Nortel Breaks Into India

India is one of the hottest markets in the world, but one of the hardest to crack. Is Nortel making headway?

August 14, 2002

2 Min Read
Nortel Breaks Into India

India is one of the largest untapped telecommunications markets in the world. But it is also one of the hardest markets to break into, say analysts.

Today, Nortel Networks Corp. (NYSE/Toronto: NT) announced that Bharti Telesonic, a wholly owned subsidiary of India's leading telecom conglomerate, Bharti Tele-Ventures, has deployed a high-capacity SDH backbone, based on Nortel's OPTera Metro 4000 Multiservice Platform (see Indian Telco Picks Nortel).

Bharti Telesonic is using the gear to build India's first privately built long-distance network. The network will use 35,000 kilometers of fiber optic cable and will ultimately link 250 cities. So far, the network spans 16,000 kilometers, connecting Chandigarh, New Delhi, Bhopal, Jabalpur, Mumbai, Mangalore, Bangalore, Chennai, Vijaywada, and Hyderabad.

“Anytime you win in India, it’s good,” says Steven D. Levy, an analyst with Lehman Brothers. “There is huge potential there.”

India has nearly a billion people and a large, well-educated middle class. Cell phone or fixed telephone line penetration is among the lowest in the world on a per capita basis, making this an ideal market for telecom equipment providers. Levy feels that India is as important an emerging market as China (see Subscriber Growth Slows in China, Surges in India). And the opportunity has been relatively untapped for about a decade, he adds.

Bureaucratic red tape and high tariffs on finished goods have kept many vendors out of the market. Most of these taxes have been instituted to keep high-tech jobs in India, but they have also discouraged foreign companies from selling products to Indian service providers.

And with bureaucracy has come a price of entry. Some vendors have reported that they have needed to pay an "agent fee" just to get their foot in the door at an Indian carrier. In other words, local officials have, on occasion, accepted bribes in order to make certain deals go through, say some sources.

This latest deal builds on an existing relationship between Nortel and Bharti Tele-Venture. Earlier this year Nortel deployed the OPTera Metro 4000 systems for Bharti Telenet's fixed-line TouchTel networks in Haryana and New Delhi (see Nortel Wins in India). In late 2001, Bharti group's AirTel selected Nortel to supply a nationwide customer care contact center for its GSM wireless cellular service.

Nortel has managed to win other Indian accounts as well. The Gas Authority of India (GAIL), a state-owned entity, has deployed Nortel's DWDM and SDH technology for the first phase of its nationwide optical backbone network, as well.

Details about this latest deal are scarce. The company did not mention a price tag or the duration of the contract.

“The real question is whether Nortel is finally making some headway there.” says Levy. “I don’t know the answer to that. If they are, that’s significant.”

— Marguerite Reardon, Senior Editor, Light Reading

Subscribe and receive the latest news from the industry.
Join 62,000+ members. Yes it's completely free.

You May Also Like