In search of India’s Cisco

I shocked an Indian audience at a tech conference recently. I told them no Indian company was among the market leaders in any of the emerging or established telecom equipment segments. And that most telecom software development in India was limited to outsourcing. One learned government official present at the conference was clearly disappointed. In his closing remarks he pointed out the reason for that: “Maybe it is due to the fact that our companies do not have the marketing dollars to market their products.”

That is actually not a valid reason. I agree that technology companies in India are not Press Release driven. But the underlying assumption that there is a lot of good technology coming from India is hype. In telecoms there is very little innovation going on. There is huge demand for core infrastructure products within the country. And there are not domestic Ciscos and Huaweis. Local outfits like ITI and C-DoT are usually content with localizing core infrastructure products from overseas suppliers. Those are the two that come to mind. There was also Hughes Software Systems that got acquired by Flextronics. The other ones would be smaller outfits like OnMobile and Tejas that are focused on certain niche segments.

Lack of innovation in telecoms in India stems from the fact that the domestic services market in India is not advanced enough. Take Cisco and Alcatel for instance. Their home turf is very innovative. So they are forced to be competitive. Obviously they then find it easier to sell into markets like India that are far less advanced in terms of demand for new features and applications.

Apart from the innovation issue there could be some other reasons why we do not see a Huawei or a Samsung or an OKI coming up in India. I think R&D is very weak. Quality of manpower could be another issue. Most talented young engineers leave the country for better exposure overseas.