Alcatel-Lucent may dilute stake in R&D venture with C-DOT

Thomas K Thomas New Delhi | Updated on March 23, 2013 Published on March 22, 2013

Munish Seth, President and MD, Alcatel-Lucent–India

Will also end joint venture with RCom

Telecom equipment maker Alcatel-Lucent will dilute its stake in the joint venture with Government-owned C-DOT as part of its strategy to streamline its Indian operations.

The R&D centre, based in Chennai, was set up in 2005 to develop solutions for WiMax technology. Alcatel-Lucent owns 51 per cent stake in the R&D centre and C-DOT owns the balance.

Speaking to Business Line, Munish Seth, President and Managing Director, Alcatel-Lucent –India, said, “We want to reduce our stake in the venture to a minority status so that the centre can chase key areas like security. Instead of going to foreign entities to certify products, the Government can do this under the C-DOT Alcatel Lucent Research Centre (CARC)”

Low-cost equipment

The initial plan was to develop low-cost consumer premise equipment for WiMax technology for offering broadband services. But over the past few years the ecosystem has moved towards Long Term Evolution (LTE) technology making the R&D centre rethink its plans.

According to Seth, CARC is also looking at products for green initiatives and rural broadband to leverage the centre’s capabilities.

Alcatel-Lucent is also ending its joint venture with Reliance Communications set up to jointly go for managed services deals in the telecom space. However, the venture has not had too many successes.

“The joint venture with RCom will expire in May-June this year and after that we will not renew it. Alcatel has been able to build its trust with the operator and, therefore, will go for direct managed services deals,” Seth said.

RCom has recently given a $1-billion deal to Alcatel-Lucent for running its mobile networks.

Alcatel had recently exited another venture with Bharti Airtel for managing fixed line networks.

According to Seth, Alcatel got out of the venture because it wanted to focus on supplying technology than trenching for laying optical fibre cables.

“Alcatel-Lucent does not see itself spending man hours for trenching. Our strength is technology. Whether we are a joint venture partner or not, we continue to partner with Airtel on technology,” he said.

Alcatel competes with market leaders Nokia Siemens, Ericsson and Huawei for telecom equipment deals in a flat market.

Most of the large telecom players are going slow on their investments given the regulatory uncertainties. But even when the market was booming, Alcatel found it tough to get mega contracts. It did not win any 3G equipment deals and has not been able to get any of the 4G deals yet.

But off late it has bagged a couple of network deals from Telenor and RCom. It is also in talks with Reliance Industries for 4G services.

Selective in chasing deals

Seth said the company has been selective in chasing deals. “We have got RCom and Telenor deals recently and we are doing trials with Reliance Industries for their 4G services. We are very clear that we will chase only those deals, which makes business sense,” said Seth.

The company will soon announce a cloud-based strategy aimed at improving network efficiency in handling more data. “When we talk to telecom operators, we are no longer talking cost-plus model. We are talking about improving customer experience and that’s what new contracts are about,” Seth said.


Published on March 22, 2013
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