In India since 1991, Nortel has been a key player in the telecom sector with clients that include Reliance Communications, Bharti Airtel, MTNL and BSNL.
However, of late, the company’s profile has become somewhat low-key. Its last contract in the Indian telecom space was in March 2006, despite the fact that operators in the wireless market have been rolling out networks in rural areas at a rapid pace.
Till 2004, the company had been plagued by accounting troubles, operating losses and management shake-ups, and was even considered a prime target for a takeover. A key factor contributing to the operating losses was Nortel’s decision to offer very low prices in order to land a wireless contract with BSNL in 2004 in its attempt to penetrate the fast growing Indian wireless market. This resulted in a total loss of $200 million, according to estimates by Lehman Brothers.
But over the past two years, the company has been trying to effect a turnaround. It has managed to hold its own in the face of stiff competition from Cisco, Nokia Siemens Networks, Ericsson and Alcatel-Lucent. It has also chalked out an ambitious gameplan for the Indian market.
Both globally and in India, Nortel’s business units are aligned into two main categories: Carrier Networks (incorporating Wireless Networks, Wireline Networks and Optical Networks) and Enterprise Networks.
Its portfolio of products and solutions for customers across these two broad categories includes voice/data networks and internet protocol (IP) telephony, multimedia services and applications, including VPNs, personalised IP services, multimedia service platforms, contact centres and voice portals, wireless broadband (from total 3G solutions to wireless LAN and wireless mesh networks), and end-to-end broadband solutions (including optical Ethernet, multi-service packet, multi-service optical, storage network and ultra-broadband access solutions).
With high speed data and mobility driving the growth of the Indian wireless industry, the company is now strengthening its enterprise solutions with a strong thrust on unified communications, building further on mobile technologies, and positioning itself as a key player in the services arena.
Nortel has formed a voive over IP (VoIP)-focused partnership with Microsoft for running a combined VoIP/messaging application infrastructure and more recently, one with IBM. The company has 12 enterprise customers in the unified communications space. According to analysts, aligning with Microsoft is a wise move for Nortel as it emerges from years of financial problems. In fact, partners like Microsoft will need to play a key role for Nortel to rebound and create a large enough presence to take on market leaders such as Cisco.
Given the low broadband penetration in the Indian market with only 3 million broadband connections while the government’s target is 20 million, there has been growing interest in Wi-Max, a broadband wireless access technology.
Among the vendors, Motorola, Nortel and Nokia Siemens have been focusing on this technology. Wi-Max is a high growth area for Nortel in particular.
“Nortel was one of the first vendors to recognise the powerful spectral efficiency and throughput gains that could be realised by combining advanced multipleinput multiple-output (MIMO) antenna technology for data transmission with a signalling technique called orthogonal frequency division multiplexing (OFDM). Currently, Nortel is conducting Wi-Max trials in India. The Indian market is extremely significant for the success of Wi-Max and has immense potential,” says Ravi Chauhan, managing director, Nortel. The only difficulty is that this technology is yet to gain traction.
Nortel is also a key player in the managed services field. In March 2006, Bharti Airtel, faced with the challenge of handling more than 100 million customer support calls every year, selected Nortel to host a full range of contact centre services, including remote management.
As part of the agreement, Nortel created a network management centre in Delhi and provided network design, integration, support and maintenance services for Bharti’s contact centre architecture.
Backed by the buoyant Indian economy and the large small and medium business (SMB) market, Nortel has also firmed up a long-term strategy to cater to the specific needs and challenges of SMB customers. India is the first country in Asia where the SMB initiative was rolled out.
“The SMB segment is going through a process of rapid growth and businesses are looking at technology to enable them to grow bigger. The company also sees growth in carrier Ethernet,” says Chauhan.
Globally, the company is making news with its provider backbone transport (PBT) technology which is rapidly becoming a global carrier Ethernet standard. It can result in a radical change in the economics of carrier networks by adding carrier-grade reliability and ease of service management to the simplicity and cost effectiveness of Ethernet.
With provider backbone bridging and PBT, Ethernet can now meet the market demand for carrier applications such as the triple play of high speed internet access, television and VoIP over a single broadband connection, as well as wireless backhaul and Ethernet connectivity services. This offers carriers a cost-effective, simple option to a more complex and costly transport technology such as multiprotocol label switching.
With a renewed focus on Wi-Max, unified communication and the wireless market, the company appears to be on the road to recovery.
