Nortel & Airtel Foray Partnership into SMBs

by Sonal Desai    May 11, 2007

Nortel is using private telecom operators to increase its reach to the Indian Small and Medium Businesses (SMBs). It recently signed a five year contract with Bharati Airtel to host contact centers for Airtel subscribers.

This partnership also marks Bharati Airtel’s first partnership from the broadband and telephone services into SMB space. The companies are scouting a bank to partner with, in the project.

According to an Airtel spokesperson, the company’s tie-up with Nortel is part of an endeavor to foster a partner ecosystem for a gamut of hi-tech products, for the growing SMB space. Before the tie up, Airtel was servicing the SMB space through three different business units namely - Mobility, Enterprise and Broadband & Telephone. Now, with the tie up it will be offering a one - stop shop, with converged solutions to the SMB space.

Airtel will provide a combination of IT and Telecom solutions including fixed line, mobile, broadband, long distance and data, and managed services across the top seven cities in the country. Nortel will create a network operations center in New Delhi and provide network design, integration, support and maintenance to Airtel.

E.R. Ashok Kumar, director (SMB) of Nortel discloses, “The project will enable SMBs, who do not want to make a one time payment, an option to directly deposit the money in the bank, in the form of monthly installments. The installments will be formatted like bills.”

He explains, “Normally, SMBs follow an Opex model. This option would enable Indian SMBs to embrace a better technology with payment option.”

The companies will adopt a go to market strategy either through channel partners or direct sales.

Elaborating on the reasons for an organization to opt for the joint product, he states, “Our solutions are cost effective compared with the investments one has to make in PBX. Organizations have to pay Rs.100 per port, and for example, if they use 400 ports, the bill would only amount to Rs.40,000 as against the lakhs of rupees invested in a traditional system.”

SMBs today are looking at total cost of ownership, and this partnership offers them that scope. The products will enable them retain customer loyalty and prevent churn.

Airtel and Nortel are already running beta trials in Bangalore and Delhi.

Kumar confirms beta trials, and says that Nortel is looking at the deal from a horizontal growth perspective. He however, does not divulge any more details and states, “It will take us at least two months to make a formal announcement.”

Nortel will leverage its acquisition of Tasman (January 2006) for the project. The company’s R&D team in Bangalore is developing routers around Tasman technology. These routers will be supplied for the Airtel project.

Airtel, meanwhile, will leverage its tie-up with Singtel and its presence in the International Long Distance (ILD) scenario, as also of its enterprise services arm B2B, whose Carrier- and Corporate complete telecom requirements such as mobile, fixed-line, data, Internet and VSAT.

Besides, it owns the world’s largest 8.4 tbps capacity submarine cable system- Network i2i and is also the largest consortium partner in SeMeW4, giving presence on both Atlantic and Pacific Routes. It provides GSM mobile network to 23 circles across India.

A 24×7 voice portal based on Nortel’s Interactive Voice Response (IVR) solution will be the cornerstone of Bharati’s new contact centre operation. Once the project is implemented, Airtel users can dial a single number from anywhere in India, to be able to speak in English, Hindi, or four other regional languages to complete routine transactions and subscribe to new services while the system interacts with them in a natural, conversational manner.

Kumar adds that Nortel is in talks with other telecom service providers, but cannot issue a committed statement since the talks are still at a negotiation stage.

The Airtel spokesperson concludes, “Our partnership with Nortel will see us leverage our respective national distribution networks and ride on each other’s distribution channels to offer SMBs a basket of solutions that pack the converged power of voice, data and security features. By bundling equipment solutions with connectivity products, we propose to provide a final affordable product to SMBs under a one-stop shop. We will convert the capex cost of the bundled equipment into an opex cost. This is in line with our strategy to focus, for the next five years, on this fast-growing space.”