May 5, 2005 1:00 PM PDT
India enters the networking market
Though most of its sales to date have been in its home country, Tejas Networks, which is based here and specializes in Ethernet-over-Sonet boxes, has started to sell equipment in North America. Rather than sell the gear under its own name, Tejas serves as an original equipment manufacturer, or OEM, for multinationals, which put their own brand name on the products.
"OEM is going to become a way of life for them. It is the only solution," said Sanjay Nayak, CEO of Tejas. "They have less money to spend on R&D."
Following in the footsteps of China's Huawei Technologies and ZTL, a couple of Indian companies are trying to get a foothold in the global market for networking gear.
Huawei has already shown that upstarts can break into the market--it regularly takes on Cisco. Still, one of the biggest challenges will be getting over the credibility hump. Product companies in India remain somewhat rare. When Tejas started, most potential customers assumed it was repackaging technology from a Western vendor.
"If you use a cell phone in Mumbai, there's an 80 percent chance it went through us," Nayak said. "We have the opportunity to become a half-billion dollar company in the next five years."
Meanwhile, Telsima is coming out with a broadband switch for wired and/or WiMax traffic. The company expects to hit a price point that will come to roughly $150 per user, less than the $350 per user cost a similar product from a North American manufacturer might run, even if the North Americans used some overseas labor, said M.T. Karunakaran, CEO of Telsima.
"If we can hit $150, it will trigger WiMax. Carriers will look at it to connect towns and villages," Karunakaran said. "The primary focus is India, but we would like to build a global company. We are talking to a reseller in Japan."
Besides the usual factor--lower development costs--the push into networking comes because of the conditions of the Indian telecommunications market. On one hand, it's incredibly small. There
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