Home / Companies / People /  ‘Ciena to invest $50-100 million for manufacturing in India’

New Delhi: Ciena, a global market leader in optical and routing systems used by carriers and content providers, will invest up to $100 million over the next three to four years to locally design and manufacture equipment for domestic consumption and for exports, president and chief executive officer Gary Smith said in an interview. The company has partnered with contract manufacturer Flex for Make in India, Smith said. Equipment providers’ India market will grow at a higher rate than the corporate average in the coming years, as Indian telcos roll out 5G at breakneck speed, adding more sites as they provide deeper network coverage. Edited excerpts:

How is the Indian market placed compared to other global markets?

We came to India 17 years ago viewing it as a market that would grow over time. The talent was very attractive and it’s played out extremely well..We have 2,500 people here out of our 8,500 global workforce. A lot of our development and innovation come out of here, which we market globally. It’s one of our biggest markets by size and scale, and is the fastest growing market right now.

In Q3, India’s revenues were up 150% on-year to $64 million. Is this growth rate going to sustain?

Ciena will grow at 20-22% next year. India’s growth rate over the next two-three years generally will be at a CAGR of 10-12%. So, the growth rates in India in two to three years will be greater than the corporate average. That’s for sure.

India is rolling out the fastest 5G network in the world. What opportunities does it provide to Ciena?

It’s an arms race, to put it bluntly. They have spent $25 billion on licences which came with obligations to the government around rolling out to many cities. They are putting hundreds and thousands of radios to create connectivity and capacity, and we’re seeing investments in fibre optic, too. So, we will continue to expand. While telcos have gone broad in 5G coverage, full-scale 5G coverage will not be done by 2024, it will be a multi-year investment by major carriers and they will go back and densify the coverage.

Is Ciena looking at Make in India?

We’re starting to manufacture some of the technology in India. It will be primarily routing and switching products to start with, and we could look at optical in the future. They’ll be consumed locally initially, and we’re looking at exports within 12-18 months. We were looking at manufacturing in India for a long time and now we think the time is right with the market getting to the maturity and availability of talent.

Where will the unit come up and what kind of investments are you looking at?

We’re partnering with Flex contract manufacturers here. We think that over the course of the next few years we would be investing $50-100 million for manufacturing along with our partner. Given what’s gone on with supply chain in the last few years, this will be a shift from a supply chain model...to one that is multi-sourced and multi-geographical...India will be part of the strategic shift as it will come up (as a manufacturing hub) along with our existing plants in Mexico and Thailand.

Vodafone Idea is yet to launch 5G. Are discussions taking place on 5G?

Jamie Jeffries, VP, EMEA, Asia-Pac: Absolutely. The recent conversion of their interest on dues from the government was a big move. Like everyone else, we were looking at them in terms of their viability and what their future was going to be. I don’t think we doubted that they would emerge from the challenges they faced but I think everyone recognizes that India needs three operators.

Gulveen Aulakh
Gulveen Aulakh is Senior Assistant Editor at Mint, serving dual roles covering the disinvestment landscape out of New Delhi, and the telecom & IT sectors as part of the corporate bureau. She had been tracking several government ministries for the last ten years in her previous stint at The Economic Times. An IIM Calcutta alumnus, Gulveen is fluent in French, a keen learner of new languages and avid foodie.
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