Indian telecom expansion opening doors for Canadian companies

The uncharted waters of India’s wireless market present a significant opportunity for Canadian telcos, the head of the non-profit Wavefront Wireless Commercialization Centre says. James Maynard, Wavefront’s president and CEO, told The Wire Report that there are more than half a billion people with cellphones in India, and the country’s carriers are adding between nine million and 10 million activations per month. “That’s the equivalent of Rogers’ every single month,” he said in reference to Canada’s largest postpaid wireless carrier, Rogers Communications Inc. A Vancouver-based not-for-profit organization that provides resources and networking opportunities for Canadian startups, Wavefront helps Canadian companies understand the technical and regulatory requirements in India and where they can fit into those requirements to enter the market. Maynard said smartphones make up 10 per cent of India’s wireless marketplace, which puts out nearly a million devices per month. “If you think about the infrastructure that’s required to take that kind of growth, it’s just opportunities,” he said. He said India is now moving towards 3G technologies—a transition Canada made approximately five years ago. “We can take what’s been successful here and we can export it into these markets through partnerships to gain incremental revenues from some of our existing innovations,” Maynard said. The Indian government announced in an October telecom policy that it is looking to increase broadband connections in the country to 175 million homes and businesses by 2017, and to 600 million by 2020. According to a press release from the Information Bureau for the Government of India, the improved policy also aims to revise the existing broadband download speed of 256 kilobits per second (Kbps) to 512 kbps by 2011 and to 2 megabits per second (Mbps) by 2015. The government added that it would seek to reach “higher speeds of at least 100 mbps thereafter.” In efforts to improve the country’s wireless infrastructure, the policy also aims “to ensure the availability of sufficient microwave spectrum to meet current and future demand for wireless backhaul especially in prime bands below 12 GHz, in addition to higher spectrum bands,” the release said. The Indian government added that unlicensed spectrum would be made available for the proliferation of wireless broadband services. “ is one of the major infrastructure players in the world,” Maynard reflected. “I’m not sure that even China is investing as aggressively.” Montreal company DataWind is capitalizing on India’s Internet growth with its Android-enabled Aakash tablet. The company introduced the device at the 2011 CES International in Las Vegas, the world’s largest technology tradeshow. Shortly after the conference, Suneet Singh Tuli, DataWind’s president and CEO, discovered an Indian government tender requesting a bid for 100,000 tablets for Indian students. Singh Tuli said in an interview that DataWind pursued the tender “very aggressively” and was awarded the contract later that year. That contract calls for the first 10,000 tablets to be sold as a part of a field trial through a government-subsidy program for students, which will see the Indian government purchasing each Aakash tablet from DataWind for $50 and selling them to Indian students for about 1,783 ruppees (about $35). The tablet officially launched in India on Oct. 1, 2011, generating interest from end users and garnering corporate attention from Indian companies interested in DataWind’s other products. “The result has been overwhelming,” Singh Tuli said. “It’s been tremendous in many respects.” He said the contract calls for total sales of up to 10 million units. “We are forecasting that we should be able to place probably about five million units in the Indian market over the next 12 months, which is very significant for us in many respects, generating a quarter of a billion dollars in revenue in one year,” he said. “It’s a big deal.” Since the launch of the government program in India, governments in Thailand, Turkey, Sri Lanka, Egypt and a number of Latin American countries have approached DataWind about the low-cost tablets. “It was the announcement that inspired people to think of what’s possible if computer and Internet access are in the same price range as the cost of a mobile phone,” Singh Tuli said. By Jan. 3, The Times of India reported that approximately 1.4 million units of the tablet had been ordered across the country in two weeks since the Aakash was made available online to the general public at a cost of roughly $49. To cater to high demand for the tablet, DataWind said that it would open three new factories in the Indian regions of Cochin, Noida and Hyderabad. Singh Tuli told The Times of India that the company plans to supply 70,000 to 75,000 units per day once the factories are in place by April of 2012. Singh Tuli and Maynard said the Indian government is moving “very rapidly” towards e-government, e-health and e-education, which also provides opportunities for Canadian firms. “That creates a whole new set of solutions that Canadian software companies can start building for,” Maynard said. He said the country’s increasing use of smartphones and tablets will open opportunities for content manufacturers and distributors, such as those that build and sell mobile applications for those devices. He noted that the country’s middle class is English-speaking and is larger than the population of North America, which gives way to a large potential consumer base for Canadian app makers. India’s current broadband service speed is just under 4 Mbps, which Maynard said is “acceptable on a global standard.” He added that the initial implementations of HSPA+ networks in Canada have only achieved speeds of about 7 Mbps within the last six months. Establishing a national broadband network in India is a complicated process often involving 10 to 20 different agencies for each route, a mid-November article in Bloomberg Businessweek magazine said. Reliance Communications Ltd., a broadband and telecom company based in Navi Mumbai, has laid 65,000 kilometers of fibre in the last two years, Maynard said. “So that says if you have a strong partner that understands the process, with the right focus you can get things done ... But it has to be in the context of partnerships,” he said. “You have to find good local partners that are used to dealing with the complexities of the Indian marketplace … It’s very difficult for even large non-India companies to penetrate into that marketplace ,” he said. Vijendra Gairola, chief representative for India at Export Development Canada (EDC) said in an email that Canada has a long history of developing and commercializing innovative wireless technologies. He said that EDC has established relationships with key telecom and broadband firms in India and regularly facilitates introductions between those firms and various Canadian companies. In many cases, Gairola added, Indian buyers of goods and services from Canadian companies require buyer financing, which EDC also provides. “Through building relationships with Indian carriers EDC is better positioned to introduce Canadian SMEs, through our representative offices in market, to decision makers in these major operations,” Gairola wrote. “Increased access leads to increased sales opportunities.” dgrenier@thewirereport.ca

Indian telecom expansion opening doors for Canadian companies

News | January 9, 2012

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