* AT&T, Equant, Infonet report strong sales of IP VPN services in India
AT&T, Equant and Infonet are among the ISPs reporting strong sales of IP VPN services in India in 2004.
As multinational corporations expand their manufacturing, customer service and sales operations in India, they’re also extending their networks and adding bandwidth. In addition, India-based companies are looking to build regional or global networks with the help of top-tier ISPs.
These trends combine to make India one of the hottest emerging markets for IP services.
“The Asia Pacific region as a whole is AT&T’s fastest-growing region worldwide,” says Greg Brutus, regional PR director for AT&T Asia Pacific Group. “We recorded 15% growth in 2003 compared with 2002, and our revenue grew by around 20% in the first half of 2004.”
AT&T says its revenue in India will show a 20% increase in 2004.
AT&T has nodes in its global IP network in New Delhi, Mumbai and Bangalore, and it is investing in a fourth node in Chennai. “We partner predominantly with VSNL [Indian carrier Videsh Sanchar Nigham Limited] to offer our full suite of MPLS-based managed IP services,” Brutus says.
While most of the growth in IP services in India is from U.S., European and Asian multinational corporations, the top global ISPs are starting to see interest from domestic companies. AT&T, for example, recently won a contract from Bank of India with partner IBM that involves providing WAN services to link 17 sites worldwide.
“Initially growth in both [India and China] has been led by U.S. and other foreign multinationals coming into the markets,” Brutus says. “While they continue to account for a large proportion of the growth, we are encouraged to see a growing number of domestic companies that are turning to us for regional or global network support as they expand internationally.”
Similarly, Equant is seeing increased demand for IP services from the 210 multinational corporations it supports in India. Equant has four major network nodes in India: New Delhi, Mumbai, Chennai and Bangalore.
Equant runs three networks in India. It operates a frame-relay network for SITA, an aviation industry consortium. It also has a legacy network with VSNL, and it has its own IP VPN. Where Equant sees real growth is in sales of its IP VPN services.
“We have our own ISP license in India,” says Lisa LaBonville, head of emerging markets at Equant. “We are located in carrier-neutral sites, which gives us the ability to access multiple local loop providers. It’s a huge advantage for our customers for network diversity and cost.”
In India, the demand for IP services that Equant and other ISPs see is coming primarily from existing customers that are increasing their bandwidth and adding new services rather than from companies entering the Indian marketplace.
“In China, our customer growth has been phenomenal. Also in China, customers that used us for one connection are now expanding their networks,” LaBonville says. “What we see in India is not so much growth in customer size, but we see our customers expanding their operations.”
Infonet is newer to India than Equant or AT&T, but it is seeing dramatic growth in sales. Infonet has a partnership with a local Indian service provider, i2i, and it uses available long-distance and local carriers in India to provide last-mile access to its customers.
“In the 18 months since it started operations, Infonet India has grown from zero to 200 customers,” Infonet said in a statement. “At present, the company is seeing in excess of 100% growth year-on-year.”
In October, Infonet announced expanded services in India, including new nodes in Bangalore and New Delhi. Infonet also announced the availability of call center and videoconferencing services in the region.
Infonet is targeting both Indian-based multinationals as well as foreign companies doing business in India. Currently, Infonet says it has more international customers than domestic customers, but it says its new customers are split evenly between the two camps.
“Infonet is enjoying particular success in India’s financial sector, where more than 34 institutions have chosen Infonet,” the company says. Its most popular services in India are MPLS-based VPNs, multimedia transport, remote access and Internet services.
ISPs agree that in both India and China corporate customers want MPLS-based VPN services.
“IP VPN is definitely our best performing service across the region,” Brutus says. “Many of our customers are seeing the benefits of an MPLS network with added security, flexibility and value. We are also seeing growing demand for other services, including security, connectivity and remote access.”
ISPs are bullish on India and China remaining hot markets in 2005.
“We can’t give any business forecasts, but we are confident that these two markets should continue to grow strongly based on current trends and independent or industry data,” Brutus says.
