India telecom infra space set for big investments: Ciena CEO Gary Smith

By Ibrahim Ahmad

Gary Smith, president & CEO of Ciena, a global supplier of next generation telecom and internet infrastructure technologies, talks about India market opportunities in an interview with Voice&Data. Some Excerpts:

Voice&Data: How has Ciena been doing in India?

Gary Smith : We have gone through a lot of evolution with the business models. The market has been evolving. One of the attractions has been the talent we could get here, and how to integrate that talent into a global company. We’ve gone through a learning curve, but we are in a pretty good place, though it took us a while. People talk about attrition statistics, ours is about 8%,  which is less than the global. The trick to that, particularly with engineering talent, is to basically give them innovative work and leading edge technology. Simple, basic things that make a big difference. We have a good balance. Lot of innovation comes out of the team. The virtue is that they enjoy the work, we get lower attrition.

Voice&Data:  What is your observation of the Indian market? Since your customers are both telcos and enterprises, and they are going through lots of innovations and disruptions...

Gary Smith : The dimension around everything is the content, which plays a part in the enterprise as well. I think if you look at the service provider market, you see big investments into the infrastructure space. From an Indian perspective, one is looking to drive the internet into the major areas with about 1.3 billion people, many of which are going to get internet for the first time. They will experience it on a mobile phone. In many ways it is leapfrogging compared to other industrialized countries, where most people’s experience of the internet was through computers and laptops. We see a lot of innovation now. I think India is an example of new tech being rolled out for the first time, state of the art networks where you’re delivering mobile internet experience for the first time for hundreds of millions of users. Unprecedented scale... Relative to other large technologies, although still dealing with 35% internet access, that can scale up to 50-60%, which can make it the largest internet base in the world... Frankly, you can absolutely see that coming over the next few years. India is a very dynamic and exciting market.

Voice&Data:  What are the challenges or points of concern that need be immediately addressed by the companies/govt/policy makers?

Gary Smith : We have been watching the market and it has been relatively slow in the last few years. Firstly, somebody has to pay for the large investment cycle. Secondly, you have to create an environment from a regulatory point of view where you have competition but not the bureaucracy issues around that, which get in the way. And, we will have to encourage investment. If you ask for my personal opinion, then broadly speaking, they’ve got it right. Environment is business friendly, people feel confident around investing, and modernization of the tax structure consolidates the whole tax space. So much change going on, difficult to track whether we are making progress. I think clearly, we are. We have been driving internet access towards more people.

Voice&Data:  What according to you are the key initiatives and activities which should be taken up for taking broadband and internet to a different level when it comes to quality of service?

Gary Smith : What characterizes the Indian market over other markets is not just the size and scale, it is the mobile broadband. Most people will experience internet over the phone, which makes it a unique market. It is a very different set of dynamics, looking to drive hundreds of millions of users. I think what people never appreciate around mobile connectivity, is that it is really terrestrial. It is only mobile until you hit a cell tower. It takes an enormous amount of infrastructure build up to deliver that mobile experience. Over the past few years, we have been doing lots of build out to facilitate this infrastructure with all the major carriers putting infra in place that can not only deliver the current services. We see 2G is still growing, and soon to come is 5G. Those are the dynamics in play.

Voice&Data:  When we talk of mobile broadband, what role does Ciena play at the backend? What are the kinds of things we will see there, as current services leave a lot to be desired?
Gary Smith :The good news is that the Infrastructure for mobile phones is the same as the infrastructure for terrestrial broadband, for connecting data centers, enterprise connectivity, especially considering all the content providers coming into the country. Essentially, the architecture is either connecting content to content or content to users. Just a simplified architecture, but on a very large scale. The good news is that the infra has been built out – state of the art, which can deliver all of these things, at very high speeds. But with more and more users moving into 4G, operators are not just increasing capacity in the backbone network including metro, long distance, and under-sea. Metro and long haul at 100 gig is common, currently employing 500.

The latest concept is bandwidth slicing and network slicing. The network can be sliced from top to bottom so that you optimize the network to do three broad things; this is what 5G promises. The first is enhancing capacity, second is being able to support hundreds and thousands of IoT connections, and third is for much quicker lower latency traffic. If you are doing all these things on the same network, the network needs to be somewhat re-designed, which we call as network slicing. Indian operators are very much down that path, they are working with vendors like us to get that fundamental infrastructure in place. The investment has been made as the operators get state-of-the-art technology now. In India, you can leapfrog it. One of the biggest enhancements is locating the contact close to the user. Lots of investments going into caching right now, and the amount spent on transmission is starting to rival what they spend on other segments. But one problem is that out of 400,000 plus base stations only about 100,000 are fibred, and that is not enough back haul capacity on fiber. Next battleground would be to make the switch from microwave to fiber.

Voice&Data:  What kind of technologies are you likely to see in that part of the back haul?

Gary Smith : Operators are spending lots on fibering into the stations. These days when we roll out, we go 10gig per base station, upgradable to multiple 10 gig. Fibre being laid close to the user and  data centers are being connected to the back haul. The need to get the capacity and the customer experience is increasing. For enterprises, its about predictable latency. Capacity is no good if they have unpredictable latency, think about your LAN which was unpredictable. They need to be predictable if they want to go to the cloud. An interesting report says, 75-80% of the Indian enterprise spends is on cloud services. If you don’t have predictable latency, it is not going to work. The more you move things to the cloud, the more you need to have better connectivity in the premises.

Voice&Data:  What are some of the trends you are seeing in networking technology?
Gary Smith : There are two important things. One, absolute capacity for the network. And the second is how you manage the network. Networks used to be static, but now the shift is enormous capacity. Capacity can be moved around according to demand. A lot of thinking is around the technology for that including vrtualization, using AI in analytics. Moving capacity around on demand can be automated. Resilience is also required. Network security is also a very hot subject in India.

Voice&Data:  Government and defense sector has also been where Ciena has been active in India. Can you share something about Ciena's action there?
Gary Smith : We were awarded Indian Defense NFS contract, and are rolling it out now. For the first time in India there is a common network for army,  navy,  air force,  and intelligence.  An expansion of that is going on as well, mainly in the defense sector. Along the government side there is the Bharat Net, where we have regional projects. The good news is that the government is also investing. They are not the fastest, government takes its own time. However, because of decentralization at state levels, at least some states move faster.

Voice&Data:  How are your technologies helping companies like Railtel ?
Gary Smith : I personally believe in fixed wireless broadband as a complimentary technology. Verizon is doing a wireless technology in developed nations like USA. We are closely involved with Railtel for the Google Railway Station project where we will provide backhaul capacity. Also with private operators looking to do fixed wireless broadband, flooding a town with wireless is much easier than running fiber. It will make a big difference. To carry all that you need backhaul capacity. Public Wi-Fi is another big area of growth. This will come from the three main operators including RJio and Airtel. You cannot serve this kind of population with the technology we have. According to some research, we have 30,000 Wi-Fi hotspots in the country but we need about 8 million in about few years’ time. It is required to offload data during peak hours in cities. Reliance Jio Fibre is targeting more affluent, multi-storied city like Mumbai. They have covered almost 8-10 million households, not fibred all the way up though. We backhaul some of that capacity. They are definitely investing money in that space.

Voice&Data:  Are you playing any role in various smart city projects across the country?

Gary Smith : The concept is great but the main issue is with the Public Private Partnership which is messy. We are working in some of them, but our focus is on Bharat Net which is our national interconnect project. Smart cities need to be connected, and this is what Bharat Net will solve.

Voice&Data:  Given all the current market dynamics and opportunities, how do you see Ciena's prospects in India?
Gary Smith : Given the dynamics, India is our fastest growing market. Our investments from a long time ago are showing  results now. We have No. 1 market share in India, when it comes to optical networking and switching. Connect network includes access packet transport, access, OTN switching, etc. India is a critically important market. Been here for long, built great relations with the carriers. Last 12 months, internet download speeds in India increased 9x times as prices went down. That puts backward pressure on our networks. Things have changed differently in India in these four areas: Access, metro, long distance and submarines. Access network has become multiple 10 gig, metro network multiple 200 gig, and for long distance network it is multiple 500 gig, going into terabits very soon. Submarine we still do 100 gig multiples.