Will the financial crunch affect 3G in India?

The financial meltdown in the global markets could have made the markets jittery and the USD 700 billion bailout package offered by the United States to get the markets’ belief back on track would take time to take shape. India, which is one of the main nerve centers for economic activities in not just South Asia but across the world, would feel the heat with 3G spectrum bid all set to take place soon.

Tim Jefferson, general manager for Spirent TestCenter in Spirent Communications spoke to Prasad Ramasubramanian of CyberMedia News on the prevailing scenario and the trends in the telecom markets. Excerpts from the interview:

Do you feel that there is a lot of speculation in the markets now with big financial houses going bankrupt and the cascading effect could come to European houses too? Would this be affecting the 3G bidding processes in India?

There was this discussion with our CEO about the shrinking capital base and the immediate impact that it would have on the amount of capital available for M&A, credit that would be available for the telecom companies and how the whole thing would be affecting the decision making as there is a lot of investment which would be happening in the infrastructure. It’s hard to say at this point of time about the impact. A lot of decisions for the year 2009 have already been kicked off but things can change very quickly and we must be aware of that. We are concerned about the projects in the second half of 2009.

What are the trends that you see in the WiMAX and 3G space with them being two different technologies to handle?

I am more responsible for the Converged Core Solutions group and would not be an expert to comment on this. We have a lot of debate internally on the LTE (Long Term Evolution) versus WiMAX and there are a lot of contradictory market research reports on how and where to focus your investments. From our perspective we are focusing on end-to-end solutions space and there is an opportunity to tap the customer base with that initiative.

How do you view India as a market and what are the challenges that your customer comes to you for?

The challenges that services providers have are the complexity of services they offer and there is a shift in the core customer demands. Investments by companies are being made heavily in data centers Ethernet, new technologies and protocols, optimizing the productivity of data centers--and the storage market is very hot as well. For us, it’s a nice way to scale our investments as well as opportunities in these markets and it’s interesting to see how product portfolio has changed.

Environment friendly practices are the need of the hour. How has Spirent taken to this task?

It’s been very interesting and we talked to some of our customers in Japan. They have very strict protocols, which require them to drop their power usage by a significant percentage, and they have to go to their data centers and see they can do that. The marketing of this green initiative has put a lot of pressure on companies.

We are a traffic generator and historically we have been providing details on how many packets per second and the green marketing has ensured that now we include the power consumption details too in the products that we offer. So that’s a significant change. Green initiative has ensured that customers want higher performance at lower cost and with lower footprints.

Do you think that 3G technologies took a tad late to enter the Indian markets?

You have to understand that companies had earlier spent a lot of money on these technologies and it never turned out to be beneficial and operators pooled in a lot of investments for services, which never evolved, and now they are struggling to find investments for 4G. Now, the only thing that has changed the scenario is the advent of iPhone, which has made a major impact in these markets.

It has shown that there is a solid revenue model that can be generated using the 3G. I think India would be benefiting from the products that would come along with 3G in terms of matured technologies.