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A Big Year

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VoicenData Bureau
New Update

It was a great year for Ericsson with the company growing by 59.9%, from Rs

5,004 crore in FY 2006-07 to Rs 8,000 crore in FY 2007-08. Of this Rs 150 crore

came from voice solutions and Rs 75 crore from the broadband segment, with the

remaining chunk coming from wireless.

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The highlight of Ericsson's performance last year was its relationship with

Bharti Airtel. According to V&D estimates, Bharti spent close to 70-73% of its

investments in equipments on Ericsson. The two-year, $2 bn deal with Bharti

Airtel was signed for network expansion. This is the company's largest deal till

date.

Ericsson was selected by Idea Cellular as the sole supplier of its GSM

network in Mumbai. The deal with Idea Cellular marks Ericsson's first network

win in Mumbai and completes its footprint in India's 23 telecom circles. It also

entered into a managed service partnership with Idea.

Last year the company signed a turnkey contract worth $1.3 bn to supply GSM

and WCDMA/HSPA equipments and related telecom services to BSNL. Apart from other

contracts including IN and VAS deals with Vodafone and a deal with Spice Telecom

to provide push email and personal information management services via its

hosted solution.

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Ericsson 2

A decline in the CDMA segment has forced Ericsson to discontinue its CDMA

wireless segment. The company is not taking any new order in this space.

Ericsson plans to increase its base stations from 35,000 last year to around

45,000 this year.

Though very little of Ericsson's revenue has come from broadband, currently

it is a focus area for the company. And the market opening up this year should

bring an increase in revenue from this segment.

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Among its prominent contracts this year is a three-year deal with Aircel for

the delivery of its hosted consumer push email service.

Globally, Ericsson recorded a slower growth and posted an outlook for

flattish mobile infrastructure market. The company experienced pressure on

profit margins mainly because of weaker sales of mobile network upgrades and

expansions, combined with high sales of new network build-outs.

The company is investing significantly in mobile broadband. Ericsson's

Gramjyoti Rural Broadband Project is part of this endeavor.

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India accounts for around 6% of the total sales for Ericsson and this is

mainly because the proportion of new networks built in India is dramatically

increasing. However, this along with a weaker dollar also puts pressure on the

company's margins.

Ericsson's multimedia business is still in its initial stages and is likely

to be given impetus by its acquisition of Tandberg Television. Tandberg

Television was consolidated from May 2007.

We grew faster than the market



PRESIDENT, ERICSSON



Mats Granryd

Address: Ercisson

Forum, DLF Cybercity,



Sector-25A, Gurgaon 122002, Haryana, India

Tel: +91-124-2560808 Fax:

+91-124-2565454

Website: www.ericsson.com/in



Highlights
  • Bagged Rs 8,000 crore

    from Bharti, the largest deal ever for Ericsson
  • Selected by Idea as

    the sole supplier of its



    GSM network in Mumbai
  • Won an order worth Rs

    5,200 crore to supply GSM and WCDMA/HSPA equipment to BSNL
  • Bullish about 3G

What were the highlights of the last

fiscal?



It has been a fantastic year for us and we grew faster than the market.

One of the major reasons for this was our partnership with the right

players. We continued with our relationship with Bharti and bagged a Rs

8,000 crore deal, which is the largest deal ever for us.

Last year also saw us winning a turnkey

contract worth Rs 5,200 crore to supply GSM and WCDMA/HSPA equipments and

related telecom services to BSNL. The company also got orders from BSNL, and

IN and VAS deals from Vodafone. Ericsson was also selected by Spice Telecom

to provide push email and personal information management services via its

hosted solution. We also signed a deal with Idea Cellular as their sole

supplier of its GSM network in Mumbai. We have also signed a three-year deal

with Aircel for the delivery of its hosted consumer push email service.

This year we would be focusing on the

broadband segment, as well as, work with Bhutan Telecom for its WCDMA/HSPA

network.

In 2006-07, you started to develop

bio-fuels as a source of power for wireless networks in rural India. How far

have you developed in the plan?



Power is a scarce commodity. About 23 base stations in rural areas in

the Latur district of western India are now being powered with biodiesel

produced from waste cooking oil at a plant in Hyderabad. Further, we are

planning to increase the number of base stations to 40-50 by the end of this

year. The project was started in partnership with Idea Cellular and GSM

Association's Development Fund.

You have embarked on a rural broadband

project. What are the developments in this regard?



We launched the 'Gramjyoti Rural Broadband Project' in Vadugambadi in

Tamil Nadu, 60 kms from Chennai. It is basically a pilot project, which

seeks to introduce the benefits of WCDMA/HSPA technology in rural India and

connect communities to high-speed Internet services. And, eventually, we

plan to bring about 1,00,000 villages under the network. Villages in the

Gramjyoti project area will be able to use broadband applications such as

telemedicine, e-education, e-governance, and access high-speed Internet

services on the 3G platform.

What are the challenges you are facing in

the Indian market?



3G should be the next big trigger in the current year; otherwise it is

going to be business as usual. Any delay in 3G is going to be a challenge.

The sooner we get it the better. We are prepared to offer services in the

network and multimedia services. We have recently acquired Tanberg for our

multimedia business.

You have recently started hosting

services. What has been the progress on that front?



We do a lot of hosting on VAS for operators. This is a new phenomenon.

Basically it is like a payment exchange for our customers in India, as



well as abroad. The highlight of this initiative is that most of the
operators signed up for this service. It is part of our managed services and

gives operators easy access to services, allowing them to focus on their

core business.

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