Ericsson has said that its deal with France Telecom-backed Augere to supply equipment for fourth generation (4G) technology based broadband services ceased to be operational with the latter deciding to exit the Indian market.
Chris Houghton, Head of Region, Ericsson India, told Business Line that more than 4G it will be 3G mobile services that drive broadband as it is accessible and affordable.
“4G is still at a nascent stage and existing roll-outs are small in comparison to 3G. But eventually 4G will find its place and Ericsson will gain contracts in 4G,” Houghton said.
Augere had bagged broadband spectrum for Madhya Pradesh and Chhattisgarh during the spectrum auctions held in 2010.
In 2011 the company signed a deal with Ericsson for supply of network gear. But the company has since decided to exit due to regulatory uncertainties and is looking for buyers.
Houghton, who has recently taken over as the head of Ericsson’s India business, said the short-term headwinds in India’s telecom sector might look challenging. “Operators in India will eventually increase their capital expenditure in network infrastructure to sustain the growing consumption of data and voice. This may require operators to contemplate shifting their customers around in multiple bands of frequency due to spectrum availability constraints and hence our priority on ensuring multi standard radio networks,” he said.
Ericsson recently won a managed services contract worth $1 billion from Reliance Communications for their wireline and wireless networks. The company’s India revenue grew 30 per cent in Q1 after a 34 per cent decline last year.
India operations
While globally Ericsson had announced cost cutting measures, Houghton said that India operations continue to grow.
“We will scale manufacturing to address needs of near markets, Ericsson’s global Services Centre sits in India and post the recent Reliance Communications deal, Ericsson has absorbed 5,000 people,” he said.