NEW DELHI: Corning Inc. is one of the leading technology players in
harnessing the interplay between light and glass in telecommunications and in
realizing the potential of advanced materials in information display,
environmental products and other specialty material industries.
The company has recently moved into its new office in Gurgaon and has
significant presence in the country. It currently operates in three business
segments--Optical communications, Opthalmic and Environment Technologies.
Corning is one of the largest manufacturers of optical fiber and optical fiber
cable. The opening up of the telecommunications sector in India has opened up
new vistas for the company. Corning is providing optical solutions to a host of
NLDs, cellular operators and cable TV operators in the country. CNS met up with
Clark S Kinlin, president of Corning International Corp, to find out about the
company's foray's into the Indian telecommunications sector. Excerpts from the
interview…
What are the business areas of Corning?
Corning is a relatively old company by American standards--about 150 years.
We are focused on technological innovations. Our business interests can be
broken into two parts: telecom and advanced materials. Advanced materials would
comprise things like TFT LCD panels, wide panel display, opticals for
semiconductors, etc. Telecom is 60 per cent of our business, which is primarily
optical fiber and optical cables. We are the world's number one manufacturer of
fiber and cable. We also have a components business for devices like optical
amplification, optical switching capabilities, etc.
What are your business prospects in India?
India represents very interesting possibilities. We have been here since
1960s through two or three joint ventures. But it was not until the deregulation
took place that we could bolster our presence in telecom in the country. Now we
are a major supplier to people like Bharti, Reliance, and Tatas who are putting
some of the most advanced networks in the world.
Despite the slowdown across the world, our bet is that the Indian telecom market
would continue to grow at the rate of 15-20 per cent for the next few years. We
look at India as an opportunity in excess of $ 100 million.
What about your other product categories like optical switches, amplifiers…?
Our customers for these products are typically OEMs like the Nortels, Ciscos
and the Marconi. So our sales path in the country for these products would be
through them.
How has the global glut in bandwidth affected you as one of the leading
manufacturers of fiber optics ?
We have been hit hard particularly in Europe. India has emerged as a
significant telecom opportunity for us as it is an under-served market. We are
lucky that the market has emerged now. We are not here because of the slowdown.
We are here because the market is exploding.
Which are your priority markets?
We have to look at the Chinese and Indian market and to some extent the
market in Japan. These represent solid telecom markets where there is still
inflow of capital. One of the common things between the markets here and China
is that the teledensity is still very low and there is a huge demand for
landlines.
Aren't you at a disadvantage competing against local manufacturers?
What we sell here is superior technology at effective price points because
we can leverage the scale of production, which only a large volume player can.
Local manufacturers do not have that advantage of large-scale manufacturing.
How did you penetrate the China market?
It has been a difficult market, no doubt. But, like in India we have had a
presence in China also for a very long time. We have had a lot of technical
collaboration so we have been increasing our presence in the country gradually.
I know a lot of people are losing money in China but we are one of those
profitable companies in China. Besides, our ability to deliver high quality
products has proved to be an asset for us.
What kind of presence do you have in the government sector in India?
We haven't been able to participate in the government tendering process
since it requires partnerships with local companies. Our participation has been
restricted to bringing in technical expertise, which does not exist in the
country like very specialized fiber needs and other network needs. We would
typically export them through our partners here.
Any plans to ramp up your presence in the government sector?
No, because it requires local investments and we do not think that the
market in India justifies investment at this point of time. As the business
opportunity unfolds, we shall look at investing just as we have done in China.
Last summer we bought over the production facilities of Lucent Technologies in
China. We have no plans of investing in production facilities in the near future
but we assume that with the current growth rate, the business opportunities
would be significant for us here.
What is your presence here among the cable operators?
The cable operators market is a small but significant market for us. We only
sell to the MSOs who use fiber in the backbone but we are not present in the
local distribution space. However, there was a time in Europe and North America
where the cable operator market was much bigger than the telecom market during
1991-94 phase.
What are your business prospects in the current scenario considering that you
would typically have one-time buyers who are not likely to come back for more?
Actually, there is still a lot of requirements in emerging markets. Even
today despite the slowdown we see a growth of 50-60 percent per year in Internet
traffic year on year. Also, the other thing is that single fiber or single
channel networks are being upgraded to multiple channel networks to take
advantage of newer technologies.
What I would argue would is that there would still be pockets of demand in the
long haul. But when we get into cities, we haven't yet figured out the right
architecture for access rings. Besides, I only think there has been 40-50
percent penetration of networks. In fact, the Bells in US have been our customer
since the 1980s and we have been selling to them year in and year out. Operators
also need upgrades for network enhancements. In fact, most of our customers have
brought fiber for upgrades.
‘We are here because the market is exploding’
New Update