Robert W. Pullen, CEO and president, Tellabs, met tele.net during his recent visit to India. He discussed the technological innovations undertaken by Tellabs, the broad technology trends worldwide and in India, and the impact of Tellabs’ recent acquisition of WiChorus. Excerpts from the interview…
How strategic is the Indian market for Tellabs?
The Indian market is extremely strategic. We have been investing in India for the past 15 years.Our research and development (R&D) facilities are located in a number of areas across the country. We also have offices for sales and support, which handle customer services, technical support as well as direct sales. With the economy growing, the number of business and other users increasing, and the massive growth in mobile and mobile internet traffic, we expect India to be very strategic for our growth in the long term.
How did the company perform in 2009 amidst the global economic downturn?
The economic slowdown did impact us slightly if we compare 2008 to 2009. Our revenue was down roughly 12 per cent but our operating income was up 39 per cent. Most importantly, there was a growth in our customer base and our strategic products around the globe and in India. Optical networking has been one of our growth areas. I’ll call it business service delivery, which has been helping our customers (service providers) in delivering services to enterprises. Our most strategic area of focus has been the mobile internet, which we consider mobile backhaul as well as the mobile packet core ?? the intelligence of linking subscribers to the future mobile internet traffic.
What do you see as the major developments recently?
India has been a huge deployer of 2G wireless technology, both GSM and CDMA, and we are hopeful that it will be releasing spectrum for 3G services soon. Across the world, the deployment of 3G networks has led to an increase in internet usage and video traffic. We, therefore, have been focusing on becoming market leaders in the mobile internet segment.
We see a confluence of three events taking place around the world as well as in India:
We believe that our SmartCore technology and our mobile packet core will help transform the internet into a more personalised product. We also believe that we are at a nascent stage and the transition will occur over the next decade. With our technology, we will help the service providers to monetise content.
As has happened around the world, data usage will increase but the average revenue per user may not increase at the same rate. Therefore, the public service providers need to have an efficient form of getting information from point A to ppoint B on the mobile backhaul. Today, download is performed by E1s. In the future, it should be done via Ethernet and internet protocol to handle large amounts of bandwidth at a lower cost per bit. We design equipment using Ethernet IP in the backhaul to offer 2G, 3G and 4G services.
How exactly does Tellabs fit in? What is its role?
Today, we are a leader in the mobile backhaul space with a presence in over 120 mobile networks across the world. We recently acquired a company, WiChorus, in the mobile packet core space. Its 4G technology, which can operate in the 3G environment, works not only in Wi-Max, which is being deployed in India, and in long term evolution (LTE), but also in 3G high speed packet access. Our SmartCore 9100 platform has the capability to perform analytics on user behaviour, needs and wants. We can analyse the top 400 internet websites in the world, which can personalise content for individual use.
What are the broad technology trends globally and in India?
We believe that the mobile internet is going to explode in India. Almost 41 per cent of the country’s population is below the age of 20, which means that internet usage will continue to grow for the younger generation.
Optical networking uses a synchronous digital hierarchy (SDH) or even point-to-point dense wave multiplexing, where multiple colours of light are used to get more capacity over the given fibre. But we have invented a packet optical transport and a reconfigurable optical add drop multiplexer (ROADM). We took 88 colours of light, all operating at 10 gigabits or 40 gigabits and even beyond (in the near future, we may be able to handle 100 gigabits) and we routed signals from point A to point B in the optical domain, to ensure the highest reliability and the best restoration time at the lowest cost per bit.
Another innovative strategy implemented by us was the integration of the Ethernet technology in the optical domain. To illustrate, we deployed thousands of these nodes that carried all the voice, data and video for a big carrier in the US, thereby helping it save 50-60 per cent of its capital expenditure, 70-80 per cent of its operational expenditure and around 80 per cent of its power consumption. What we did was that we integrated the SDH equipment that used to be in a rack or a shelf onto a single card.
As for Ethernet integration, we enable an enterprise to avail of Ethernet service delivery as well as low speed Ethernet aggregation in the optical domain, and then help the enterprise save up to 50 per cent of its capital expenditure on router costs simply by using the Ethernet features in our ROADMs.
Who are your competitors in this field?
We compete with all the major manufacturers in the world. We compete with our entrepreneurial spirit and innovation. Differentiation is what the service providers need. We also compete with great customer service. One of our areas of differentiation is our network management system in hundreds of networks across the world. We have integrated all our new technologies under the control of our 8,000 intelligent network management systems.
What are the benefits of your acquisition of WiChorus?
From the network perspective, we expect that, over time, there will be different types of traffic in the mobile network.Real-time sensitive traffic such as voice or video needs a higher quality of service. With the SmartCore 9000 product family, we will eventually be able to deliver quality of service in our mobile backhaul infrastructure and embedded base, and give the carriers differentiation for different types of services. Also, one of the advantages of the SmartCore 9100 platform is that the overall throughput capacity is six to eight times better than the best-in-class packet core technology. It can handle up to four times greater packet data protocols and can do analytics of the packet streams at wire speed without reducing the overall capacity, offering more personalised services. We are the best in the industry in that space.
The SmartCore 9100 platform has been purpose-built for 4G technologies ?? both Wi-Max and LTE ?? but is also backwards compatible with 3G technology. One of the key benefits it will offer to Indian service providers is that as they migrate to 3G, they can deploy the SmartCore technology and then evolve into a 4G technology. They can scale and do an in-service migration, with the same hardware but with some additional software.
What has been the response to Tellabs’ SmartCore and mobile backhaul products internationally?
Over 120 mobile customers across the world are using our mobile backhaul. We now have five customers for the SmartCore technology and are in the process of undertaking 15 trials. The most notable customer, Clearwire in the US, is deploying 4G technology using Wi-Max, much like the major service providers that are operating in India. The mobile packet core or the SmartCore 9000 family is the core of the Clearwire network as well.
Is there a competing solution to your SmartCore platform?
The other solutions available are not as efficient as ours. We don’t believe that those solutions have the throughput that we have and can handle the number of packet data protocols or the analytics to allow personalised services in the future.
They will catch up over time but we would have already taken a considerable lead by then.
What are Tellabs’ investment plans in India?
India is very strategic for Tellabs’ growth. We have increased the number of R&D, service and sales personnel both in 2009 and this year, and we expect to continue that trend.
Are there any challenges and issues that Tellabs faces in the Indian market?
Yes. We compete against giants and so have to innovate and be more responsive than our competitors. The other challenge is to constantly innovate to get our message out as fast as possible so that we can add value to the services provided by us and help Tellabs succeed.
