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With voice being commoditised, SMS set to assume greater role, foresees Tekelec

Rajesh Kaul
MD, Tekelec India
  TT Correspondent |  New Delhi | 23/06/2009

US-based Tekelec is betting big on Indian potential for its range of SMS offload/spam filtering and MNP (mobile number portability) solution offerings. In an interaction with TelecomTiger, Tekelec India’s MD, Rajesh Kaul, shares the company’s business plans to gear up for the changing market environment in India. 


Q1. Sir, tell us about Tekelec product offerings for the Indian market?

Ans: Tekelec is strategically positioned on the Signaling System 7 (SS7) layer, and has the largest global market share of SS7 signal transfer point (STP) shipments. Our SS7 expertise means that we are able to streamline SMS processes, as well as the ‘back end’ operational processes. We have also recently acquired companies such as mobile messaging provider mBalance to strengthen our product portfolio, including SMS offload/spam filtering.


Therefore, if you look at the high-level products, we have SSTP (secure socket tunneling protocol, for Low speed/High Speed, SIGTRAN and now SIP), giving operators a complete range of solutions to meet present and future technology rollouts – a must-have if mobile penetration rates in India continue to grow at a rapid pace . On top of this, the monitoring capability of our platforms acts as a very strong business tool and SLA (service level agreement) management tool for operators.


Tekelec is also the market leader in real-time connection number portability solutions – with 35 percent market share – and hence we are in a very strong position to meet Indian operators’ needs. Since we are already in the signaling networks for 5 of the top 7 Indian operators, it becomes a logical evolution for these operators to transit to mobile number portability (MNP) on our platform.


In terms of availability, all of these products are available across all our global clients, and customized to the regional needs.


Q2. Please provide us more insight into the value chain of delivery of SMS services with respect to the technological infrastructure required.

Ans:  For the SMS delivery platform, the legacy approach means that the majority of SMS messages in the network are stored and forwarded, risking message delays or delivery problems during peak traffic periods. The platform which Tekelec has introduced in India is basically an ‘SMS offload’, whereby the SMS is sent directly to the end user rather than through the short message service center (SMSC) – saving valuable resources and improving the delivery experience.


Q3. SMS started off as a VAS and gradually assumed a position as a conventional form of communication. Your view points on this transition?

Ans: Absolutely. The eastern part of the world, including India, has derived major benefits from the SMS business. With the ARPU (average revenue per user) for voice drastically declining, the operators are increasingly looking at SMS as an alternative channel of revenue generation – especially as the younger generations are hooked on this tool.


For the immediate future, there will be a strong growth on both the SMS and voice markets in India.  With time, however, voice is going to become commoditised and customers will start paying very little per minute for it. This means operators will provide more of a package-driven approach for SMS-based services, and we might even see a bundled fixed SMS package for customers in the future. 


With this, consumers as well as operators would benefit since there would be a fixed ARPU defined for them, where currently, the ARPU keeps sliding down and there is no control on it.


Q4. A particular school of thought says that with the entry of 3G and access to wireless broadband, some of the value-added services which use SMS as a channel, will migrate to the GPRS medium for interactivity with an aim to enhance the end-user experience. Do you think such a scenario will result in SMS medium losing out on significant avenue of revenue generation from the VAS stream?

Ans: When you talk about technologies like GPRS and 3G, they are simply a platform to send data at an enhanced speed. So, it is immaterial linking two different things that belong to two different domains all together. SMS is an application, whereas the technologies are speed enhancers. For us, it’s more a question of how an operator can most effectively deliver the services its customers want to use, and we are able to work with them over whichever standard they use.


The prominence of SMS is going to scale up, regardless of the introduction of new technologies such as 3G and mobile broadband. The SMS is simple, easy to use and understand, and cheap, which is why we’ve found it has such resonance in so many markets.


Q5. What are your investment plans in India for the near future?

Ans: Being a technology-driven company, our investments are in strengthening our product portfolio. We spend more than 20 percent of our revenues on R&D.


Q6. How big is your team size in India?

Ans: We have major investments in resources and SS7 expertise. Including contract personnel, our team size is 40. Since we have major R&D outsourced in the country, at any given time our ability to increase this number is easy.


Q7. Who are your clients in India?

Ans: The majority of operators are our clients, including BSNL, Tata, Reliance and Bharti Airtel.


Q8. What is the revenue generated from the Indian operations?

Ans: Since we are listed on Nasdaq, an India-specific number is not available.


Q9. How well geared are you to cash on the demand for infrastructure for MNP?

Ans: Tekelec has number portability solutions with 84 operators in 31 countries, from our signaling successes in so many global service providers.  We also have multiple trials of MNP technology in India, and are prepared to meet operators’ number portability needs.


Our technology provides MNP for voice, SMS, MMS and pre-paid calls, and covers GSM, CDMA, fixed networks, and cable, as well as intra-carrier number retention. 


Q10. What is the new technology or solution the industry can expect from Tekelec in future?

Ans:  Our heritage is the core SS7 platform, and our evolution will be to meet the new challenges of next-generation networks. Hence, SIP and monitoring of next-generation networks are the natural growth of our product portfolio, in line with the evolution of our customers’ networks.


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