"Nortel Networks Can Create a Unified Customer Experience that Goes Beyond Products and Services,"

Clarence J Chandran, chief operating officer (COO), Nortel Networks, reports directly to John Smith, CEO and president, Nortel Networks and is based in Boston. He has the global responsibility for Nortel Networks day-to-day operations with carrier, service provider and enterprise customers, including sales, marketing, R&D and customer care. He is also responsible for the integration of acquisitions, human resource and information systems. Chandran joined Nortel Networks in 1985 from Bell Canada where he started his telecommunications career in 1973. During his tenure at Northern Telecom Canada (1985-1990), he held key appointments including vice-president sales, service and engineering, for the DMS public switching product line; vice-president major accounts, and director of marketing for the Meridian business communications product line, among various other portfolios. Besides, Chandran was a member of the Tri-Lateral Task Force on higher education collaboration involving the US, Mexico and Canada in support of NAFTA. 

During the first week of November, Chandran visited four cities in India to discuss the country's potential as an Internet driven economy, with top level government and business leaders and was the keynote speaker at Bangalore IT.com 2000. At the forum, Chandran shared Nortel Networks vision of building the high-performance Internet. "We are putting our money where our mouth is when it comes to India; we will invest in India's Internet infrastructure, grow its Internet workforce, stimulate technology exports, and allocate a percentage of network bandwidth to educational and social initiatives," stressed Chandran during his India visit. Clarence Chandran in converation with Voice & Data …

Our belief is that the "I" factor (I-Internet & India) is core to your strategy for future growth? Especially, when you have some of the key people at Nortel, like you, Anil Khatod, president, Global Internet Solutions, Service Provider & Carrier, and Kannankote Srikanth, president, Professional Services, at the helm of affairs. How do you view this? 

We do believe that the Internet is at the very core of our strategy for growth in the future. We also believe firmly that the Internet will play a crucial role in the growth and development of India. There is not only a tremendous potential for Internet usage in India, but there is also the need for it. With key personnel like Anil and Srikanth at the helm of affairs, we are poised to realize the potential in the market to the fullest. India is a strategic country for Nortel Networks since it has the potential to lead Asia in terms of software exports and information technology talent. The spotlight is on India with all companies and countries competing for information technology talent and R&D Lab expansions. From our perspective, we see a tremendous potential in India in terms of people, ideas and networks. First, with the Indian population of 1 billion, if the capacity of education is increased, then the supply can significantly increase. Second, 40 percent of Silicon Valley start-ups are by Indians and if we can provide leading edge infrastructure and entrepreneurial environment, we can see similar success stories being created here in the new economy.

How is India seen by the technology community? 

I see India as a tremendous base for intellectual capital, as well as a big market for products and services. In addition to the advantage in cost, the reason for this prioritization is that Indian society has always emphasized on education and academics, which has resulted in a highly skilled workforce. This has led to the global recognition that India provides some of the best technical talent. India has world class managerial talent and one of our strategies is to have a run of leaders from India. India should not be viewed as just another outsourcing base.

Competition from new data companies has seen the first big casualty in Richard McGinn of Lucent Technologies. What about Nortel? Would you be splitting Nortel too? 

Nortel Networks is a successful and diverse company with multiple growth engines including strong businesses in optical, wireless, e-business and local Internet. The company has no plans to split itself up. 

Global networks are converging-voice and data, wireless and wireline-forming consolidated, cost-effective, packet-based networks that are easier to manage, maintain and modernize. How would you view convergence, as Nortel along with Lucent have come from the telecom world, while others have come from the datacom world? How do you see yourself in competition against the Ciscos and Lucent? 

Succession, Nortel Networks convergence solution, creates successful futures by delivering next-generation packet networks that combine the best of the Internet and today's telephone network. This advanced switching and routing architecture creates an economic engine by delivering today's high value telephony features and tomorrow's advanced multimedia services over a unified packet infrastructure, reducing capital expense and the cost of network ownership.

Nortel Networks vast experience in delivering carrier grade telephony on a global basis, clearly positions us to lead in the marketplace. Nortel also has extensive data experience. For example, Nortel was the first to market with ATM technology. We also gained substantial routing experience from the Bay Networks acquisition. Another leadership edge is Nortel's worldwide professional service organization, which delivers worldwide systems integration and implementation of packet networks. In fact, Cable & Wireless is quoted as saying this service capability is a major reason why we won the recent $1.4 billion deal.

Nortel Networks has an additional leadership advantage from our close working relationships with some of the world's largest carriers, including Cable & Wireless, AT&T, British Telecom and SBC. These relationships enable us to clearly understand customer business drivers and requirements.

You have two major lines of business: the enterprise solutions and service provider/ carrier group solutions. How has each of these lines of businesses contributed to your total revenue? How do you see the mix shaping up? 

Nortel Networks is a global Internet and communications leader, with capabilities spanning optical, wireless, local Internet and e-business. Nortel Networks serves the emerging and existing needs of service providers, carriers, dotcoms, small and medium sized businesses, and large corporations in more than 100 countries and territories around the world.

We are a dominant player in this market. Taking a closer look at inside the region, there are multiple market segments, priority for services in various countries, regions within countries. Our plan is to work closely with businesses in all segments and regions to help them compete and be successful. Nortel Networks has a unique advantage in being able to do that through leadership in building networks of any type and around the world. Nortel Networks can create a unified customer experience that goes beyond products and services. By doing so, Nortel Networks will enable customers to redefine Internet economics and value for both themselves and their customers.

You have introduced a third line of business-the professional services. Increasingly, the success mantra in professional services is independence. What is the logic behind getting into professional services in a formal manner? It is just the opposite of what the Cisco's of the world do.

Professional services are a focus for Nortel Networks. When we say professional services, we are referring to the consulting side of our business. In other words, the global professional services organization works with enterprises and service providers alike to counsel them on the best way to design, build, install and manage their networks. 

Increasingly, we are seeing a trend towards network outsourcing. In some cases, this means outsourcing the management of the network to Nortel Networks. In other cases, it means businesses outsourcing the management of their networks to service providers. 

According to the industry analyst firm Dataquest, the global market for professional services will grow to $176 billion by 2003. With more than 20 years experience in both enterprise and service provider networks, who better than Nortel Networks to provide counsel and hands-on service?

Our ability to help CIOs determine their network needs, of course, helps pull through sales of Nortel Networks equipment. This is not to say that our professional services organization only recommends Nortel Networks equipment. Quite the contrary: they are adept in multi-vendor environments. However, if a CIO is faced with two comparable solutions and he has been pleased with the help he has received from Nortel Networks professional service organization, he will be more likely to choose the Nortel solution.

In Europe, an estimate by ABI research puts that the dollar value is in long-haul networks. But this segment of the market will have only a twenty one percent CAAG rate, while access networks, enterprise networks and metro networks will all have CAAG rates of over fifty percent. What is your view on this?

The "Local Internet", as we call it at Nortel Networks, is the coming together of the optical backbone, optical metro, and Internet enabling capabilities from content management and IP services, through IP routing, Internet Telephony, switching and high-speed access solutions, within campuses, cities, and metropolitan environments. Nortel Networks and its partners offer the only complete end-to-end solution for broadband today, by packaging cornerstone cable telephony and data, optera optical transport, accelar/versalar IP infrastructure, shasta broadband service platforms, succession IP telephony, preside network management, ASP platforms and global professional services into turnkey solutions that maximize revenue streams and reduce risk. As mentioned previously, Nortel Networks has created a "mix" in which we no longer concentrate solely on enterprise solutions or carrier solutions, instead we have created these categories that include the combinations of the products that make sense together. For example, our optical solutions can be found in the wireless Internet, the local Internet, e-business and the global professional service categories. 

What will Nortel's offering be in the arena of multi-service operators and the upcoming new markets? What can the industry expect from Nortel in the next 6 to 18 months? 

As Asia invests in the Internet economy, Nortel has seen an explosion in demand for wireless Internet, 3G infrastructure and our optical Internet products. Nortel Networks had revenues of $21.3 billion in 1999. We have plans to invest heavily in India and plan to double the size of our business in China this year. Nortel Networks have a number of initiatives that will be launched in the next 12 months that will continue to contribute towards building the high-performance Internet that is more reliable and faster than ever before in this region. These are key offerings and initiatives that we hope will play a big role in the development of telecommunications infrastructure with the liberalization of the telecommunications industry in Asia.

Will the negligible involvement of America in m-commerce affect the latter's growth? 

Wireless is growing in leaps and bounds, and Nortel Networks is right in the middle of it all. Nortel Networks has leading market positions in all current wireless technologies (2G/2.5G)-GSM, GPRS, 1XRTT, TDMA, CDMA-and is building its position in 3G networks, through trials and demonstrations and network supply contracts (BT Cellnet in UK, Airtel in Spain). Nortel Networks optical Internet capabilities are essential to redefine mobility. To deliver high capacities (i.e. 56 Kbps and higher) to wireless appliances, wireless networks must have an optical backbone behind it to allow them to deliver data, video and voice successfully and cost effectively. Also, Nortel Networks technology is being used around the world to upgrade existing wireless networks and in many markets, Nortel Networks is conducting 3G wireless trials (UK, USA, France, Canada, Australia, etc.).

Content is supposed to be a big game. What is Nortel's strategy for content infrastructure? Or will you leave it to the small companies and IT guys? 

Nortel Networks is fully engaged in building the next-generation content infrastructure of the Internet. With the recent establishment of the company's content networking business unit, Nortel Networks has taken a leadership position in ensuring that web content gets to the users via the fastest means possible. Using new technologies and techniques, the Nortel Networks Content Networking Business Unit is creating an end-to-end solution to bring users much closer to service providers, resulting in more revenue for content providers and a much better web session for users.

What would Nortel's thrust be in the next 4-5 years? 

Nortel Networks will continue to listen to our customer's wants and needs, and do our best to produce 'above' their satisfaction levels. Without a doubt, Nortel Networks will continue to build the high-performance Internet with the fastest, longest and widest pipes. Nortel Networks will continue to drive the high-performance Internet making it more reliable and faster than it is right now. Nortel Networks will redefine the economics and quality of networking and communications, while enabling the coming deluge of e-business.

Today, there is a trend towards funding entrepreneurship? For instance, Sycamore has investments in Tejas Networks and Tektronix in Cellstream. It is understandable that you have a hundred percent subsidiary in India, but would you be looking beyond that too? Would you be investing in companies in India or acquiring them? Though you may not be having such plans, for the sake of hypothesis, which would be the type of the Indian companies that could give you a competitive edge?

At any point of time we are contemplating over 100 acquisitions around the world. Nortel has been acquiring companies worldwide and will do so in India as well. We have criteria for acquiring any company. First, getting really disruptive technology. Second, getting top talent. Third, to increase speed to market, and of course to increase revenues and profits.

Ch. Srinivas Rao