Gary Smith: CEO, Ciena

The roll-out of 3G services and the upcoming launch of Broadband Wireless Access (BWA) services are fuelling demand for extra transport capacity from India's operators.

Now, though, the requirements of the operators are different, as they need to consider the management of video streams and IP packets as well as traditional voice and data traffic and, to keep their operating costs in check, are seeking more sophisticated network and service management tools. (See The Shift From SDH.)

These requirements are fuelling demand for the latest technology developments from transport equipment system vendors such as Ciena Corp.. The company has proven expertise in optical, Carrier Ethernet and network automation capabilities and has telecom operator customers all over the world.

For Ciena, India is one of the biggest potential growth markets and the company is planning strategic investments for continuous growth in this market, where it competes closely with the likes of Alcatel-Lucent, Huawei Technologies Co. Ltd., Nokia Siemens Networks and Tejas Networks India Ltd.

In a recent interaction with Light Reading India, Ciena's CEO Gary Smith talked about the growth prospects, challenges and the vendor's focus for the India market.

Here are the key excerpts from the interview:

On India as a market
India is the key growth market for us. We have around 500 people in Gurgaon, including our Research & Development team, and expanding. So far, it has been a very productive engagement. It's certainly a market to be in. There are some challenges from the regulatory point of view but overall, the market is exciting. If you analyze the market and think about 3G, mobile data hasn't really happened here yet. So that growth is still due. (See Finding the Right Optical Options.)

Also, on 3G, there are a number of dynamics that need to come together and I think, the main driver for growth in terms of subscribers will be virtualization. Considering the exceedingly high mobile penetration of some of the advanced countries where people even have secondary computing devices like the iPad, the growth in India has just begun. We need to remind ourselves that its still in early stages and has a lot of potential to grow. Going forward, the focus will be on putting a lot of intelligence on the networks.

We are increasing our presence here. We have got around 350 development engineers in India who helped us launch the next generation of integrated management network. It is a platform for a lot of virtualisation and applications to come out, which is a focus area for many service providers. (See Ciena Opens in Mumbai.)

There are largely three things that we have identified for the long-term strategic play. First is clearly to support the Indian domestic market with customized offerings, that is, making a strong presence in the local market, strategically. Second is identifying qualified talent. We always wanted to have our direct presence and capability in India. We are pleased with the productivity in India. We have got three of the major carriers in India as our customers. We do have local partner support here in India but we can't name them.

On network intelligence
A lot of thinking has been going towards modernizing the networks. What most of the operators are looking for today is to make these networks more intelligent, especially as they move towards 3G and LTE from 2G. The major carriers are trying to move towards a single, converged network which is multi-serviced, largely because of changing dynamics and an unpredictable future.

If I recall, a couple of years ago, the network was considered as just dumb pipes, which I never really subscribed to. Network is such an integral part of application experience. If you can get the right capacity at the right time, at the right latency, with right characteristics, it can bring a great experience for your customers.

The growing realization is that it is all about network again. It is causing people to think about how to build the network, how to migrate the network, how to put the right kind of intelligence in the network, and to be able to scale rather than just ensuring the capacity.

Challenges In India
If you look at the issues, the country is facing a lot of infrastructure challenges such as multiple fiber cuts. Other challenges [include] finding the most economical way to scale the network. A very specific issue in the Indian market is over-supply. (See India's Backhaul Challenge.)

While the market opportunity here is certainly big, the existing number of 15 operators is way too many. Hence, consolidation is going to be the key. The market needs to balance it, sooner or later.

Also, much has been said about the declining service quality, but the question comes -- are you as a subscriber ready to pay more for better service quality? So, its important for a market to define itself and set priorities. There are also issues around metros, such as wireless backhaul, that need to be addressed.

Focus areas in 2012
While we are committed to meet the growing needs of carriers, 25 percent of our business also comes from enterprises, defense, research and education. Going forward, these areas will also be of key importance in our strategy.

In fact, if you look at some of the large enterprises, they are looking for carrier-class equipment since some of the enterprises are like small carriers. Just look at the growing amount of traffic in their transport and data centers and you'll realise the kind of demand they would have. Virtualisation is of critical importance, specially for small and medium enterprises (SME), since they don't have their own data centers and network IT support. However, everyone is still learning...

New markets and rollouts
In terms of markets, we believe that the Middle East, Russia, Brazil and India are amongst the fastest growing countries. We witnessed a growth of over 10 percent last year, which we believe is a great thing. We consciously decided not to engage in China because of certain reasons, and we will continue to follow that vision.

We are deploying 40 Gbit/s right now, which is the largest deployment in the country. We have also got a number of operators for 100 Gbit/s lined up. That will happen soon, specially since India is running short of fiber and we try to get the best spectral efficiency. (See 100G Transport: Ready and Able.)

With the emergence of 100 Gbit/s interfaces, there will be lesser boxes, more intelligence, spectral efficiency, and increased reliability. You get the right foundation, trying to simplify the network.

-Jatinder Singh, Principal Correspondent, Light Reading India