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
spotlight 12/4/2012 | 9:56:21 PM
re: Nortel Breaks Into India GAIL has acquired Classic TN16x and rumours are that Reliance Infocom has bought major SDH equipment from Nortel.
papabear 12/4/2012 | 9:56:17 PM
re: Nortel Breaks Into India The Optera 4000 is a long haul product.

Nortel Networks OPTera Long Haul 4000 Optical Line Systems is the first open 10 Gbps backbone that breaks the 4000 km distance barrier without opto-electronic regeneration.

fiber_r_us 12/4/2012 | 9:56:17 PM
re: Nortel Breaks Into India Did I read this correctly: Nortel sold a *metro* 4000 product to link 16,000km of fiber between cities together? This is clearly a longh-haul network! Are they simply using a Metro system and OEOing at every city and intermediate site? Why didn't Nortel sell them a long-haul system?
fiber_r_us 12/4/2012 | 9:56:15 PM
re: Nortel Breaks Into India The article calls it "OPTera Metro 4000 Multiservice Platform", which does not sound like the LH4000. Is there such a beast?
papabear 12/4/2012 | 9:56:14 PM
re: Nortel Breaks Into India I think Nortel's marketing left out the LH product in their press release. I think it will be a combination of the 2 products. Their web site has info on using the 2 systems together with a simulated network map. Do a search on 4000.

Nortel Networks OPTera Long Haul 4000 Optical Line Systems is the first open 10 Gbps backbone that breaks the 4000 km distance barrier without opto-electronic regeneration.
fiber_r_us 12/4/2012 | 9:56:13 PM
re: Nortel Breaks Into India I am familiar with the LH 4000... and last I heard it was being canceled in favor of the LH 5000. So, did Nortel just dump a bunch of "distressed" LH4000 inventory on India? If so, sounds like they got ripped!
papabear 12/4/2012 | 9:56:13 PM
re: Nortel Breaks Into India Yes to both the question and the statement. It was probably better to sell to India at a low price than to write off inventory. Their stock couldn't stand another hit for large write offs.

Also, the PR is better if it looks like they are really selling something.
fiber_r_us 12/4/2012 | 9:56:07 PM
re: Nortel Breaks Into India So, maybe that explains the "metro" in the name in the press release. Nortel didn't want anyone to realise they were dumping old inventory on India.
ccbonnet 12/4/2012 | 9:55:57 PM
re: Nortel Breaks Into India
Just like Chinese, Indians are not naive when it comes to buying hi-tech gear. Granted, there may be corrupt gateways to get into the market, but in no way naive businesses taking a dump of canned inventory from Norty.

A Nortel sales person close to the deal would agree that most likely the equipment is being set up for "free" or for almost nothing. Nortel would get the money in servie contracts "as the provider realizes revenues".

Rumor was LH4000 is being canned...but who knows, this deal might turn it around.

Any idea on what is the equipment used for GAIL?
Sign In