India's Tejas Targets Big Gains in US

Tejas Networks, one of the few Indian players in the optical equipment market, is planning a major international expansion, including a push into the US market, its CEO tells Light Reading.

"We are recording 70% year-on-year growth in [revenues in] the international [direct] markets," says Sanjay Nayak. "Our focus has been South-East Asia and the African market. We are looking at similar growth over the next few years as well. Beside these geographies we will be focusing on the US market as well."

In the international direct market, where it sells straight to end customers, Tejas made about 1.46 billion Indian rupees ($21 million) in revenues during the year to March 2019, generating another INR626 million ($9.1 million) from international OEM (original equipment maker) sales channels. In the next two or three years, Nayak anticipates that nearly 50% of his company's revenues will come from international markets, up from just 21% today.

Tejas made INR9.37 billion ($140 million) in total sales last fiscal year, representing a 17.8% increase on the previous year's figure. Net profit was up 38% over the same period, to INR1.47 billion ($21 million).

One key reason for the international focus is the recent geopolitical clash involving Chinese vendors such as Huawei -- a major player in optical networks.

"There is a realization among the service providers that they need to reduce their reliance on Chinese gear and also that they need to ensure supply chain diversity," says Nayak. "They [potential clients] are basically looking at three things: technology; cost competitiveness and a well-established company. In this scenario, we come with a compelling proposition. We offer an end-to-end product portfolio and our products have been deployed across the world. Secondly, Tejas has been around for a long time and we come with strong balance sheet with zero debt."

The company is to focus on Tier 2 and Tier 3 telcos in the US and will boost its presence and headcount there, hiring across various departments. Today, it has just ten US employees.

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In India, Tejas hopes to reduce its focus on the government segment. "We will be focusing on the private sector, including enterprises in the domestic market," says Nayak.

While the geopolitical situation around Huawei could bode well for Tejas generally, the same might not be true in India. "In India, there are undercurrents and the industry is waiting for the government to decide whether the Chinese vendors will be included in the forthcoming 5G trials or not," says Nayak.

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There is a view in India that telcos cannot totally ditch the Chinese vendors because they have grown to rely on its competitively priced equipment to offer such low tariffs to their own customers. But Nayak disagrees. "This is not true," he says. "India can build cost-effective networks without using Chinese gear, as Tejas is anyway competing with them on price."

Based in Bengaluru, Tejas started operations in 2000 and is today one of the few Indian companies that makes telecom equipment. It competes against Ciena, Nokia and Huawei, among others.

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— Gagandeep Kaur, contributing editor, special to Light Reading

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