We have come to the table with more aggressive payment terms

Alvarion is planning to expand its operations in India. It will invest in
increasing its manpower. It wants to work with more operators for offering BWA
equipments. Eran Gorev, president and CEO, Alvarion was in India during the BWA
auctions. He says Alvarion will work with BWA players by offering innovative
business models. Excerpts

What are your plans and expectations?

Broadband has significant potential for growth, and wirless broadband is the
most cost-effective means of providing a broadband service. We think the
opportunity, both for operators as well as vendors, is quite significant. The 3G
auction is somewhat dramatic, which in turn perhaps represents a trigger
opportunity for the BWA spectrum itself because operators will need this
additional spectrum to provide good quality of services nationwide. We look
forward to our fair share of this pie. We are ramping up our presence in India,
hiring people, strengthening and introducing skill-sets and capabilities and
working on our relationships with prospective operators. We will leverage our
presence in the Indian market with the fixed wireless deployments networks, that
we have had here for a number of years.

Can you share exact details of the expansion plans?

We will continue to hire and keep a check on the final results of the
auctions and the contracts. We will make final decisions on how far do we need
to progress.

What are the new deals in the pipeline?

On the private sector front, it remains to be seen who will end up with
spectrum in which circle, so operators too have not made any decisions yet. They
too are waiting to see themselves; so we are all waiting to see the final
decisions there. Finally, on the public sector front, there are a number of
initiatives, and we hope that contracts will be finalized in the near term and
we will then proceed with providing technology for deployment.

What is happening on the BSNL deal?

We are a part of three consortiums that are in discussions with BSNL to
finalize their agreements. Once this is finalized, then hopefully in the very
near future, they will proceed in having the numbers deployed, then we will be
providing the actual network.

How big is the WiMax opportunity?

If we look across the public sector and the private sector, it has thousands
of base stations. Ultimately, our decision will be based on the speed of rollout
and the coverage. Again, it depends on the circles they end up winning and then
the intensity of population, the speed of deployment will fall again in many
thousands of base stations. So it will be anywhere from 20,000 to 30,000. It
will go up depending upon how far they want to grow.

Will BWA get an edge over 3G deployments?

3G spectrum itself in India will be made available several months after the
BWA spectrum is made available because in the BWA area, there are no limitations
in making the spectrum available. On the BWA side, those who end up with
spectrum will move very quickly to deploy the networks because they will also
network as soon as they deploy. Whereas, on the 3G front, before September the
spectrum itself won't be available (it is a matter of few months). But I think
the Indian market has a sincere desire and need for broadband, so I believe
those that will be able to launch networks quickly have all the reasons in the
world to do that, so we expect that as soon as contracts are signed and bank
guarantees are paid, this will move on very quickly.

What are the innovative business models?

We have evolved over the past several years in terms of our go-to-market
strategy, but years back we were purely a product vendor. In places where we
would be chosen we would provide a product and typically someone else would
deliver services around the network and source components provided by Alvarion.

We have developed very significant service capabilities, deployment,
integration, engineering network design, network support and so on. We are in a
position to offer and manage services today. We have fortunately or
unfortunately come to the table with more aggressive payment terms relative to
where we were three to five years ago. This is a market reality, so extended
payment terms or financing capabilities (that today we can offer) some people
call it innovative models, I think it is something we have to live with, but it
does not necessarily make me happy. We have been delivering networks and having
done a good job for many customers including here in India, where we deployed
our end-to-end product 16D networks and we have enterprise customers,
municipalities and utilities utilizing our networks.

How was the last year's performance, especially during the slowdown?

There was a period of global economic crisis and credit crunch. Most people
were trying to scale back investments; most people on the career side were
looking not to spend, not to invest but rather cut their operating expenses and
capital expenses so vendors like us and technology providers suffered as a
result of revenue decline. The business models of some new entrants were
contingent or product independent to financing, and they were talking to
Alvarion in mid 2008. In Q3-Q4, all of a sudden those financing trends that were
put on the back burner came to a halt because of this situation. So they put
their investment plans and their deployment plans on hold again. The industry
including Alvarion was impacted by that.

Since, the beginning of 2010 we are seeing an increased level of traction,
activities, investments, credit, financing, by banks, venture capital and
private equity. It is not yet back to the levels of pre-economic credit crisis,
but it has improved relatively by late 2008 and into 2009. These cycles
typically take time, taking several months for people to raise funds and start
with their deployment plans. Overall we are seeing a certain improvement; we are
not completely out of the woods yet. We are being conscious as a company, but we
made decisions to invest in specific areas.

Indian operators are looking for LTE. What are your views?

I think the wireless broadband space is interesting. In terms of Indian
consumers and Indian businesses having broadband access to data services,
applications and content, it will be a pity if all of us collectively wait for
LTE. As LTE is not commercially available today, we will end up waiting for the
spectrum-not just bidding but winning, and in the respective circles there won't
be (in the next three months) actual networks deployed. In the long term, LTE is
a viable market, it will happen and once the ecosystem is in place, then
certainly it will be a very viable technology as well.

Baburajan K

baburajank@cybermedia.co.in