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Home arrow News arrow India as second headquarters, globalization center
India as second headquarters, globalization center
Wednesday, 30 July 2008

India, an emerging market, has a great potential from young generation especially the engineering talent. The country's GDP has been growing at 8 percent for five years. All these things give an environment of growth for various sectors including the telecommunication sector.

Image"In a market where there are billions of users, you can try many business models and applications. So, India and China can be the most innovative countries from the business model perspective," says

 

On India becoming the hub of Cisco's service provider business

India has not just become a commercial hub for service providers but has emerged as the second headquarters and globalization center of the East for some obvious reasons:

  • India, is a growing economy right now and when we decided to create a globalization center we were focusing on speed and scale. We were looking for a place outside the US and Europe where the region could offer us the talents and the ability to do innovations. As for the scale, in my opinion India is an IT platform. I am not saying this because I am an Indian, but because India has a strong skill-base which no country can offer or match.

  • It has a very open judicial system. It is a democratic country where the economy is growing fast. It honors intellectual property rights.

All these combined, India gives Cisco a strong platform. Majority of the population in India is still young. There is a huge young talent coming out of the Indian universities. And there is a lot more interest in engineering and entrepreneurship. These are the important things we were looking for when we picked India as our second headquarter.

On growth of mobile users and service providers in developed and emerging markets

There are many countries that I have worked in, like Japan for example. All these countries are democratic in nature and very advanced. They also have good judicial systems. But why we chose India is because in those countries you don't find scale and skills. India, an emerging market, has a great potential from young generation especially the engineering talent. The country's GDP has been growing at 8 percent for five years. All these things give an environment of growth for various sectors including the telecommunication sector. As a host, we know that Japan, Europe, and the US are already developed and are not growing at all. The budding young talent has also stopped growing there. In fact, the population in developed countries is declining. So, the number of engineering students graduating from colleges is not comparable to what we have in India. In India's telecom market, we see major capital ventures coming in and new start-ups happening. India, as a country, is using new technologies and is developing different verticals such as healthcare, retail, and hospitality.

On network driving economies beyond the conventional roads, ports and airports

If you are running a large business, the most important thing in the business is information. Whatever type of information is exchanged between different units of an organization, the main aim is to make the business grow. Let's take the example of retail. It is booming in India. Now, if you want to start a retail business, information is vital. Information can drive progress. If you have the right information, it can drive your stocks in the retail at appropriate levels. And also the right information, like which products are running out and which all need to be supplied. If you have the detailed information about your consumers then you have the right marketing program such as which product will be on sale or how does the company deploy "buy one and get one free" deals. As a result, it improves your marketing capability. If you provide the right information to your consumers about the type of program you are offering or the quality of product they are purchasing, you win the customers' loyalty. The information is available anywhere anytime that changes how businesses are done. India needs that mainly to provide to the huge masses. We have to cover a billion villages and the technology is going to expedite how some of the industries will flourish whether it is the fishing, textile or retail sector.

And the innovation of the infrastructure is the basis that provides information to different areas of an industry.

A popular study indicates that if you add mobile phones to 10 percent of population in a current technology environment, the GDP of the nation grows 0.5 percent. People can leverage the telecommunication infrastructure growth as well as the economy at a very rapid pace.

On Cisco's technology edge over its rivals

Take for example a situation where a service provider like Airtel deploys Telepresence. Airtel sure is going to bring a change in telecom sector having conquered the Indian market. Telepresence has a tremendous benefit from the business point of view. Any senior executive of a company scheduled to attend a meeting can have a small chat through Telepresence which would bring down the cost of the company and execution of the functions effectively as Telepresence helps in direct interaction between the senior executive and his fellow colleagues. Similarly, if some healthcare company plans to expand to remote areas, the service provider's technology would help the former grow as doctors in metros could diagnose the patients in rural areas without physically traveling to the distant places. These are some of the examples how service providers supported by Cisco can make the company competent.

On Indian service providers supported by Cisco entering other developing markets

Following the acquisition of huge volumes of undersea bandwidth by Indian service providers like Reliance and Tata, India has one of the largest sizes of bandwidth in the world. Reliance and Tata already have their IT arms. If these two companies sell their bandwidth then with the amount of bandwidth they have, they can start offering managed services to the global enterprises. Cisco can also buy future services from Indian service providers like Tata and Reliance because they have their own IT arms and are technically very sound having lots of international bandwidth. So instead of buying services from European or US carriers, we can actually get services directly from India. This is the area where the Indian service providers can first zero in to enter other developing markets. India is also going to see a massive addition of mobile users. The experience of driving billions of Indian subscribers is a rich experience that not many countries have. In a market where there are billions of users, you can try many business models and applications. So, India and China can be the most innovative countries from the business model perspective. These service providers can take risk and move on to another business strategy. If out of five businesses, only one clicks there is a huge potential to earn enormous revenue. But if a service provider tries that in a small country of only 10-15 million subscribers, the cost of operation is so high that the service provider can't take much risk. So, Indian telecom market is going to have the advantage. The country also has a large rural environment. Bharti Airtel said they have already reached out to 5000-6000 villages. Expansion of network in rural areas, where there is no electricity, and its maintenance is difficult. If the service provider can make that work, it can take the same business model to Africa. When the service provider has enough experience, it can manage its energy efficiently. This kind of experience can be extremely useful when Indian service providers want to foray into African markets. Indian market is now a very competitive environment so if the service provider survives or prospers in the competitive environment, it makes the telco sound in business strategy.

On new technologies that would foster service providers become experience providers

From the business point of view, our product Telepresence has tremendous benefits. One of the personal benefits is that I run a world-wide business and ran it out of the US for twenty years and then I moved to India but am still able to run business out of India. I have all the challenges if I were to travel extensively. But with Telepresence I can meet anybody anywhere.

What is going to happen is that in the Indian hotel industry the service providers will start operating Telepresence as a managed service. For example, any senior executive of a company can attend a meeting with another counterpart via Telepresence when they are actually at a hotel chain like Taj Hotels of Delhi and Mumbai if the hotel chain, indeed, deploys Telepresence. This can boost up hospitality sector. Another application can be in medicine where an experienced doctor in a metropolitan city can actually diagnose a patient in some far-flung rural area. The service providers can try various business models involving risk and on the other side a success story. Any service provider flourishing in the cut-throat competition can actually evolve into an experienced provider. Digital signages can be used in advertising in major commercial areas where the life-size images of an application can, indeed, influence the habit of consumers in buying commodities.

 

 
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