Telecom Lead Asia: Chris Houghton, head of Ericsson, Region India, joined India office on June 3. In an interview with TelecomLead.com, Ericsson’s India head talks about India plans, strategies, etc. He says managed services is an important and growing opportunity in India.
What are Ericsson’s plans and strategies in India? Are you expecting better business from Indian operators though they are cost conscious?
India is strategic, both as a market and a global development and services hub. It’s also a focus for manufacturing.
In the near term, India’s telecom sector looks challenging. But we see this as a short dip in a productive future. We have been here 110 years and have seen such cyclical shifts. Our DNA factors in challenges.
Currently, we are addressing operator focus areas like their Opex, data monetization and customer retention. We also believe Wi-Fi is very important to offload data from 3G networks. Our multi-vendor, multi-technology Managed Services can partly address operator Opex needs. That with our advanced billing systems on prepaid and postpaid will ensure a tight control on Opex and create new innovative ways to monetize data.
Operators in India will eventually increase their capex spend on network infrastructure to sustain the growing consumption of data and voice. This may require operators to contemplate shifting their customers around in multiple bands of frequency due to spectrum availability constraints.
Data penetration is yet to happen and the opportunity is massive. Data has increased complexity, leading to new technology and support systems, cheaper devices and growing penetration will increase consumption, the voice market is still big. The India opportunity has just begun. Mobile Broadband usage will increase as the network penetration increases across the country.
Several equipment vendors are exiting their managed services deal. How Ericsson is managing the managed services deal?
Managed services business is an important and growing opportunity for Ericsson. We are a pioneer and a leader in services with more than 15 years of global experience in managing multivendor, multi-technology networks. Our focus on Managed Services is very strong. Recently we became the first vendor to reach a milestone of providing managed services to networks that serve 1 billion subscribers.
Managed services require a high level of expertise and understanding of all equipment including that of competition. We don’t see too many players investing in such expertise. Managed Services also requires understanding of scale and complexity which Ericsson is very good at. In India and across the world we are leaders in this space. The recently signed US$1 billion deal with Reliance Communications for managing their fixed and wireless networks is a unique and mega deal.
Operators are likely to go for integrated managed services with wireless and wire-line combined with select vendors that have the necessary experience and expertise. Ericsson is well positioned to capitalize on that opportunity. Not only do we have strong local experience but our Global NOC serving global customers helps build necessary skills amongst our Indian teams in advance. We had skilled professionals with experience in managing 3G networks in India well before Indian operators launched 3G services helping us address local needs quicker.
Today, we lead in India with around 10 ongoing managed services deals and provide services in 23 telecom circles in India. Our customers include Bharti Airtel, Aircel, Idea and Reliance Communications among others.
Ericsson did not do well in 4G space in India. What are the reasons?
In India, LTE is still at a very nascent stage and existing roll-outs are very small in comparison to 3G. We remain engaged with all operators on LTE and believe we will gain share here as well over time as LTE gains momentum.
Globally, we are a leader in LTE. Today, LTE networks worldwide currently cover 455 million people, of which 305 million people are covered by LTE networks delivered by Ericsson.
India’s 3G market is growing. What are your unique solutions to grab more market share?
3G is the technology of choice for mass mobile broadband in India due to a strong existing ecosystem and growing volume – constantly making it accessible and affordable over time. However, operators have two challenges to fully capitalize on it. First, is how to maximize spectrum use considering limited 5Mhz spectrum and just the price of more spectrum; and second, how to monetize data. Ericsson recognized these as big opportunities a few years back globally and invested in building a portfolio and proposition that is unparalleled today.
To address the spectrum, we are working with operators on Wi-Fi to offload data from 3G networks in a hotspot environment like a business district or an airport where usage is very high. Ericsson offers carrier grade Wi-Fi solution that integrates with the operators existing wireless and core networks offering a seamless experience to consumers and makes it simpler for operators to manage.
Using the features and flexibility of our advanced billing systems on prepaid and postpaid, we assist operators to monetize their heavily invested data networks. We have operator support solutions to increase revenues through a customer enriched experience via the service quality measurement and assurance techniques. Today, we are a market leader in these solutions in India.
Employee exodus and retention of talent is a concern for several vendors. What are your strategies?
Long term players like Ericsson need to factor in short term market glitches when it comes to investment and resources. We cannot lose high quality talent as the long term story for India remains strong.
Ericsson’s integrated engagement in India has grown in workforce over the last year unlike the industry. In fact, we added over 5000 more employees to our Indian workforce with the recent Reliance Communications deal.
Our value proposition to our employees is very strong. In fact our employee survey showcases that motivation and engagement are at an all-time high. Our employees recognize that Ericsson has a strong future in India compared to many other players, added to that we invest a lot in ensuring that our culture of high performance and motivation is in focus. Our employees also believe that Ericsson is adding value to India. Due to large employee base in India, our employees get ample opportunities for growth within India and globally.
A combination of right compensation and benefits along with local & international opportunities coupled with enormous learning culture, being part of a dynamic work environment, global ways of working, talent management programs are our cornerstones of good talent. Our employees tell us that “we are a great place to work”, based on our Employee Engagement survey. At a fundamental level, we believe that being open and honest helps in building trust amongst our employees.