The Hindu Business Line : Nortel keen on tie-ups with more Indian cos

NORTEL is open to equity participation, joint ventures or alliances with Indian companies that can provide innovative communication solutions, according to Mr Bill Owens, its Vice-President and Chief Executive Officer.Nortel recently invested $10 million for an unspecified equity stake in Bangalore-based Sasken Communication Technologies.

Mr Owens, who was once vice-chairman of the Joint Chiefs of Staff, the second-ranking military officer in the United States, is on his first visit to India as CEO of Nortel Networks. During his stay here, Mr Owens has met Ministers, government officials and industry counterparts, such as Mr. S Ramadorai, head of Tata Consultancy Services.

Mr Owens said his company would like to see significant participation from India in the global outsourcing worth $6 billion annually that Nortel does. And, if there are more competitive neighbours who provide hardware outsourcing Mr Owens would welcome it, as he holds that hardware is becoming increasingly commoditised. "But innovative solutions are not. Software, when outsourced, is more likely to come to India," he said. According to him, Nortel would like to see significant solutions for use in other regions too, to come out of India.

Over the next three or five years, Mr Owens expects to see considerable consolidation in the industry. "And Nortel intends to play a part in this," he said.

Software communication solutions could be the key differentiator in winning contracts in the years to come.

And this perhaps explains Nortel's recent acquisition of PEC, a Washington-based e-governance company, for $450 million. "It is a very small company that does very high-end enterprise solutions," he said. The acquisition had raised a few eyebrows in the industry. But, according to Mr Owens, it just goes to show how consolidation in the industry can also mean inclusion of activities other than mere equipment manufacture, given the fast evolution of technology.

"We are trying to win in a market place that is very stiff," he said, with reference to competition in the telecommunications equipment industry in general, and from Chinese competitors in particular. But, as the Chinese players grow bigger and consolidation happens, the cost difference could even out, he says.

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Nortel keen on tie-ups with more Indian cos