Competitor Analysis

Competitor Analysis
All Rights Reserved © Alcatel-Lucent 2007

Main Competitors
2 | Competitor Analysis | April 07 All Rights Reserved © Alcatel-Lucent 2007

Competitor Analysis- Ericsson

Company Profile
 177.783 SEK Billion (19. 43 BEuro) in Sales (2006)
 Over 1,000 networks deployed among 425 Customers in 140 Countries
 40% of all mobile calls are made through Ericsson’s systems
 Employees (2006): 56,055
1€=9.32580 SEK Dec’06

Business Profile
 Operates in three business segments:
 Systems (Mobile Networks, Fixed Networks and Professional Services),
 Mobile Phones (through the 51/49 JV with Sony; majority stake with Sony)
 Other operations (a number of small businesses including microwave systems for defense,
enterprise systems, network technologies for cables, mobile platforms and power modules).
 40% of Mobile reveunes earned from Emerging markets ( Source: Gartner)

 Bought Redback Networks for $2.1 billion, taking on Cisco Systems in the market for
Internet routers
1€=9.15SEK Dec’06

Organisational Structure
CEO
Carl-Henrio Svanberg
Handsets Networks Global Services Multimedia

JV Kurt Jofs Hans Vestberg Jan Wäreby
Access Multimedia
BB Nwks (Transport) Enterprise
Sivert Bergman Mobile Platforms
Systems core Consumer & enterprise Lab
Björn Olsson
Cables
The new company organization will go into effect on
Power modules Jan. 1, 2007,

Revenues by segments
2006 Revenues
19.43 Bn Euro
7%
19%
Mobile Networks
Professional services
Fixed Networks
74%
10 largest Markets (%Sales) 10 largest Markets %Sales
8 20 19.43
7 18
15.93 14.43 16.59
16
6
14 12.86
5
12
4 10
3 8
2 6
4
1
2
0
US China Italy Spain Australia India Sw eden Brazil Indonesia 0
2002 2003 2004 2005 2006
1€=9.15SEK Dec’06
Revenues by regions
2006 Sales
Net Revenues: 19.43 Bn Euro
9%
16%
52%
-14%
-18%
+24%
43%
+42%
Growth over previous Year (+/-)

+23%
50%
W. Europe CEEMA APAC NA LatAm

Presence in India
 Present in India since 1903.
 Head quartered in Gurgaon with an employee base of 1500 spread over 22 offices across the
country.
 Has about 3000 developers through its partners.
 Has established 41 GSM and 6 CDMA networks in the country .
 41 out of 77 operational GSM mobile system networks have been supplied by Ericsson in India
 Customers include Reliance, Tata, BSNL MTNL and Bharti.

 Bharti and VSNL and MTNL : Broadband Access
 Reliance, Tata, BSNL & Bharti : Trans-local wireline switches

Business Strategy - Worldwide
Strategy for fixed

 Investing in Managed services for the long term, and raising the entry barrier for its network outsourcing
business
 To dominate the core of the network and then move out to access.
 Leverage its legacy switch base, offer a converged core, and put forward a strong IMS story.
 Acquisition of “Marconi” to strengthen their optical & microwave transmission products and services
portfolio
 Sees combination of Triple play and wireless as key for US telcom operators to compete with cable MSOs
 Expects 2G uptake in China due to delays in 3G uptake
 Acceleration of 3G in emerging markets
 Expects growth of about 5% for the world’s biggest mobile standard, GSM, and its successor, WCDMA, in
2006.
Strategy to boost Access

 Aggressive pricing – at both the core and access level
 Buying market with aggressive pricing– to get EDA (Ethernet DSL Access) references

Business Strategy - India
Wireless Equipment market

 Pushing local Manufacturing (GSM Equipment) at Kukas, Jaipur with an investment of USD 250 million in
2005
Increasing R&D commitment
 Continue outsourcing R&D to Wipro and TCS.
 R&D centre at Chennai focusing on VAS, Service layer, prepaid charging solutions, IN.
Business communication products
 Have a direct sales model and are engaged in direct marketing with end customers
 E/// has deployed one of the largest installations of EPABX at IIT Kharagpur
Stepping up Global Service Capability:
 Global Service Delivery Centre (GSDC) being set up in Gurgaon to boost up services.
 GSDC to include Network Operations Center (R-NOC), System Integration Competence Center (SICC), Product
Customization Center (PCC) and Ericsson Mobility World Center.
Conducted the first high-speed data downlink packet access (HSDPA) demonstration in India
during the Convergence India Telecom exhibition in New Delhi in March 2006

Ericsson has clinched a multi-million dollar deal to supply, manage and maintain 60 million GSM
lines for Bharti Airtel Ltd.
The equipment is to be supplied over three years and will include third-generation mobile
service capability.
The deal, a top Bharti Airtel executive told Business Standard, was still “under discussion”.
Ericsson officials were also tightlipped about the deal, but sources said the order had been
finalized and would set a new benchmark in per line valuation. According to some estimates,
the deal valuation would be well over $2 billion.
A key reason for Ericsson bagging the deal is the company’s 75 per cent market share in Bharti s
installed mobile capacity that currently caters to an estimated 22 million mobile users.
In February 2004, Bharti had awarded a three-year contract, worth $ 400 million, to Ericsson to
supply, manage and maintain GSM networks in several states.
In August 2006, Ericsson inked a USD 1 Billion contract with Airtel towards the design, planning,
supply and installation commissioning of Airtel’s networks in 15 circles.
Signed 3-year GSM expansion contract with Idea Cellular in March’07.Will provide radio access,
microwave transmission and soft switch network architecture in the Maharashtra, Gujarat,
Rajasthan, Madhya Pradesh and Himachal Pradesh circles till Nov 2009

Strategic Solution
Ericsson Expander Solution

 Expander radio coverage solution reduces the total cost of ownership by 30% for the capex and 30%
for the opex (30-50% less number of sites), and the mobile soft switch lowers the core network opex
by up to 50%.
 Pitching it for expansion in the rural areas for both CDMA and GSM. Have deployed it in Africa
CAN PROVE TO BE USEFUL SOLUTION FOR RURAL TELEPHONY IN INDIA

Manufacturing Sites
Sites Sq m (2005) % of total

Sweden 9 256,615 88%
Brazil 1 15,840 5%
China 3 15,200 5%
India 1 5,364 2%
Total 14 293,019 100%

Competititve Advantage
Focus on Emerging markets

 Marketing themes focused on emerging markets: Communication for All, Broadband Everywhere
 Winning propositions such as Expander, Capacity growth, Managed Services, evolution to all-IP
and Mobile Broadband.
Finance
Finance is another factor affecting a company's capabilities in emerging markets.
 Well placed with substantial cash reserves and willingness to provide vendor financing for
strategic accounts.
 Many governments support local companies in winning export business with export credit
guarantees and the Chinese government is particularly supportive in this regard. Ericsson's
subsidiary there, called Ericsson China, is well placed to use such help.
More information: http://www.ericsson.com/

Competitor Analysis- Nokia Siemens
Network
Competitor Analysis- Nokia

Company Profile
 Nokia’s Networks Business Group & the carrier related businesses of Siemens Communications
merged in Q1’07 to form Nokia Siemens Network
 2006 calendar year pro forma revenues of about 17.1 billion Euro.
 Approx. 60,000 employees
 600 customers in 150 countries
 Major R&D sites are in Finland, Germany, India, China and the US.
 Main manufacturing sites in China, Finland, Germany, India and Italy
 Market Position:
 #2 in Wireless Networks
 #2 in Operator Services
 #3 in Wire line Networks

Organization
CEO
Simon Beresford
CFO COO CTO CMO

Peter Schonhofer Mika Vehviläinen Stephan Scholz Karl-Christoph Caselitz

Business Model

Presence in India
 India is Nokia’s third largest market
 Invested USD 200 million in Handset manufacturing in 2005
 Facility in Chennai for manufacturing handsets and base station controllers;

Nokia’s 10th major plant across the globe
 Nokia’s operations include networks and terminals sales divisions, three R&D
facilities and an upcoming manufacturing facility in Chennai that will produce
both terminals and GSM infrastructure equipment
 During Q3 2005 Nokia won a US$125 million managed services and

GSM/EDGE expansion contract with Bharti and announced plans to
establish a NOC in India by year-end.
 Manages 8 of Bharti’s 23 circles.
 Nokia becomes the first equipment vendor in India to receive a certification for its Next Generation mobile soft switch from the
Telecom Engineering Centre (TEC)

 Its explicit strategy is to wipe out competition in Tier 2 and Tier 3 mobile service providers.
 Investing on a long term basis for managed services contracts
 Announced 20 contracts in GSM/GPRS/EDGE, and 16 contracts in WCDMA with 10 new customers, which puts it in 44 of the 100
operators’ networks that have launched WCDMA.
Nokia and Siemens have decided to merge their carrier activities into Nokia Siemens Networks, a 50-50 JV, with €15.8 billion sales, 78% in
wireless (infra + services).

 Expansion in rural areas
 Pushing WCDMA with reliance
 Has entered into a 5 year Managed Services contract with Hutch, to run its network
operations in 13 circles
 Nokia has one global NOC capable of network outsourcing located

in Chennai.
 Nokia will invest up to approximately USD 150 million in its Chennai based
manufacturing plant which will support the growing demand for mobile handsets and
network infrastructure in the Asia Pacific region.
 In June06, before the announcement with Siemens, Nokia

announced that its Managed Services activity would be managed
from India.
More information: http://www.nokia.com/

Presence in India
 Siemens India : Equity Structure (as on 30th September 2005)
 Siemens AG Germany 54.64%

 Institutional Investors 26.00%
 Indian Public 14.78%
 Others 4.59%
 PAN-India presence with 13 Manufacturing Plants & 19 Sales Offices

 Consolidation of Siemens Public Communication Networks Ltd. into Siemens

AG India.
 Siemens wins a contract from Spice Nepal to build a nationwide GSM Network.
 Com is focusing on WCDMA/HSDPA, IPTV and triple play.
 Has a frame contract with Banglalink (a 100% subsidiary of Orascom

Bangladesh) for $50 M.
Finance
 De-emphasized vendor financing in the past few years.
 Uses its network of banks and credit financing businesses and acts as a
facilitator between the operator and the bank.

 During his visit to India, the President and CEO of Siemens AG, Dr. Klaus
Kleinfeld announced that India is an opportunity market for Siemens globally.
 Siemens’ Enterprise Networks Division forges a strategic alliance with

Enterasys Networks, to provide Convergence solutions for the Indian enterprises.
 Has won 2 contracts to supply GSM-R to Indian Railways.
 Siemens Ltd has and Huawei-3 Com have entered into a strategic alliance to offer
futuristic IP-based voice, data and video network solutions, which optimise the
total-cost-of-ownership for Indian enterprises.

Weakness
 Siemens lacks in-house solutions and usually has non-exclusive partnerships.
 Siemens is not well positioned in new technologies like WDM, Optical switching,
Submarine applications.
 Siemens was #3 in the DSL market but is very weak in the fast growing IP-
DSLAM market with a MS of <5%, which optimise the total-cost-of-ownership
for Indian enterprises.
 For Edge and Core IP routers Siemens does not have its own solution but has
reseller partnership with Juniper.
More information: http://www.siemens.com/

Competitor Analysis- Motorola
Competitor Analysis - Motorola

Company Profile
 A Fortune 100 global communications leader that provides seamless mobility

products and solutions across broadband, embedded systems and wireless
networks.
 Motorola had sales of US $42.87 billion in 2006.
 Spent $4.1 billion (9.5% of sales) on R&D in 2006.
 Has over 8000 patents in the US and around 12000 patent in foreign
countries
 Has 320 facilities in 73 countries with approximately 68,000 employees

Business Profile
Motorola is organized around four business segments:
 mobile devices,
 networks (mobile infra + bb access),
 government & enterprise mobility,
 connected home (cable + telecom set-top boxes).
Have been combined in Q1 2006

to leverage synergies and lower CAPEX

Chairman
Edward J Zander
Mobile Devices Networks & Connected Home Solutions

Enterprise
R Garriques D.M. Moloney
GQ Brown

Contributions of the segments to the sales and the operating profit
Sales 2006 US$ 42.8 Bn
11%
2006 sales: US $42.88Bn,
OP:US $4.092 Bn.
32%
57%
Regional Sales Split Mobile Devices Network and Enterprise Home solutions
2006 Sales
3%2%2%
11%
44%
38%
US Others China UK Germany Israel

Trend of Net Sales
42,879
45,000
40,000 36,843
35,000 31,323
30,000
23,155
25,000
20,000
15,000
10,000
5,000
0
2003 2004 2005 2006
Figures in Mn $

Presence in India
 Motorola Mobile Devices has established its High Growth Market (HGM)
headquarters in Delhi with the senior management team relocating to
India.
 Global Software Group (GSG) labs in Bangalore and Hyderabad working on

Next generation wireless, BB Technologies, Software platforms application
frameworks. Focus is to make software an integral part of everything
Motorola does.

Presence in India
 R&D center at Bangalore: Work on Core Networks Division (CND) and the
Embedded Communications Computing (ECC) both part of Motorola
Networks.
 40% of Motorola’s software developed in India.
 Wipro Technologies, the global IT arm of Wipro, and US based telecom

major Motorola will jointly invest $20m over the next three years, in their
newly formed 80:20 joint venture WMNetServ.
 The JV would target global telecom service providers, government and
enterprise markets for service delivery

Technology Strategy
 Three pronged strategy:

 Cool innovative handsets
 Connected Homes
 Seamless Mobility
 To build critical technology assets in security, manageability, experience architecture (intelligent interaction,
content handling, real-time communications, sensing & control), and connectivity architecture (session
continuity, heterogeneous networks).
 To lead in the following next technologies:

 Short-range communications
 Wide area mobile broadband
 Mesh networking
 FTTN & FTTP based on the Quantum Bridge acquisition.
 Soft switches and IMS.

R&D Strategy
 Leverage software: use common platforms across Motorola’s divisions for security,
QoS, network management, user-centric solutions.
 Accelerate time to market: Motorola is looking to tap into start-ups via

investments and acquisitions.
 Mobilize R&D, by putting engineering teams close to talented areas (Eastern

Europe, China, India, Boston and Chicago) or close to customers, and shifting
engineers from component levels towards applications and to end-to-end
solutions capabilities.

 E-Education Periyar PURA project: The project will use Motorola’s Canopy TM
in 7 villages.
 Canopy TM : (Wireless broadband solution ) Its one of the products in the WiMax
technology which has been tested.
 Considering setting a manufacturing base in India.
 Rajasthan is using Motorola’s MOTOWi4 Canopy technology for a statewide wireless network. The network will be the wireless backbone for the state
and will be used by 10,000 village councils providing internet to rural areas.
 Plans to upgrade public and enterprise safety market from being a two way
to a radio network and plan to have interconnected radio networks that
include crisis communication.
 Announced establishment of a distribution agreement with ITC’s e-Choupal
division for its Mobile Devices business. (March 06)
More information : Motorola

Competitor Analysis - Nortel

Company Profile
 Present in 150 countries.

 Revenues: US $11.4 Bn, Net earning: US $ 28Mn
 R&D expenses: US$ 1.939 Bn
 Have around 34,000 employees
 Reorganized with 2 product groups & a service group.
1. Enterprise Solutions & Packet Networks: combines enterprise telephony and

Ethernet,optical and wireline data products
2. Mobility & Converged Core Networks: combines existing mobile businesses with
“critical” core network technologies
3. Global Services & Operations: delivers multi vendor services and solutions for
enterprise and carriers worldwide (Nortel finally tries to come back in services).
 Nortel and Microsoft have decide to team up to develop next

generation enterprise communication platform ( Sept 06)

Business Profile
 Nortel has 4 reporting segments
 GSM and UMTS
 CDMA
 Carrier Packet
 Enterprise
 Operates in 4 regions
 Eurasia
 North America
 Greater China
 Caribbean & Latin America

Organizational Structure
CEO
Mike Zafirovski
Corporate Operations
Dietmar Wendt
Mobility & Converged Metro Ethernet Enterprise Solutions Government Solutions

Core network (former PEC)
Phillipe Morin Steve Slattery
Richard Lowe Chuck Saffell

Revenues
2006 Sales $ 11.4 Billion
Revenues by Segments 7%
6%
29%
11%
11%
14% 22%
GSM & UMTS CDMA Enterprise voice Carrier voive
Revenues by Region Optical Entreprise data Carrier data
2006 Regional Sales Split

5%
15%
6% 45%
28%
US EMEA Canada Asia CALA

Trend of revenues
11,500
11,400
11,000
10,500 10,913
10,000 10,253
9,500
9,516
9,000
8,500
2003 2004 2005 2006
Figures in Mn $

Presence in India
 Established its first office in India in 1991.

 Has office set ups in Mumbai, Delhi & Bangalore.
 Has established itself as a serious player in Optical transport, Enterprise

and Wireless markets.
 Key Focus Areas are:

 GSM
 CDMA
 GSM-R (GSM for Railways)
 Optical Networks
 BPO Market
 Also looking at India fro expanding its manufacturing through Original
equipment manufacturers (OEMs)

Business Profile: India
 Has a leadership position in the BPO/call Centre market with over 16,000
agent positions deployed for :
 Bharti - AirTel
 Taj Reservation Network
 American Express
 iSeva
 BNK Capital Markets Group
 Hinduja Technology Media Telecom (HTMT)
 Hiranandani
 OfficeTiger

Business Profile: India
 Boasts of an impressive clientele in other telecom segments including :
 BSNL- Bagged a $ 500 M contract to roll out 7 M GSM lines in Southern and Eastern Zones
of India. It entails deployment of end- to –end GSM and GPRS solutions, including GSM
radio base stations, MSCs and IN.
 Reliance Infocomm – has supplied 60,000kms national optical backbone, India's first 10G
DWDM network and the largest in Asia, as well as a new CDMA digital wireless network
in the state of Gujarat.
 Bharti - A high-capacity optical SDH backbone, spanning 35,000kms
 BPL Mobile Communications - A major GSM network expansion in the state of
Maharashtra.
 GAIL - A DWDM/SDH optical backbone interconnecting India's top 20 traffic routes.
 Eastern Railway (with TCIL) - A next generation GSM-R (GSM for Railways)
communication system in the state of West Bengal.

Business Strategy – Worldwide
 To tap the present and future needs of the growing enterprise customer base.
 Focus on the delivery of converged voice and data networks, IP telephony, multimedia
contact centres, wireless LAN and Wireless Mesh Networks.
 Working with carriers to provide the metro optical connectivity required to support
enterprises in deploying security-based, data-protection solutions such as business
continuity, disaster recovery and storage area networking.

Business Strategy – India
 Nortel has established leadership positions in India's optical transport market and in the enterprise
arena - especially in the call centre and business process outsourcing (BPO) segments.
 Currently it is building upon the solid skills and technology platform it has created to win
significant new contracts in wireless as well as in the wireline and optical markets.
 It is consolidating its product portfolio in India to focus on areas where the company can capture
at least 20% of the market. The focus would be on WiMAX and IPTV
 Bharti Tele-Ventures has signed a five-year managed services agreement with Nortel to host
contact centre services for Bharti Airtel subscribers
More information : http://www.nortel.com/

Competitor Analysis - Cisco

Company Profile
 Founded in 1984 by a group of computer scientists from Stanford University

 Cisco equipment directs two-thirds of the world’s Internet traffic
 Worldwide leader in networking for the Internet.
 Net sales of US$ 28.5 Billion (FY 06)*-
Products: US $23.9 Bn , Services: 4US $ .56 Bn
 Net income: US $ 5.6 Bn(FY 06)*
 48,296 employees worldwide. 7,900 came from Scientific Atlanta acquisition
(As of April 2006 end)
 Has sold 6-million Internet Protocol (IP) phones worldwide.

Business Profile
 Cisco consolidates the results of its operations into two business segments:
 Products
– Switch
– Router
– Advanced technology: Security, IP telephony, home networking, storage
area networking, optical networking & wireless area networking
– Others: Includes access, home network management software and other.
 Services
Source: Corporate Strategy

Organisational structure
CEO
John Chambers
Product Group ‘Customer Advocacy’

Service Group
Charles Glancario
Wim Bfrink

Revenues by regions & segments
FY 2006 Sales USD 28.5 Bill.

Segmentwise
Services
16%
Others Switches
3% 38%
Advanced
Tech.
22%
FY 2006
Router APAC Japan
21% 11% 4%
Emerging
Market
Advanced Technology: Security, IP telephony, home networking, 10% USA &
storage area networking, optical networking & wireless area
Canada
networking
Others: Includes access, home network management software and 52%
other.
Europe
Fy06: Sept 05 to August 06 23%

Trend of Net Sales
30,000
28,484
25,000
24,801
20,000 22,045
18,915 18,878
15,000
10,000
5,000
0
2002 2003 2004 2005 2006
Figures in Mn $

Presence in India
 Entered in the Indian market in 1994.
 Employs over 1400 people in the country in its Global R&D center in Bangalore and
offices in New Delhi, Mumbai, Bangalore, Chennai, Kolkatta, Pune and Hyderabad.
 Areas of Operation
 Voice & data network
 Network Security
 Storage
 Wireless
 Won a large order from BSNL for laying a MPLS backbone connecting 70 locations, in
May’05.
 Customers include BSNL, Srilanka Telecom (in Srilanka) etc..

 To provide end-to-end network infrastructure solution to all customers – service

providers & enterprises.
 To provide end-to-end integrated converged IP traffic on access, switching, routing

and providing advanced technologies like IP & Wireless.
 Has been on an acquisition spree- Scientific Atlanta being the biggest. Other
acquisitions included Nemo Systems, SyPixx, Audium, Metreos and Meetinghouse.

 Collaborate with the ministry for India’s National e-Governance plan

 Establish the SWAN Advanced Technology center of excellence which will serve as Pilots/Proof
of Concept Labs.
 'Common Service Centers (CSC) in 100 villages in India for providing citizens on-line access to
government services in rural areas
 Support BSNL’s telecom network evolution by establishing A-Pac's first IP NGN Lab in
Chennai.
 Have set up office in Pune to focus on Maharashra and Goa region in line with their
network expansion strategy.
 Have announced a major investment plan of USD 1.1 bn over a period of three years.
 R&D activities, including training, development and staffing (US$750M).
 Provide leasing and other financial solutions to Cisco customers and partners (US$150M).
 Invest in Indian start up companies (US$100M).
 Customer support operations - a significant portion of which will be allocated for technical
services, spare parts depots and channel development. (US$100M)
 Cisco is coming up with an NGN lab for IT and Telecom with an investment of US$ 10 Mln.

 Collaborating with IIT- Rourkee to facilitate R&D in Wireless environments

 Cisco will set up networking infrastructure to facilitate R&D on mobile agents in
WAN and wireless environments.
 The infrastructure will also enable research in the area of mobile security in the
delivery of mobile agents.

Strategic Solutions
 The Cisco Business Communications Solution is the first complete purpose-

built communications system for the SMB market.
 In India, it will be offered as part of the new Cisco SMB Class Solutions, which bring
enterprise technologies in voice, routing, switching, security and wireless to SMBs
 Application Oriented Networking (AON) enabling application-aware traffic

processing, and
 IP Interoperability and Collaboration System (IPICS) enabling two-way radio

interoperability for mission critical networks.
Cisco plans to introduce a new emerging technology every 3-4 months
More information : http://www.cisco.com/

Competitor Analysis- ZTE
Competitor Analysis - ZTE

Company Profile
 Founded in 1985, with global headquarters in Shenzhen China

 Deployed over 60 million lines of CDMA equipment in over 100 networks in more than 60
countries and regions
 Second largest Chinese telecom equipment vendor. Majority “State-holding”, “Private
Management” enterprise
 Achieved rapid growth in terms of revenues from 2001 ( US $1.1 Bn ) to 2006 (US $ 3
Bn) via business diversification
 Overseas contribution: 4%  40%
 Handsets contribution: 11%  22%
 PHS contribution : 21%  14% ( due to decreased investment )
 Net profit: US $ 104 Mn. ( Down 33% YoY)
 Employee base of 30,000 as of end 2005.
 14 regional management teams to support customers in over 100 markets.
 10% annual revenue is spent on R&D

Business Profile
 Offers very broad product portfolio

 Wireless communications: mobile GSM, CDMA2000 1x, WCDMA, CDMA2000 1x EVDO and TD-
SCDMA, WLL CDMA 450MHz, PHS, WiMax and Digital trunking
 Handsets: GSM, CDMA, 3G and PHS
 Wireline switch and access: narrowband voice switch, soft switch(NGN), NGDLC access
 Optical and data communications: transmission, broadband access, IP routers, ATM switching
 Others: software systems, services, IN, fixed terminals, modems and other products

Chairman
Hou Weigui
President
Yin Timin
SVP Handset Operations SVP Systems Business

He Shiyou Xie Daxiong
SVP Network Operations SVP CDMA Business

Chen Jie Zhao Xianming

Revenues by regions
2006 Sales: US $ 3 Bn
Others
8%
Africa
13%
Asia (Excl China)

China
17%
62%

Revenues by Segment
2006 Sales:US $ 3Bn

Contribution of Segment to Sale
Others
19%
Wireless
34%
Optical / Data
16%
Sw itch/Access
Handsets
11%
20%

Trend of Revenues
3,000
3,000
2,886 2,743
2,500
2,000
2,039
1,500
1,399
1,000
500
0
2002 2003 2004 2005 2006
Revenue in US $ Mn.

Target 3 strategic markets in the following years
 Overseas: to reach 50% of total turnover by 2008- Exports accounted for 36% of revenue
in 2005 –up from 21% in 2004. Revenue from International sales grew by 26% YoY in H1
2006- (400 Meuro)
 3G: target 20% of total China market.
 Software systems, services :more than doubled in value to reach RMB 1.5 billion (+121%
YoY), but gross margin fell from 135% in 3Q04 to 52%. Domestic carriers are investing
more in IN, VAS, etc., while export to Malaysia and India increased.
 Handsets: become one of its major business

In 2006 ZTE will focus on three transformation areas

Become a main stream supplier in the Global market ( Expand in USA and Europe)
From provisioning hardware products to provisioning software products and services
From an operations/technology-driven business model to a leading market-driven model.
Key breakthroughs
 In the US ZTE is targeting second tier and third tier CDMA operators like Alltel and Leap
Wireless International, Inc
 Aggressive in pitching for its handsets having already supplied handsets to Hutchison 3
Group in Europe – Talks have been initiated with Spring Nextel and Verizon Wireless
 ZTE will soon be installing the first IPTV trial for the Beijing arm of China Netcom
Aggressive pricing strategy- often undercutting its competitors by

20-30%.

Presence in South Asia
Nepal
India •(CDMA2000 cellular/WLL)
•Atlas Interactive (IPTV)*
•BSNL (CDMA WLL)*
Bangladesh
•BTTB (switch)
•WorldTel (CDMA, PSTN)*
•GEP*
•JTL (CDMA terminals)*
* Signed in 2005

Presence in South Asia
 Sri Lanka: National Sri Lanka CDMA2000 network (IP based) for Sri Lanka Telecom
Limited (SLT), Oct 05
 Bangladesh: WorldTel selected ZTE to deploy new national network to cover the whole
of Bangladesh, Apr 05
 Nepal: Rebuild Nepal Telecom GSM Value-added Services Network, Oct 05
 Nepal: Nepal Telecom 10,000 lines of GPRS data services (mobile data services)-the first
time in Nepal, Apr 05

Presence in India
 ZTE has been present in the Indian market since 1999

 ZTE employs about 500 people in India
 Has a flagship factory and R&D centre in Manesar, near Gurgaon.
 Spread over 4,000 sqmts. It is used to manufacture CDMA, GSM, DSL, and NGN equipment, as
well as handsets
 Plans to setup a second manufacturing plant

 Has an alliance with Atlas Interactive Pvt Ltd.,
 Involves supplying and commissioning a TVoIP network as the foundation for a range of triple
play (voice, video and data) services for subscribers. (Jan 2005)
 BSNL DWDM (Dense wavelength digital mutiplexing) project:

 Total Length over 10 000km
 Cover over 3/5 Indian Area
 84 OTM (Optical terminal multiplexer),188 OLA (Optical line amplifier)
 Have a R&D centre in Bangalore which is incharge of VAS products

 Strong handset sales in India

Presence in India
 In 2006 beginning ZTE sought FIPBs approval for investing USD 22.5 Million in India for
its expansion
 ZTE would build a countrywide CDMA 2000 network for Tata Indicom in the next
three years.
 ZTEs customer list includes BSNL,MTNL,TATA Teleservice, Reliance Infocom etc
 Sees India as its most important market, is setting up a second manufacturing plant
in the country as part of its expansion plans.
 Expecting revenues of over $680 million from the Indian market in the upcoming
fiscal 2007-08
More information: http://www.zte.com/

SWOT
Strength Weakness
1. Strong marketing capability and
1. Lack of scale on sales and

sales networks in China

installed base outside China
2. Strong government support in
2. Lack of competitive image in
China
high-end products
3. Powerful competence on R&D
3. Competitiveness of brand
and production
remains low in developed
4. Low cost in operation
market
5. Comprehensive product line and
4. Lack of tech innovation to drive
E2E solution ability(such as 3
market
standards of 3G, full standards
of handsets)
Opportunity Threat
1. Next generation construction 1. Downtrend of domestic
both in fixed and mobile investment
 ?
network 2. Competition among domestic
2. Low cost competence meet the and overseas competitors
trend of cost control of carriers 3. Limited investment in
3. Overseas markets present huge developing countries
opportunities 4. PHS investment drops quickly in
4. Market boosts in 3G and China
handset market 5. CDMA investment falls in China

Competitor Analysis - Huawei

Company Profile
 Huawei has deployed products in over 90 countries/regions.
 Serves 28 of world's top 50 operators.
 Recorded revenues of US $ 10 Bn in 2006, with 65% coming from International markets
 More than half of the top 50 carriers, as well as 31 commercial UMTS and 20 CDMA 1X EV-DO
built since 2004
 Overseas orders exceeded those in the domestic market for the

first time.
 As of end April 2006, Huawei has about 40,000 employees 48% of whom are dedicated to R&D

Business Profile
 Huawei's product portfolio comprises :
 Wireless products (eg. UMTS, CDMA2000, GSM/ GPRS/ EDGE and WiMAX);
 Network products (eg. NGN, xDSL, optical network and data communications products);
 Value-added services (eg. intelligent network, CDN/ SAN and wireless data)
 Mobile and fixed terminals.

Revenues by regions & segments
Segments Mobile Fixed Optical Sw & Sol Data Terminals

GSM, CDMA, WCDMA, NGN, access, switch OSS, IN Router, switch Handsets, CPEs
TD-SCDMA infra. mobile apps. BRAS data cards
2006 sales: € 10 bn
Contribution of segments to sales Contribution of regions to sales
Service & APAC
Software 16%
10% CIS
Data 7%
5% China Middle East &
46% North Africa
Optical 11%
Mobile
12% 57% South Africa
Hong Kong
10%
(East Pacific) Latin America
Fixed 2%
16% Eastern 5%
Europe
3%
Source: Company Data (voice switching)

Trend of Sales
10
10
9
8
8.2
7
6
5 5.58
4
3 3.83
2 2.67
1
0
2002 2003 2004 2005 2006
Figures in US $ Bn

Organization Structure
CEO
Ren Zhengfei
Strategy R&D Sales

Xu Wenwei Fei Min Guo Ping
Supply Chain Finance Administration

Ji Ping Hong Tianfeng
Source: ASB

Organization Structure –Services
CEO
Huawei Technical Services
Domestic Central International

Regional/Local Technical Support Regional/Local
Technical
Technical Centre
Support Centres
Support Centres
Engineering Sales
Engineering Partner Sales Account

Management Management Management Management

Source: Company
Presence in India
 Huawei Telecommunications (India) is a subsidiary of Huawei Technologies

Co. Ltd. having its office in Gurgaon and Mumbai.
 Has an established software development center in Bangalore, with a

manpower of more than 800 software professionals and has achieved SEI-
CMM level 5 certificate.

Become an undisputed global vendor

 Seizing any and all opportunities in Africa, Latin America, Middle East with a
new focus on developed markets in Europe and North America
 Ready to increase headcount on local teams and in local centers such as in
the UK-based European Operational Center
Enablers:
 Build a dedicated services division
 Build a low cost CPE business to develop the market

Geographical focus:
 Emerging markets is what HW is focusing and has made major progress.
 HW is eyeing Vietnam and Indonesia for their significant growth
opportunities.
 Latin America represents a significant opportunity for Huawei in terms of
growth on the wireline side (in particular in DSL), but has very little mobile
infrastructure presence.
 India is another land with opportunity, although India government has to
overcome the “China threat” to let HW operate.
Occupy market with very low price
 Occupy new and valuable market with low price strategy (Either no cost
consideration when entering into new market or using trial and buy, Chinese
Financing or internal strategic allowance).
 Attract customers with flexible commercial terms (usually case by case,
depending on customers’ requirement).

Secure Tier 1 Operators via partnership:

 Partnerships allow Huawei to move up the product/architectural value chain, provide a
channel and brand to penetrate Tier 1 operators (and enterprise accounts), and improve
its technical expertise.
“People’s Sea” strategy:
 Set up fully functioned local sales, marketing, engineering, after sales team.
 Fast local reaction.
 Gain trust from customers by providing prompt after sales services
“Product, Solution & Services Strategy:
 WiMAX: focusing on developing 802.16e products.
 GSM: more sophisticated GSM solution for different customers’ needs:
– EnerG GSM solution for emerging markets, cost saving features such as AMR (3G like
services into 2G network)
– Flexible products such as dual-density BTS, which can be configured and optimised
first for coverage, and later for capacity
– Advanced technologies into GSM architecture, such as GSM/WCDMA softswitches.

Product, Solution & Services Strategy:

 WiMAX: focusing on developing 802.16e products.
 GSM: more sophisticated GSM solution for different customers’ needs:
– EnerG GSM solution for emerging markets, cost saving features such as
AMR (3G like services into 2G network)
– Flexible products such as dual-density BTS, which can be configured and
optimised first for coverage, and later for capacity
– Advanced technologies into GSM architecture, such as GSM/WCDMA
softswitches.
 Core- technology lead
– Huawei has developed its own core network solutions (MSC, GGSN and
SGSN)
– one of the first vendors to have commercially deployed an NGN mobile
switching solution based on 3GPP R4 architecture.
 Services: striving to grow its professional services, spreading parts and repair
capability in 85 countries. Experimenting “managed capacity” style
contracts. ore- technology lead

Marketing Strategy - Worldwide
 Very impressive booths in exhibitions
 Expensive advertising campaigns
 DVD quality video messages
 Big marketing consulting firms (i.e. Mercer)
 Flood of press releases (even before contracts signed)

Business Strategy : India
 Is bullish on India and plans to further expand its operations and investments in the
country.
 Wants to gain stronghold in the Telecom space with its Cost Leadership Strategy.
 Will invest $100 million in India on its R&D centre in Bangalore and set up a
manufacturing facility in India as and when approval for the same comes

Major Contracts in South Asia
 Bangladesh: US$100 million GSM network expansion contract with Telecom Malaysia
Investment (Bangladesh) Ltd(TMIB ), solutions including MSC, BSC, BTS, GPRS, and MMS,
WAP and WIN platforms, May 06
 Bangladesh: Aktel USD 200 mn. frame work contract equipment contract, Feb 06
 Bangladesh: JTL 0.5M line CDMA contract and TMIB 31MUSD GSM second phase contract,
Mar 05
 Bangladesh: PSTN operator Ranks Telecom (RanksTel) second phase network upgrade
and expansion, Oct 05
 India: 70MUSD HFCL expansion (CDMA network & terminals, fixed network solutions,
intelligent network and optical transmission solutions), April 05

Next expansion step ?
Focus in 2005: Europe (both East and West), then North America
Previous steps #1-4
2
Africa
& 1
APAC 4
Middle East
3 Latin
South Asia America

SWOT
Strength Weakness
1. Strong corporate culture-has
1. Unclear relationship with the

grown organically

Chinese government
2. #1 in Wireline, Optical, Services
2. Lack of core IPR in WCDMA and
and software in China
CDMA 2000
3. Technical expertise-Huawei’s
3. Lack of reputation in
brand enables it to recruit
professional services
the best of country’s
4. Lack of footprint in the
engineers and managers.
Americas
4. Cost base is extremely low
giving it significant competitive
edge
Opportunity Threat
1. Leverage relationship 1. Other Vendors have reacted to
established with developing the price shock by partnering
 ?
countries in Eastern Europe, with each other n markets like
Middle East and Africa China and India
2. Have become Vodafone 2. Rising cost base overseas
certified supplier 3. Limited senior management
availability

Competitor Analysis - Avaya

Company Profile
 Was spun off from Lucent Technologies on 2 nd Oct, 2000
 7,000 service professionals
 2,500 certified Business Partners.
 37 network operating and technical support centers worldwide.
 In the Asia-Pacific region, Avaya Global Services has integrated management of all
HP’s voice networks.
 FY06 revenues: US $ 5.15 bn with a gross margin of 45%, and operating profit of
5%.

Company Profile : India
 Avaya acquired Tata Telecom in Oct 2004, and formed Avaya Global Connect.
 Has strategic alliances with systems integrators such as IBM, HP, Netsol and Servion.
 Other partnerships include Polycom, NICE Systems, LG and KTS products.
 Employee strength is around 1000.
 Sales in India for 2004-05 was around Rs. 500 Cr. ( 90.9 M Euro).
 Inaugurated Avaya India Development Centre in Pune, in 2004, to Support Avaya Labs' Global
Research and Development Efforts ; which works on the development of IP telephony solutions,
applications and appliances for the global market.

Company Profile : India
 Avaya India Development Centre in Pune, Inaugurated in 2004, to Support Avaya Labs' Global
Research and Development Efforts ; which works on the development of IP telephony solutions,
applications and appliances for the global market.
 Avaya recently (Sept 06) announced the opening up of Avaya Global Services Delivery Centre, in
Magarpattacity, Pune. The new centre will play a major role in providing round-the-clock support to
Avaya enterprise customers, authorized Business Partners, Strategic Alliance Partners and Avaya
Global Services teams worldwide
 Its customers include - Accenture, American Express, Aviva, Citibank, Daksh, Dell, IBM, Indian
School of Business, JP Morgan, Morgan Stanley, Oracle, Standard Chartered Bank, Tata-AIG, Wipro-
Spectramind, among others.

Business Profile
 Avaya reports its activities in 2 groups:

Sales by segment
 Global Communications Solutions (GCS):
 Large Communication Systems (LCS)

(PBX>100 lines +Sets) 46%
 Small Communication Systems (SCS) 54%
(PBX<100 lines +Sets)
 Converged Voice Applications (CVA)
 Avaya Global Services (AGS):
 Installation and maintenance (I&M) GCS AGS

services
 Rental and managed (R&M) services

Revenues by Area
( FY 06 Sales US $ 5.15 Billion)

CALA
APAC
5%
7%
EMEA
29% US
59%

Trend of Revenues
6,000
5,000 5,150
4,900
4,000 4,387
4,069
3,796
3,000
2,000
1,000
0
2002 2003 2004 2005 2006
Figures in Mn $

Organizational Structure
CEO
Louis J. D’Ambrosio
COO
Michael Thurk
GCS AGS
Michael Thurk Francis Scricco
• Avaya released a new organization, it promoted Louis J. D'Ambrosio, a former IBM executive, from
SVP Sales and Marketing to President and CEO for Avaya,
• It also created a new COO position for Mr. Michael Thurk. Thurk also assumes SVP Global
Communications Solutions.

 Avaya sold its cabling systems business to Commscope.
 Purchased back Expanets, its sales and service unit for small and medium businesses in
the US.
 Acquired Spectel, a leading enterprise audio conferencing equipment vendor.
 In November 2004, Avaya completed the acquisition of Tenovis, a German, privately

held, enterprise communication vendor, strengthening Avaya’s presence in Europe both
in the equipment and the service markets, especially in Germany.
 Laying emphasis on Managed communication services related to IP technology
 Microsoft Avaya Partnership:

 Avaya and Microsoft are expanding their strategic relationship to integrate their
business communications solutions: Avaya MultiVantage Communications
Applications and Microsoft Office Communicator, the unified communications client
for Microsoft Office Live Communications Server 2005.

Business Strategy : India
 Maintain the Leadership position in the BPO segment, which is currently around 52%.
 Strengthen their position in the IP Telephony market, where they have 44% market share.
 Focus on the Telecom and Banking sectors.
 Bought the remaining 25% of Tata Telecom in India to consolidate its presence in the
Enterprise segment.
 Have set up Avaya GlobalConnect Customer Studio in Mumbai which is the first-of-its-kind for
the company in India and in the Asia Pacific region.
 The Customer Studio aims at building and showcasing personalized demonstrations of
communication solutions to Avaya GlobalConnect customers.
 Avaya GlobalConnect and OKI have partnered to provide IP based voice solutions in India for
SME/SMBs
 Avaya GlobalConnect and the Avaya India Development Center exemplify the increased
commitment to the Indian market by Avaya.

www.alcatel-lucent.com

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2 | Competitor Analysis | April 07 All Rights Reserved © Alcatel-Lucent 2007

All Rights Reserved © Alcatel-Lucent 2007

 177.783 SEK Billion (19. 43 BEuro) in Sales (2006)

 Over 1,000 networks deployed among 425 Customers in 140 Countries

 40% of all mobile calls are made through Ericsson’s systems

 Employees (2006): 56,055

1€=9.32580 SEK Dec’06

4 | Competitor Analysis | April 07 All Rights Reserved © Alcatel-Lucent 2007

 Operates in three business segments:

 Systems (Mobile Networks, Fixed Networks and Professional Services),

 40% of Mobile reveunes earned from Emerging markets ( Source: Gartner)

5 | Competitor Analysis | April 07 All Rights Reserved © Alcatel-Lucent 2007

Handsets Networks Global Services Multimedia

6 | Competitor Analysis | April 07 All Rights Reserved © Alcatel-Lucent 2007

10 largest Markets (%Sales) 10 largest Markets %Sales

Growth over previous Year (+/-)

8 | Competitor Analysis | April 07 All Rights Reserved © Alcatel-Lucent 2007

 Present in India since 1903.

 Has about 3000 developers through its partners.

 Has established 41 GSM and 6 CDMA networks in the country .

 Customers include Reliance, Tata, BSNL MTNL and Bharti.

9 | Competitor Analysis | April 07 All Rights Reserved © Alcatel-Lucent 2007

Strategy for fixed

Strategy to boost Access

10 | Competitor Analysis | April 07 All Rights Reserved © Alcatel-Lucent 2007

Wireless Equipment market

11 | Competitor Analysis | April 07 All Rights Reserved © Alcatel-Lucent 2007

12 | Competitor Analysis | April 07 All Rights Reserved © Alcatel-Lucent 2007

Ericsson Expander Solution

CAN PROVE TO BE USEFUL SOLUTION FOR RURAL TELEPHONY IN INDIA

13 | Competitor Analysis | April 07 All Rights Reserved © Alcatel-Lucent 2007

Sites Sq m (2005) % of total

14 | Competitor Analysis | April 07 All Rights Reserved © Alcatel-Lucent 2007

Focus on Emerging markets

More information: http://www.ericsson.com/

15 | Competitor Analysis | April 07 All Rights Reserved © Alcatel-Lucent 2007

Competitor Analysis- Nokia

All Rights Reserved © Alcatel-Lucent 2007

17 | Competitor Analysis | April 07 All Rights Reserved © Alcatel-Lucent 2007

CFO COO CTO CMO

18 | Competitor Analysis | April 07 All Rights Reserved © Alcatel-Lucent 2007

19 | Competitor Analysis | April 07 All Rights Reserved © Alcatel-Lucent 2007

 India is Nokia’s third largest market

 Invested USD 200 million in Handset manufacturing in 2005

 Facility in Chennai for manufacturing handsets and base station controllers;

 During Q3 2005 Nokia won a US$125 million managed services and

20 | Competitor Analysis | April 07 All Rights Reserved © Alcatel-Lucent 2007

 Investing on a long term basis for managed services contracts

21 | Competitor Analysis | April 07 All Rights Reserved © Alcatel-Lucent 2007

 Expansion in rural areas

 Pushing WCDMA with reliance

 Nokia has one global NOC capable of network outsourcing located

 In June06, before the announcement with Siemens, Nokia

22 | Competitor Analysis | April 07 All Rights Reserved © Alcatel-Lucent 2007

 Siemens India : Equity Structure (as on 30th September 2005)

 Siemens AG Germany 54.64%

 PAN-India presence with 13 Manufacturing Plants & 19 Sales Offices

23 | Competitor Analysis | April 07 All Rights Reserved © Alcatel-Lucent 2007

 Consolidation of Siemens Public Communication Networks Ltd. into Siemens

 Has a frame contract with Banglalink (a 100% subsidiary of Orascom

24 | Competitor Analysis | April 07 All Rights Reserved © Alcatel-Lucent 2007