The importance of India to Ciena’s business cannot be understated. In our 3Q18 quarterly earnings announcement on August 30, 2018, CEO Gary Smith explained that India revenue grew 100% year-over-year and contributed greater than 10% of global company revenue in the quarter. This growth is a trend we have been seeing for some time.
Ciena has invested in the India market for more than 15 years now. We recently opened a new campus in Gurgaon (outside of New Delhi), have another location in Mumbai and currently employ close to 1,500 employees in the country.
Ryan Perera has been country head of India since 2010, helping to steer the company’s solutions into key customer accounts. Today, Ciena is present in all major networks in India, including service providers, regional providers, key government entities, utilities and global webscale businesses in the country.
We were able to catch Ryan for a moment to get his thoughts on the dynamics of the Indian market. Please find the Q&A below:
Willie Low: India is an extremely dynamic market. How does Ciena advise customers to best adapt to so much growth?
Ryan Perera: The Indian market is the fastest-growing internet market in the world. Within that dynamic, Indian service providers have experienced an 80% drop in the price of data over the past four years. And with the introduction of affordable smartphones into the country, people who’ve never had access to the internet before now have it.
At the same time, the Indian market has seen a 1,500% increase in data downloads over the past four years. On average, Indians consume 7GB of data per month per user. That number is set to grow to 15GB in another few years.
The combination of this extreme price drop and astronomical growth in data consumption puts intense pressure on service providers. From Ciena’s perspective, the concept of our Adaptive Network has resonated well with our Indian customers. They increasingly need automation and intelligence and programmable infrastructure to adapt their networks today, and they will need to adapt continuously into the future.
WL: The Digital India initiative was launched several years ago, setting out a vision to transform India into a digitally empowered society and a knowledge economy. How will Ciena capitalize on that initiative?
RP: Right now, there is only 27% broadband penetration in India; that’s a fairly low figure. But it points to opportunity for India. There are many studies that confirm the correlation between GDP growth and infrastructure growth in any nation. We are strong believers that communications infrastructure is pivotal to any nation’s critical infrastructure. Particularly in India, internet growth will be mobility-driven, and that means India’s networks will continue to experience high growth, hundreds of millions of new users and the need to adapt to massive change in the near-term.
For Ciena, that’s opportunity. India is Ciena’s fastest-growing market. We have a strong and diverse customer base in India, including all the major service providers, many government customers and more recently some regional carriers, too. In addition, we’ve had success with all of the webscale players in India and many subsea players, and all of these providers view India as a strategic market for the future. So do we. We’ve been strong with our optical products, we’ve recently won new packet network opportunities, and we continue to talk about the benefits of our Blue Planet platform with many of our customers. It’s a very exciting place to be at the moment.
WL: When you talk to customers in India, how do they describe their primary pain points?
RP: As we’ve discussed above, India will be a mobile-first economy. And more than 80% of internet traffic will be video, which will be generated, consumed and served at the edge of the network. And because the user experience must remain high, the network edge will become the new battleground of Indian telecom.
The network edge is more of a real estate issue than a technology issue; you need 100,000s of locations. This is where our Packet portfolio comes in. In India, 60-70% of operator Capex goes into the access segment of the network. To address this, customers need scale (high-density, small-footprint solutions); convergence (integrated optics and pluggables onto platforms); and a small set of routing capabilities (SDN-controlled routing environments). And they need automation and intelligence to orchestrate their networks.
To connect the network edge to the core, operators will need speeds of 200G and beyond – 100G just doesn’t serve them well enough anymore. Customers also want the power of a Layer 0 control plane to make best use of their existing resources.
In all these scenarios, Ciena’s Adaptive Network vision serves our customer base well. WaveLogic Ai, our Packet portfolio and our Blue Planet platform all offer excellent solutions for customers.
WL: How do you expect the rollout of 5G will proceed in India?
RP: All three Indian service providers are paying very close attention to the introduction and finalization of new 5G standards. In India, we continue to phase out 2G and 3G networks, with the goal to expand 4G and eventually introduce 5G.
As in other countries, we will continue to build out fiber to base stations. In India, the number of base stations is expected to expand dramatically from approximately 450,000 today to more than 850,000 by 2020 according to a recent Light Reading article – that’s a huge amount of investment to come. We’ll also be paying close attention to the finalization of the new eCPRI standard and the introduction of lower-cost technologies like Ethernet into the network at new points. The underlying backhaul and fronthaul transport networks will need to have the right level of scale and the proper cost structure. These parts of the network will be critical, and they are places where we continue to work closely with our customers as they plan to deliver massive growth with both scale and cost efficiency.
Thank you, Ryan, for sharing your views on this fast-moving and dynamic market. For those of you who’d like to speak with Ryan, please get in touch with Christine (ckeck@ciena.com) to schedule some time. Alternatively, Ryan will attend India Mobile Congress in New Delhi, October 25-27. We can also book a meeting around or at that event.
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