted the strategic importance of the telecom industry, and the need for robust, high capacity networks. It brought about a marked change in network usage habits. Work-from-home and learn-from-home became the norm and consumers increasingly relied on the internet for their daily needs, socialising and entertainment.

Overall, it is estimated that the average daily data consumption in India has grew by at least 30 per cent in 2020 and there is a sharp rise in demand for new home broadband connections based on FTTx (fibre-to-the-home/office) technologies both in cities and small towns across the country. The growth in broadband traffic called for increasing investments by telcos in DWDM and OTN technologies to augment capacities in their metro and long-haul networks. Meanwhile, telcos continued to focus on cell tower fiberisation and densification to efficiently cater to the growth in 4G traffic, which has continued unabated over the past few years at an average rate of 50 per cent year on year.

From a business standpoint, 2020 was a good year for Tejas as we recovered from our weak performance. We continued to focus on our international business and registered several multi-million dollar wins in Africa and Southeast Asia. Our ultra-converged broadband access/edge product and highly differentiated multi-terabit OTN/DWDM products continued to gain significant traction in these markets. In India, we were selected by major Tier 1 operators as a GPON equipment supplier for their pan-India FTTx roll-outs, which should have a positive impact on our revenues in the next few years. Besides FTTx, we signed rate contracts with Tier 1 telcos to supply OTN/DWDM products for its metro capacity expansion.

What were the key technology trends that emerged amidst the Covid-19 pandemic? Which of these will continue to shape the post-Covid world?

There are three broad trends that have emerged as a result of the Covid-19 pandemic and are expected to continue in the post-Covid world as well. First, ubiquitous broadband infrastructure has become a national priority for all countries since Covid-19 has accelerated the digitalisation of economies and societies. FTTx is now being considered as an essential service, and its adoption has significantly accelerated.

Second, Covid-19 has created huge geopolitical turbulence. Telecom is now being treated as a strategic sector with serious national security implications. Hence, governments have become more conscious of which countries they want to do business with and from which vendors they should source their equipment. Operators around the world have realised the need for building secure and trusted networks, and telecom service providers are increasingly looking to diversify their supply chain risks.

Third, under its new Atmanirbhar Bharat theme, the Indian government has increased its focus on “Design and Make in India”. It is demonstrating renewed vigour to nurture a strong and indigenous ecosystem of domestic product companies and manufacturers. During the year, we saw several announcements such as the expansion of PLI’s scope to include the telecom equipment industry and stricter enforcement of Preference to Make in India (PMI) in major government procurements.

What are your views on India’s readiness to roll out 5G services? How are you engaging with your partners on this front or contributing to the overall ecosystem?

We believe that 5G roll-outs in India are still a couple of years away, since we are yet to draw full benefits from 4G and FTTx networks. In terms of network readiness, there is some catching up to be done, since we need deeper fibre connectivity to cell sites, so as to have a high capacity backhaul network, which is an essential foundation for 5G. We also need to develop the right use cases for India, which will take some time to evolve. We believe 5G roll-outs will start happening in a meaningful way from next year.

With its strong software and design talent pool, India has all the necessary elements to emerge as a world leader in 5G. This presents an opportunity to help create and nurture a complete domestic ecosystem for 5G, which includes chips, handsets, wireless/optical infrastructure and software for an indigenous network. Moreover, 5G being an all-pervasive network of IoT will have enormous security implications. Hence, it is critical to use trusted equipment and software.

What are your views on the government’s Atmanirbhar Bharat mission? How are you contributing to this mission? Do you have a policy/regulatory wish list on this front?

The mission is a welcome step and will give a massive boost to indigenous telecom R&D and manufacturing in the country. As India’s leading R&D-driven telecom products company, our indigenously “Designed and Made-in-India” optical, broadband and data networking products are deployed in all large telcos and mission-critical networks in the country. We are the largest telecom equipment supplier for many projects of national importance such as BharatNet, Railway Wi-Fi and the National Knowledge Network.

The government already has a lot of forward-looking policies, and the need of the hour is tighter implementation of these policies. We should focus on R&D and IPR creation since this will create long-term value and make us truly self-reliant and secure.

Going forward, how do you see Indian telecom networks transform to become future ready? What will be the key opportunities and challenges?

The pandemic has catalysed the stagnant home and SME broadband market in India. Going forward, we expect to see significant growth happening in this segment with massive countrywide roll-outs of GPON/10G-PON-based fibre broadband networks. ARPUs offered by fixed broadband services are at least 4x those of 4G, which is a huge incentive for telcos to invest in fibre broadband networks.

In terms of optical technologies, we expect a strong demand for carrier-grade packet transport and carrier Ethernet (CE2.0) equipment, metro/long-haul DWDM products supporting higher speed 200G/ 400G/600G wavelengths, and terabit-scale OTN and packet switching technologies for better capacity management.