With activity in the Indian telecom sector hotting up, IBM has decided to set up a specialised division catering exclusively to the domestic telecom market. Through this division, IBM is to provide integrated solutions and services to companies operating in this niche sector. Michael Hill, worldwide head, global telecommunications industry, IBM Corporation, spoke to Savio G Pinto on some of the aspects of this initiative.
Despite IBM being a global IT giant, why has it been so late in tapping the Indian telecom sector with its solutions?
We have been in the telecom space for quite a while now. Our first step when we forayed into this area globally was to build global solutions. At first we experimented with just 2 or 3 customers. Due to the success there, we have now decided to launch our offerings in the Indian market realising the potential this market holds for us. We feel that our solutions are equipped to handle the changes taking place in the telecom sector which is centred around bridging the gap between voice and data.
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What sort of business scenario do you foresee for IBM in the Indian telecom space?
We feel that the market is large enough to provide ample opportunities for the kind of solutions which we have to offer. It is a bit premature to forecast the level of business we will garner, but with the disinvestment and deregulation taking place, the market is throwing up tremendous opportunities. The competition in the industry is also creating the need for better and higher quality solutions which we are geared for.
What is the competition that IBM itself anticipates from its peers catering to this sector?
As of now, we believe that there is no player in the Indian market that can provide the entire suite of solutions which IBM can offer. The integrated solutions industry targetted specifically to the telecom sector is still evolving. We have taken a lead in working with companies to provide them with exactly these kind of solutions. While there may be players in specific categories, I am not aware of any player having the entire gamut of solutions which we provide.
What could be the possible pitfalls for players like you catering to the telecom sector?
The players in the telecom sector are being forced to roll out networks at a frenetic pace to keep abreast of the growing demand. We fear that players may not be looking at the bigger picture while expanding their networks to factor in the immediate requirements. The last thing we would want is an overbuild in the industry since the collapse of any player would directly impact us. Our fortunes are directly linked to the fortunes of the telecom companies.
What threats and challenges do you perceive in your foray here?
Looking at India specifically, a lot would depend on how successful the telecom companies will be in increasing their penetration in the market. We would also have to see how business models evolve since the earlier model of cross subsidisation will no longer be feasible. The way companies perform in this changing scenario is of key relevance to us.
This makes us all the more anxious to work with telecom service providers so that they are on track. If they succeed, then we do too.