ERICSSON: Infrastructure warrior

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Ericsson continued its winning streak in the FY 2005–06. The company emerged as a leader in the telecom infrastructure space with revenue of Rs 3,528 crore. This was a 43 percent jump from Rs 2,475 crore in FY 2003–04. Major portion of Ericsson's revenue came from mobile infrastructure business. Not only on the balance sheet, the company has grown from just 500 people across offices in India to 1,500 people under its direct payroll. With an average of 30 base stations daily, Ericsson is clearly stoking the fire of Indian telecom industry's growth.

The trendsetting network outsourcing deal with Bharti Tele-Ventures was implemented last year. This $400-million deal was for three years. However, with the introduction of new services like EDGE, the scope and value of this deal increased. Ericsson's networks span across 16 circles of Bharti's 23. With Sunil Mittal expressing his desire to add almost 10,000 base stations in the next year, the Ericsson-Bharti relationship would get stronger. Most of the coverage expansion would now take place in rural or remote areas for Bharti. This, coupled with capacity and quality enhancements in the existing locations, would certainly bring in good business for the company.

India Heads: Jan Campbell, president, Ericsson (India and Sri Lanka)
Area of Operation: Mobile infrastructure, mobile phones, enterprise solutions
Address: Ericsson India Private Limited Ericsson Forum, DLF Cyberciti, Sector 25 A, Gurgaon Haryana 122002
Tel: +91 124 5080808
Fax: +91 124 2565447
Website: www.ericsson.co.in


V&D estimates	CyberMedia Research

Highlights

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Implementation of the $400 million-deal for Dishnet's 10 circles

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Outbidded of the 11 million GSM tender of BSNL

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Rolls out on an average 30 base stations daily across India

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Decides to exit CDMA infrastructure business globally

Among the new contracts, Ericsson executed a 7-circle project for Dishnet. This project was in addition to what Ericsson had implemented in Tamil Nadu for the operator. The agreement was for around Rs 1,760 crore (spread over two years) to provide infrastructure and services for GSM/GPRS/EDGE, unified messaging system, MMS, and intelligent network.

Due to its association with all the Indian operators, Ericsson had big and small expansion projects in hand. They implemented a limited expansion for BSNL last year for around two million lines. However, they lost a 11 million-line, BSNL tender to Nokia-Nortel.

Earlier in 2005, Ericsson decided to quit the CDMA market and focus completely on the GSM front. This accounted for less activity by Ericsson for Reliance Infocomm or Tata Indicom. However, under the new plan, old customers would be serviced though no new contract may be signed.

On the wireline business, Ericsson continued with its supply to BSNL and MTNL. It also supplied switches to Reliance. On the broadband front, MTNL gave it almost Rs 65 crore business for its five-lakh lines in Mumbai and Delhi. The company was also a supplier to Bharti and Tata in this space.

In the enterprise space, it introduced few new products and continued with its old offerings. Ericsson's mobile wireless organizer (EMO) has been positioned as a strong contender in the 'Blackberry segment' of the market. The EMO would enable pushing the corporate e-mails directly to handsets from the enterprise server instead of getting downloaded on to the desktop and then getting synchronized. Ericsson is positioning this product as a true seamless mobility product and betting heavily in gaining the enterprise segment.

In FY 2005–06, much depends on the 44 million-line tender from BSNL and MTNL. With its Jaipur plant fully equipped, and already supplying end-to-end mobile equipment to meet the demands of a growing market, Ericsson has a first-mover advantage here.

"Our managed services experience with Bharti has been quite satisfying"

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