AT&T, the largest telecommunications company in the world, plans to expand its footprint in India, thanks to increasing demand from its customers. The company plans to spend a billion dollars to spruce up its global network, especially in the Asia Pacific region.
Gopi Gopinath, the chief executive officer of AT&T Global Network Services in India, spoke to Katya Naidu on the growth of enterprise business in India and the effect of India moving to 4G technology. Edited excerpts.
What is the kind of expansion and increase in connectivity that you are looking at in India?
We are looking to increase the locations and nodes in India, as customers keep demanding. Our idea is to be where our customers are. Including this year’s planned investments of a billion dollars in sprucing up network outside the US, we have also invested $4 billion since 2006.
We have done node enhancements in Hyderabad, Mumbai and Bangalore. We continue to develop our cloud based managed hosting and infrastructure capabilities. We have 57 locations where we have our tele-presence rooms. The new capability that we are deploying around the world, is IPv6 (Internet Protocol version 6), both for global managed services and AT&T Virtual Private Network (VPN).
What is the growth opportunity for your services in India?
Last year, revenue from India grew over 30 per cent. We also introduced managed hosting and security, and three new cable systems were deployed in India. Many customers we serve in the US are growing very well in India. They demand the services we offer them in the US, in India too.
Indian companies are turning multinationals and increasing their presence outside India. Some of our biggest customers are in India, but they use our services in many countries across the world.
How is your managed services business doing?
Most of the world contracted in 2009, but our customers here did not contract. Even though there was a slowdown, they received more services from us last year than they had got in the earlier years. This growth will continue and accelerate in 2010.
Bandwidth requirement is growing over 20 per cent, while the cost of bandwidth is going down. As we buy more cable capacity, every cable comes with a cost much lower than previous cable. Therefore, our bandwidth keeps going up and once we have it, we have to make our process more competitive as well. This is a positive cycle.
What kind of growth and interest are you seeing at your data centre business? Many large companies tend to manage their own data centres. How do you fight that mindset?
There are economics of using data centres, as most companies say that their servers are used only 20 per cent. They maintain a capacity, used for one peak month of the year. Why do they need to do that? We tell our customers that they do not have to buy server capacity for peak usage and hold it waste for the rest of the months. We ask them to use our servers for their peak requirement.
We also have enormous back-up power at our data centres. A regular office building of a company, which manages its own data, does not have that much back-up power. Data services increase power requirements, and companies recognise that. Even if they want to control their servers, they would rather do it in a place where there is battery back-up, generator back-up, and millions of gallons of diesel that is stored for those generators.
Many Indian companies offer data centre services. How are your services different from others?
We normally place our data centres in the same building as our nodes. Once data is at one of our nodes, they are connected to all AT&T centres. We make it a point to design our nodes and data centres, so that they are together and that there is no requirement for additional access to connect to the data centres. It gives us a competitive advantage.
How does the emergence of wireless technology like 3G and WiMax affect your business? Some of the services you provide, like visual connectivity, can be offered by wireless technology and in the form of video calling etc.
Our solutions are very cost effective. Besides, AT&T itself can use wireless technology for last mile connectivity. For a customer who is outside the nodes which we have in India, or even three-four miles away from the eight nodes, we use other local service providers outside the nodes and we ourselves do not put in own fibre in the country, except at the nodes.
India’s power ministry is talking about installation of smart grids. Are you looking at it?
We have not looked at the opportunity specifically. I might look at the people who have deployed it in the US, and see if we can provide it here. We have not thought about it so far, but if we have done it there, we can do it anywhere in the world.
AT&T is working on a pilot application, where information of power meters will flow continuously to a central location. It can aid variable pricing possible for usage, based on the time of the day. For example, if you use more power from 3 pm to 7 pm, you would have to pay 25 per cent etc. People who don't have the flexibility of controlling their usage, will pay a higher charge. But there are people who have the flexibility, would use it when it is not highly charged, thereby control usage.
