The telecom industry is undergoing a tough time and companies are trying to
reinvent themselves to boost their productivity. The worldwide equipment market
has declined by 40 percent in two years and equipment vendors are struggling
against serious financial challenges to remain profitable. Companies have no
other option but to optimize their resources.
In this background, Alcatel has undergone a restructuring to bring in more
operational flexibility. The company has restructured its business according to
communication solutions, thereby streamlining operations. From four divisions of
carrier networking, optics, space and components, and e-business, Alcatel has
restructured its operations into three divisions–fixed communications, mobile
communications, and private communications. The first focuses on fixed networks
and optical networks, the second on mobile networks, mobile phones, and wireless
transmission, while the third division focuses on enterprise solutions, space
solutions, transport solutions, and integration and services.
In 2003, Alcatel is focussing on fixed broadband, solutions integration, and
multimedia mobile. But in India, the focus is on fixed broadband, IN and
solutions integration.
Fixed Communications
In India, the company is banking on broadband and IN as these are the hot
areas for FY 2003-04. The company is very strong on the fixed line switching
business as it has a market share of around 50 percent. In broadband, the
company has bagged a 6,000-port network order from Sri Lanka and is planning to
leverage its presence in the Indian market when broadband deployment is made in
the country by the incumbent operator.
![]() |
NUMERO UNO OF FIXED COMMUNICATIONS | ||
Item | Worldwide Standing |
India Position |
|
Wireline Switch |
In Top 5 club |
Supplied 1.2 million lines in 2002 |
|
Broadband | Number one in Broadband Access |
In India, the market is opening up as both MTNL and BSNL has large plans for ADSL. |
|
Intelligent Network |
Number one in IN |
BSNL has come out with a large tender and is opting for 5 additional platforms |
|
Optical Networks |
Number one in optical networking (DWDM) |
Received orders from Bharti |
Mobile Communications
Alcatel was late in entering the GSM space and was unable to make its mark
in India except bagging the Koshika order. But the company plans to make up for
the loss now. It has formed a joint initiative called Evolium with Fujitsu for
3G infrastructure, where it is developing a single multi-standard platform for
GSM/GPRS/EDGE and WCDMA. The product is undergoing re-engineering every nine
months for continuous cost reduction. Apart from infrastructure, the focus is
also on applications as it helps in adding value. To demonstrate openness and
interoperability, the company has tied up with more than 170 partners for
infrastructure and content.
In the mobile arena, the company has deployed 3G Reality Centers across the
world to build interoperable solutions. 3G Reality Centers have been deployed at
Velizy in France, Plano in the US, Sao Paulo in Brazil, Adelaide in Australia,
Tokyo in Japan, Seoul in South Korea, and Milan in Italy. Plans are to launch
more such centers at Rijswijk in Netherlands, Stuttgart in Germany, Malmo in
Sweden, Shanghai in China, Cascais in Portugal, Kuala Lumpur in Malaysia, and
Taipei in Taiwan. All this will help in developing a wide array of services in
different geographies through 3GRC partner program and repeat success stories
around the world.
The partner program has been created for developing a strong local ecosystem
of partners for providing value-added content for augmenting ARPU. In field
trials, the company is providing services like videophony, video conferencing,
video mailbox, video messaging, presence/phonebook, infotainment, gaming, and
live sport events.
On the handset front, the company is focussing on GPRS and WAP. This year,
the company is planning to launch One Touch 535 MMS, One Touch 735 camera, One
Touch 332 Color W@P, and One Touch 331 W@P. The company has recently launched
One Touch 320, One Touch 525 GPRS, One Touch 526 GPRS InFusio, and One Touch 531
Color. It is planning to launch a few models in the Indian market.
On the space front, the company hopes to close the Agrani and Gagan deals.
The Gagan project will get completed by 2008 and open up new opportunities. All
this will help the company make a recovery and be ready for the next phase of
infrastructure deployment.
"Market revival is just one year down the line"
Gerard Dega executive vice president, Alcatel EMAI
Are we seeing signs of revival? If yes, when do we see the worldwide
market picking up?
Europe is in a bad shape. In the US, there is consolidation and the market
has been flat for the last three years. In Asia, there has been an increase in
demand but there is some saturation in few regions. It is difficult to say that
it will pick up this year. But it will definitely pick up in 2004. At present,
service providers are not investing in GSM equipment because the market is in a
bad shape and they are waiting for UMTS to come. As a result, the network is
becoming worse and currently we are at the bottom of the curve. But the market
will go up once the service provider starts investing in the infrastructure.
What
is happening on the Evolium range of 3G switches, where you have tie-up with
Fujitsu?
The company has deployed 2,000—3,000 stations in Japan, France, and
Portugal. In Japan, the company has the largest installed base of Evolium
switches. At present, these networks are not commercial but are expected to be
so in 2004—05. The company is also developing applications along with service
providers and is confident about the future.
How do you compare the Indian market with China?
The Indian market is a difficult and frustrating market. The opportunity is
huge and there is also an aggressive competition between players and the local
industry. The clients are good at negotiation skills as know how to extract
maximum from their suppliers.
In terms of software competence, India is ahead but in market size, China is
much larger and has invested much more in infrastructure.
What are your major plans in India?
In broadband, BSNL and MTNL are modifying their expressions of interest. We
plan to participate in broadband network of the incumbent operator. We are
participating in a major way in the NIB Phase II project.
We are serious about making the Agrani project a success
Pierre De Bayser senior V-P (marketing and sales) Alcatel
Space
The slowdown has also affected the satellite industry. So
how are things moving on the satellite front?
There has been decrease in orders for all satellite players. Last year, we
had three satellite orders whereas on an average we used to have around 6-7
orders. On the satellite front, navigation satellite has an increasing trend
whereas all other segments like telecom, military, and meteorology are
decreasing.
Has
economic slowdown impacted your R&D activity? What is your spend in R&D?
On the R&D front, we are improving our R&D project after every three
years and it is high on our priority. The percentage on R&D has not changed
and it has been constant. We have been investing around 18 percent of our
turnover in R&D in 2002.
Subhash Chandra’s Agrani project has been delayed for a
long time. What is the status on that?
The company is looking at a quick finalization of the Agrani funding, which
is led by IDBI and has ICICI and SBI as it partners. The company is waiting for
financial closure and waiting for the banks to take a final decision. There was
a high-level meeting recently where clarity was sought on some issues.
Agrani is a common baby so we want to make it a success. The
project has been going on for a long time and both Alcatel and Zee will find a
solution.
GAGAN–Navigation Project
Presently,
there are two satellite navigation systems–Global Positioning System (GPS)
of the US and Global Navigation Satellite System (GLONASS) of Russia. But
both these navigational systems are under military control. Alcatel is playing a
leading role in GNSS1/ EGNOS and GNSS2/GALILEO. The company is the prime
contractor and system designer for EGNOS and is the founding partner for
GALILEO. GNSS1 is the first-generation global navigation satellite system for
satellite-based positioning and timing. It comprises regional complements to the
GPS and GLONASS constellations designed to improve performance and security and
meet the needs of the civilian users. EGNOS is the European component of GNSS1
and will be based on a fleet of geostationary satellites and ground
infrastructure. EGNOS will have three GEO satellites and 48 ground stations. The
system is designed to meet the needs of the international civil aviation
community as well as terrestrial and maritime users. In EGNOS, the augmentation
system is better than the existing system and one can expect an accuracy level
of 6x6m from the present level of 15x15m.
GAGAN (GPS and GLONASS Augmented Navigation) is the future
Indian satellite-based navigation system and is similar to EGNOS in Europe and
WAAS in the US. GAGAN would be the first step towards GALILEO and is considered
to be an opportunity for cooperation between India and Europe. The project is a
necessary step for air traffic development but can be used for train
infrastructure and others.
GAGAN project is managed by Airport Authority of India (AAI)
and Indian Space Research Organization (ISRO). To be implemented in three
phases, the total cost of the project is around 100 million euros. The first
phase is for building the technology demonstration system (TDS) and it is
expected to cost around Rs 100 crore. The second phase will focus on measurement
with TDS while the third phase will focus on installing the full system.