As a passionate engineer, he considers himself fortunate to be leading a technology company at a time when digital advancement is transforming everyday lives. An alumnus of IIT Kanpur and University of California, Berkeley, he completed his PhD in Materials Engineering from the Rensselaer Polytechnic Institute, USA before joining Sterlite Technologies Ltd (STL) in 1995.
The winner of Voice&Data Pathbreaker of the Year Award for 2019 and STL CEO, Dr. Anand Agarwal, shares his views with Shubhendu Parth on the company’s journey, new business opportunities and Make in India. Excerpts:
V&D: STL has covered a very long ground—from being an optical communication products company to becoming a data network solutions provider. How would you describe this journey and will you follow a different growth path if you are to repeat the success again?
Dr. Anand Agarwal: STL has been a dynamic company at every step of the way. When the world was thinking of information highways, we were leading with optical communications. Now that the whole world is likely to get networked and everything is becoming data, we are driving ourselves to be the leading data network innovator of the world. This has been and continues to be a fabulous and exciting journey for me. I am blessed to have been part of and architecting major portions of this journey. The last decade was great for the company. We transformed the company from a “wire and cable manufacturer for telecom and power industries” in 2010 to “global data networks innovator” in 2020.
We also scaled our fiber business from six million km in 2010 to 50 million km now—and scaled our cables business from about two million km to more than 30 million km—a 15x growth!
In the meantime, we started and scaled a new power transmission infrastructure business called Sterlite Grid between 2010 and 2015, and later demerged it. We then started a new business on system integration and services in 2015, which has now scaled to over Rs 3,000 crore in less than five years. We also integrated new capabilities into the company: Elitecore for software capabilities, Metallurgica Bresciana for pan-European cabling and IDS for data centre technologies. We have also entered the wireless and 5G space with the investment in ASOCS, a virtual RAN company in Israel and have a collaboration partnership with IIT Chennai on the 5G platform. Alongside this, we have added strong capabilities in technology, strategy, marketing, and transformation, and have strengthened our global talent across verticals and geographies.
Our customers, both in India and worldwide, have been the biggest inspiration during this disruptive journey. We have seen them bring out generations of the best technologies to deliver continuous improvements to the networks. Today the telcos, enterprises, citizen networks, and cloud companies are moving their networks from voice communications to data networks to artificial intelligence-based, virtual software defined networks on the edge—the upcoming 5G—fifth-generation network.
With 5G, we are getting a chance to redefine end-to-end data network solutions. And, we have designed STL to be the uniquely capable company with all aspects of great access- and edge-capable network. We are capable across wired and wireless, technology led-design and process-led robust implementation. We have the highest capability and most affordable networks for urban and rural situations, running across compute, memory and storage along with top-end connectivity.
This wide range of capabilities has been built over the last decade and it has set us up for the next decade of data network growth. This is just the beginning of the data network journey and given a chance to keep bringing positive disruption in the industry, I and everyone at STL will absolutely embrace it always.
V&D: Indian telecom and technology space today is at its most dynamically vibrant stage, witnessing an explosion in mobile data usage, upcoming 5G and associated technologies. How do you look at this from the STL business perspective?
Dr. Anand Agarwal: It’s indeed a very innovative time. Technologists always innovate, but this is the time that all parts of the society are readying for amazing innovation. Everything is becoming data, and everyone and every device are getting networked. We are seeing health records, fitness, movies, music, education, social relationships, agriculture—literally everything becoming data. So much data has to be transferred, and that too in a converged fashion. This needs intensely dense wireless capture at the edge/small cells and very high capacity optical-fiber-based data backhaul to the data centers and beyond.
All of this has to keep re-adjusting by the millisecond as users are on the move and switching use cases. This is exactly the situation we have been planning for. It is also the area of our expertise—as a nation India has been focused on software, analytics and AI, and as a company, we have been focused on optical communication and services. Bringing these together with wireless access solution and programmability, we feel fully prepared for taking the Indian and global network technology space to the next level.
From a business perspective, we are likely to see 25x growth in data usage, and hence the growth in AI, AR/VR, IoT, etc., during the next decade. This means multi-fold growth for the Indian GDP and for our business as well.
V&D: Is “Make in India” really happening in the communication sector or are there some missing links that we still need to plug in? What are your recommendations to strengthen India’s hardware manufacturing ecosystem?
Dr. Anand Agarwal: We are leading the “Make in India” charter for the communications sector, especially in the semiconductor grade optical communication space. We do over 95% of value additions as we build optical fibre cables, starting from silicon right here in India. But, we are not just manufacturing in India. We are doing this in a state-of-the-art Industry 4.0 global facility and with the world’s only integrated zero waste to landfill optical manufacturing facility. We are proud of this sustainable, world-leading plant.
However, for India to be a real leader in communication manufacturing, a lot of things have to go into overdrive. While the basic framework for policy based encouragement is in place, there is a need to accelerate the process for setting up facilities. Taxation and tariff regimes should be relaxed, ease of doing business needs to be enhanced, and there is a need to increase local talent in the space of high-tech technologies. We have already done it once for IT services, and hence, India is the destination of choice for IT. Our government and policy-makers should show that level of encouragement and investment for the communications manufacturing sector, and the country is capable of showing global leadership.
V&D: More than 70% of towers in India are still not fiberized and it is believed that the country can leapfrog directly to the latest edge networks. How is STL gearing up to meet this requirement?
Dr. Anand Agarwal: Yes. India can leapfrog, and it must. The slow movement of 3G and 4G technologies and the poor penetration of Internet and fibered towers have kept India a laggard in the world of networks. Thankfully, we can repair that position now. We can use the lower tower fiberization as a blessing and do the fiberization with the latest high-capacity, bend handling fibers that have much longer life-spans. We can make each tower an edge-data center. We can make the whole network software defined with virtualized network functions right away.
Effectively, India can make the best futuristic network while the others are still busy utilizing their ‘legacy’ capital expenditure. STL has been gearing up for building this futuristic, high-capacity, agile and affordable network. We are geared up to make India leapfrog.
V&D: Being the second-largest telecom market, can Indian players create their own ‘designs’ and IP to recover what they have already lost to countries like China in hardware and the US in chipsets, particularly in upcoming 5G and mobile edge computing space?
Dr. Anand Agarwal: This is a new world: a world of open-source ecosystem collaboration. We get access to much of the world’s good work and can build over it. So yes, we can catch up and move ahead of countries like China. We can also find the right balance between contributing to the technology ecosystem and building proprietary technologies that we can monetize.
We believe that the real opportunity to make a difference and capture the market is in access solutions for data networks with Edge data centers. India and STL have the capability to build the hardware, software and connectivity equipment to execute this best in a most affordable manner for the country and the rest of the world.
V&D: STL, under your leadership filed had 271 patents during 2019, the highest-ever in the company’s history in a single year. How did you achieve this and what are some of the major achievements?
Dr. Anand Agarwal: At STL, technology is our middle name, and innovation is at the heart of everything we do. We have encouraged our engineers to solve complex problems that are posed to us by our customers and sometimes by
the limitations of current technology. We celebrate effort and all successes, even partial ones. Thus, there is an environment of innovation and invention. Our teams have a healthy competition to come up with new proprietary solutions and they use our four fully-developed labs to experiment on glass, fibre, cabling solutions, network design, and software virtualization. We now have over 300 patents. And, this is just the beginning.
V&D: What are some of the fundamental changes you would suggest for making the telecom sector in India robust and sustainable?
Dr. Anand Agarwal: The Indian telecom has been one of the world’s most dynamic telecom sectors. In a difficult and diverse country where affordability was always a challenge, this sector has created the world’s second-largest connected populations with the lowest data rates and one of the highest per phone data usage. This is remarkable.
However, the industry is right now going through a phase of consolidation and financial pressures. There is no doubt that this industry is paving the path for the country’s growth, both fiscally and socially. Hence, it’s our prerogative to establish a few fundamental changes to strengthen this industry so that it can help the economy and society in India become more robust in the near future.
It is important to understand that digital is different from telecom. This realization must be clear to everyone in the ecosystem. While telecom had only application—voice communication—digital is going to have a multitude of applications and services, ranging from entertainment to enterprise productivity applications to change the way all of us live and work. In telecom, the only investment that the telcos had was in leasing the airwaves and transmitting on them. In digital, the service providers would need to build a next-generation platform with capabilities of hosting, processing power and a tremendous amount of storage. In the digital ecosystem, the government cannot be only a revenue collector; it has to invest in the infrastructure as well.
The second point that I want to highlight is that both private and public sectors need to contribute and invest. The role of the private and public sector in the digital ecosystem must be made clear. The private sector must take responsibility for platform development, investment in new technologies like AI, AR, ML to increase productivity, development, and distribution of content, local development of network software and hardware as well as customer marketing and service.
The public sector must invest in the core infrastructure of creating the data highways across the country, in a similar manner that it invests in roads, railways and power infrastructure in the country. This data highway can be leased by private enterprise, which will include the large service providers, as well as local providers and entrepreneurs who can provide localized services on this infrastructure. 5G technology is extremely conducive to private local networks with multiple applications hosted and sliced on the same network.
Thirdly, the urgent investment is the need of the day. India will miss the bus to be a technology- and efficiency-focused nation unless the government shows urgency in this investment. This investment should be a part of budgetary outlays, like in multiple countries around the world. The infrastructure built and leased by the government will also reduce the financial pressures on the incumbent service providers who have not been able to invest much in the digital ecosystem over the last several years. This realization and necessary actions towards it is extremely important and urgent.