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Nokia Networks bets big on India telcos' data-driven expansion: Sandeep Girotra, Nokia Networks' head of India region

Financial results announced by Indian telcos in the past few quarters confirm strong overall monetisation of data, Sandeep Girotra said.

, ET Bureau|
Updated: Nov 07, 2014, 02.23 PM IST
Finland’s data networking and telecom equipment company Nokia Networks cut 10 deals across the 2G, 3G and 4G platforms in India during the third quarter to September, propelling the local unit’s revenue to its highest growth in percentage terms over a year. Speaking to ET, Nokia Networks’ head of India region Sandeep Girotra said the company surpassed its nearest global rival in terms of revenues during the third quarter. The company will expand its bouquet of managed services in the country, he said, adding that Nokia Networks' global revenue growth in the six months to December is slated to top last year’s levels, in which the India unit will be a key business driver, amid surging data momentum and easing regulatory head winds. Edited excerpts:

Q: Nokia CEO Rajeev Suri recently said Korea and India drove the company’s revenue in Asia-Pacific region in the third quarter. How did the Indian arm fare during this period?

A: Nokia Networks India had a very good third quarter; revenue growth in percentage terms is the highest till date. I can’t share specifics but our Q3 revenues surpassed that of our nearest competitor in India.

Q: What drove the Q3 results?

A: Nokia Networks India signed as many as 10 deals in the third quarter, across its mobile broadband and global services business units. These include a blend of 2G/3G expansion contracts, new 4G network deals and several managed services contract renewals. We have also ramped up our managed services delivery capability to newer technologies, through fresh deals. At a macro level, operator data revenue saw a metric upsurge and regulatory uncertainty is starting to melt, which obviously contributed to the strong Q3 numbers.

Q: Can you elaborate on these new-generation managed services contracts?

A: These are, typically, contracts from telcos that are migrating from networks-oriented KPIs (key performance indicator) to services-oriented benchmarks. Such customers would be companies investing more in service operations centres instead of network operation centres. Which is why, we’ve had to expand our managed services capability by offering things such as predictive operations, as in foreseeing a network event with 90% plus accuracy, 48 hours prior to the event. This could be predicting call or data traffic congestion well in advance, and in turn, helping telco clients deal more effectively with network issues in advance, minimising chances of service disruptions.

Q: What is the outlook for the second half of the year, given the growing demand for data services?

A: Financial results announced by Indian telcos in the past few quarters confirm strong overall monetisation of data. There’s clearly a lot of momentum for data revenue and we expect the trend to continue. Accordingly, the Indian unit will be a key business driver for Nokia Networks, which is likely to report higher global revenue growth in the second half (July-December) than the earlier corresponding period.

Q: Will increased capex by Indian operators in response to growing data uptake coupled with reduced regulatory overhang once again make India a top growth market for Nokia Networks like it was some seven years ago?

A: India remains a key market for Nokia Networks, irrespective of operator capex. Our India staff strength at 11,000 is a very high employee base for Nokia Networks around the world. Our Chennai plant manufactures 2G, 3G and 4G gear and exports a significant chunk to the rest of world. Thirdly, our Bangalore R&D centre feeds into the company’s global R&D machine. Finally, the global delivery centres in Noida and Chennai provide services not only to customers in India but across six countries around the world and manage more than 200 million subscribers. We have had a good Q3 and continue to look at India as a very important market.

Q: India contributed 6% to the company’s global networks business revenue last year. Will the India unit exceed that in 2014?

A: It would be a forward looking statement to comment on anything around Q4 and India. But upcoming spectrum auctions, easing regulatory headwinds, the stress on local manufacturing and advent of mass broadband initiatives like Digital India are strong growth stimulants. These parameters can add colour to our Q4.

Q: Is there merit in the telecom regulator’s recent call for leveraging existing private sector access networks to lower the cost of boosting rural internet penetration over the upcoming national broadband network?

A: All I can say is that sharing such infrastructure would definitely reduce roll-out costs and increase broadband speeds.

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