Infinera Corp eyes growth in India
Bangalore houses the largest research and development (R&D) centre for Infinera Corporation, second only to the company's headquarters in California's Silicon Valley. Infinera Corporation is a NASDAQ-listed company that provides digital optical networking systems for telecommunications carriers.
Amid the boom in Asia-Pacific's internet markets, Infinera is eying key markets here, particularly India, not just for R&D, but also to drive business growth and capitalise on how an increasing number of internet users are demanding more bandwidth at reasonable rates.
Infinera uses photonic integrated circuits—fingertip sized micro-chips—to send data through long distances at speeds of around 500 gigabits per second. The company believes this technology would make things simpler, scalable, efficient and therefore, cheaper for communications firms, including internet service providers.
In a market like India, where rising consumption of rich media cloud services is likely to exert pressure on average revenue per user (ARPU) of communications service providers, Infinera hopes its DTN and DTN-X platforms would offer operators an advantage, both in terms of capital, as well as operational expenditure.
With India's average internet penetration lower than the global average of 30 per cent, Infinera is also banking on the fact that 3G and 4G services in the country would lead to a sharp increase in the number of broadband users and consequently, the need for more bandwidth.
“I think in the Indian market, no matter what access technology you look at, you have pretty low ARPU numbers. So, these operators have to be very efficient, not only with capex, but also with the cost of running these systems after their installation. I think we have a big advantage in terms of the ease of use of our systems,” says Michael Capuano, vice-president (corporate marketing), Infinera.
Reliance Globalcom, a division of Reliance Communications, is the only customer in India that Infinera names at the moment. Though the firm is “talking with many large providers there”, it hasn't made “any additional announcement yet, since not all of them would let us mention things,” adds Capuano.
India is expected to grow into a “significant part” of Infinera's business in the Asia Pacific region, revenues from which, though a small contributor to the company's global income, are slated to double year-on-year.
“There are customers in India who have global networks and these require capacity, whether the capacity is driven in India—which I do think is required in some larger cities—or required between India and places like Africa, Europe and North America,” said Andrew Bond-Webster, vice-president (Asia Pacific), Infinera.
Infinera would continue to invest in its R&D operations in India, based out of Bangalore. And, with its R&D spend running at nearly 30 per cent of revenues this year, compared with 23 per cent last year, Infinera's Indian operations may well be augmented further, including an increase in headcount. The company's generally accepted accounting principles revenues for the year ended December 25, 2010, stood at $454.4 million, compared with $309.1 million in 2009.