The telecommunications market in India has tremendous potential, and there is no communications equipment maker in the world which is not increasing its presence there at this time, ahead of the era of 3G cellular communications. That technology is still not available for hundreds of millions of customers there.
It must be understood that this is a country where wired broadband, such as ADSL, is almost non-existent, because of a lack of appropriate infrastructure. So surfing over cellular communications seems to be the only solution for hundreds of millions who thirst for online information.
It is only now that frequencies are beginning to be allocated, and the networks are being laid out, and it will take over a decade.
The market is beckoning as well to all the Israeli equipment firms, such as Ceragon Networks Ltd. (Nasdaq: CRNT), which has been conducting big business there for many years already. Alvarion Ltd. (Nasdaq: ALVR), which has been in a tough situation in recent years, has been waiting for years already for giant WiMAX contracts from the state's BSNL telephone giant. Those deals would stop Alvarion's decline and possibly return it to the path of growth and profitability.
Orckit Communications Ltd. (Nasdaq: ORCT), which was involved for many years almost exclusively with Japan, succeeded at the end of 2009 to gain wins worth millions of dollars through two separate OEM suppliers for BSNL's NGN network. Recently, because of the huge potential, it appointed a local manager who came from Nokia (NOK), a person who is very well known there.
All of India's potential has been frozen in place, for all companies, since the beginning of the year, when the government halted imports due to concern that communications equipment from China, which was imported in recent years to India, carries military information which may fall into enemy hands.
It is only now that the freeze has been thawed for everyone, after the Chinese apparently agreed to leave the software codes with trustees in India.
So Ceragon's big customers, like Tata Teleservices, have already been allowed to renew orders with China, and, I believe, in the near future with Ceragon too. According to up-to-date information from there, restrictions were lifted for BSNL as well - which, in my opinion, will soon lead to a renewed stream of orders for Orckit, which at the same time also received BSNL's special standard, without which the deliveries already made, worth about $4 million, weren't paid or recognized.
Published by Globes [online], Israel business news - www.globes-online.com - on August 24, 2010; Reprinted on Seeking Alpha with permission © Copyright of Globes Publisher Itonut (1983) Ltd. 2010