Device
India's device (handset, customer premises equipment) space seems to see some traction, but nothing on a global scale. Indian companies have not been able to capture the domestic market and MNCs still rule the roost. Some of the Indian equipment makers have tried coming up with 'me too' and 'low cost' devices ( i-Mate, XL Telecom, Karbonn, Ray, Maxx, Byond, Spice Mobile, etc) but most of them have not been able to capture the market due to lack of R&D or QA or branding/marketing or all of these.

Comparatively, China has large domestic device manufacturers that have much stronger hold on the domestic market. They spend close to 10% of their annual revenues on R&D, and employ on an average 30% of their total workforce in R&D. Chinese companies are aggressively spending on developing handsets that can support emerging technologies and are customizing these devices for telecom operators to support emerging technologies such as 3G and others (W-CDMA and TD-SCDMA). Some of them have also started working on the next gen technologies like LTE and 4G. Indian device manufacturers can take cues from Chinese makers and focus heavily on R&D, and branding efforts.

While on the other hand R&D captives of leading global device makers like Nokia, Ericsson, Samsung, Motorola etc, have used India as a hub for R&D focusing on user centric technologies and developing devices that can be used in the domestic market. Nokia's India R&D center is working on chipsets for high-end mobile devices and is focused on next generation packet-switched mobile technologies and communications solutions to enhance corporate productivity. Ericsson's R&D center in India is involved in developing mobile prepaid, convergent charging solutions, and mediation products. Similarly, captives are doing a lot of work from China as well. Nokia, for instance, is conducting R&D on a mobile infrastructure and to develop mobile applications based on 3G and IP multimedia subsystem (IMS) for both Chinese and global markets from their Chengdu center. Motorola's China R&D Institute (MCRDI) works on value added applications, 2G, 3G technologies, and 4G (including LTE and related migration solutions).

Indian IT services firms are at the forefront of this technology space with firms like Wipro, Satyam, Infosys, HCL, MindTree, Tech Mahindra, etc, are providing high-end R&D services to telecom companies. Indian IT companies have worked with global device makers on numerous upcoming products such as Nokia on RAC (radio access configuration) for managing elements of 3G networks, for development of latest set-top boxes for companies like Motorola and numerous other projects.

A couple of Indian device makers are trying hard to compete with the global brands and coming up with products that support emerging technologies. Micromax is one such Indian company that has come up with the cheapest 3G enabled device. It has a development center in Gurgaon that works on building customized mobile phones for the Indian market. To compete with the global biggies in the long-run and build sustainable products, Micromax has plans of setting up an R&D center in Shanghai with an investment of $10 mn by December 2009. With the establishment of a new development center in China, Micromax plans to reduce the development time of mobile phones. Initiatives like these from a few more device makers would result in Indian companies competing on the global stage.

Wireless Carrier Network
Globally, operators like BT, AT&T, NTT DOCOMO, China Telecom, Verizon, and France Telecom have invested in developing technologies or through technology tie-ups. Indian telecom operators like Airtel, RCOM, BSNL, Vodafone, Idea, Tata Teleservices do not have a major technology focus. Indian telecom operators don't seem to be building on any expertise in the emerging technologies, and this could affect them in the long-run, especially when it comes to next gen technologies. Instead outsourcing is a big theme in India. Airtel has outsourced management of both their wireline and wireless networks. On the other hand, in countries like Japan and China, telecom operator have focused on technologies and aggressively initiated R&D efforts. One of the Japan's leading telecom operator NTT DOCOMO is spending heavily on R&D of LTE and 4G technology. China's leading operator, China Telecom has made significant investments in R&D space for developing mobile technology, Internet services, and the company also focuses on end customer demands and experiences.

Enabling Software and Services
Carrier class solutions are software products implemented at the carrier/telecom operator centralized systems. These include operational support systems (OSS) to business support systems (BSS). India has witnessed a lot of innovation when it comes to OSS and BSS software applications. The number of homegrown companies have developed cutting-edge products in the OSS/BSS space that have captured market share globally. Subex Azure is one such company. It is globally recognized for its products and its clients including thrity-two of the world's fifty largest telecommunications service providers. Some of the other well known OSS/BSS solution providers from India include Suntec, Bharti Telesoft (now Comviva), Aricent, Elitecore, etc. Interestingly, Indian companies have been able to sell their products globally.

Content and Portal Services
India has seen tremendous growth in the mobile value added services (VAS) space in the last couple of years. A large number of Indian VAS companies have been able to come up with innovative services in the mobile VAS space. Traditionally, what started off from P2P SMS based (Bollywood and cricket) services has moved on to services like m-Search, video clips, m-Commerce, etc, and is going from strength-to-strength. Unlike most of other components in the value chain, homegrown Indian companies dominate the mobile VAS space. But again this is a 'software space'.

Mobile VAS can be split into three categories-information, entertainment, and m-commerce. Indian VAS companies have performed well across all these categories. They have innovated and at the same time have constantly introduced customer centric services. They have also gone global and acquired companies from around the world. Indian VAS companies like Mauj, OnMobile, Cellnext, Indiatimes, Rediff, etc, have been able to develop innovative services and solutions. IMImobile developed DaVinci service delivery platform which integrates and encompasses all messaging platforms, voice and video platforms, operational support system (OSS), business support system (BSS), gateways, and administration and application interfaces. It has also come up with Ad-Ring fully integrated mobile advertising platform in which multi-format ad campaigns can be created and delivered to consumers via SMS, MMS, voice, WAP portal, CRBT and video streaming.

OnMobile has developed VAS product and solutions ranging from contest management and aggregation, m-commerce solutions to voice portals, and voice SMSs. Other companies like Rediff developed search engines on mobile phones and other value added services. This helped them increase their customer base and switch about 25% of the Rediff users to use mobile phones for Internet usage.

Again this shows Indian companies proving their mettle in the software space, but not complete products such as mobile phones and equipments.

Conclusion
India has been able to drive innovation when it comes to developing 'software' products and technologies in the telecom space. But it has failed to develop complete products in the core (especially non-software technologies) in the telecom space. Now, with several years of experience in providing R&D services and gaining financial strength this is the right time for some of the large players in this field to start focusing on building a complete telecom product from India.

The telecom hardware equipment market is much bigger than the telecom software market. To stamp its authority in the global telecom market, India needs to build globally competitive companies across the telecom value chain.

Amit Goeland Gaurav Vasu
The authors are founder, and senior consultants, Knowledgefaber respectively
vadmail@cybermedia.co.in

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