Telecom operators are “actively replacing Huawei networks in India,” says Gary Smith, chief executive officer at Ciena, a networking systems, services and software company. Smith said that Ciena has “certainly been the beneficiary” of the telecom operators replacing Huawei equipment from their networks. Further, the chief executive officer at Ciena said that the company has “seen this dynamic for a while” and that “it is clearly a multi-year tailwind” for Ciena. Smith said that Ciena continued to “navigate through COVID challenges” in India, with the company recording 48% year-on-year (YoY) and 26% year-to-date revenue growth in India.
Ciena to “Take A Little While” to Deploy Orders
Ciena on Thursday announced its third-quarter financial results with the company reporting US$988.1 million (approximately Rs 7221 crores) in revenue for the period ended July 31, 2021. In comparison, Ciena in the third quarter of the previous financial year recorded US$976.7 million (approximately Rs 7137 crores) in revenues.
“India, I would say in the last sort of six months is accelerated that move and they are actively replacing Huawei networks in India and we've certainly been the beneficiary of that,” Smith said in the third-quarter earnings call on Thursday. “We have good order flow and good new wins in India, some of which are on the back of that.”
The chief executive officer at Ciena also said “it will take a little while” for the company to “deploy” its orders.
“These things take time, and those decisions take time, and then to execute on that,” Smith said. “It's a big undertaking by the carriers, but it's underway.”
Smith earlier in the second-quarter earnings call in June also had said that Ciena witnessed a “lot of activity around the major carriers” in India “wishing” to reduce their dependence on Huawei. However, the chief executive officer at Ciena said that the company has “not yet deployed” its orders due to the COVID related challenges in India.
Ciena Took Advantage of Huawei Opportunities
Meanwhile, James Moylan, chief financial officer at Ciena on Thursday said “there are opportunities” for the company in India.
“We said earlier that India is a place which has moved very aggressively to exclude Huawei from their builds, there are opportunities for us,” Moylan said in the third-quarter earnings call on Thursday. “We have taken advantage of those opportunities.”
It has to be noted that the telecom department introduced multiple policy changes post the clashes between Chinese and Indian troops in June 2020, with the changes limiting the involvement of Chinese vendors.
Moylan said that the company expected that India would “start to show" in its "revenue stack a little higher” as compared to its previous quarters.
“That has been the case, it's not quite 5% of our revenue, but it's up very nicely year-to-date,” Moylan said. “It's (India) going to be a great place for us to be for a long time.”
In late June, Ciena announced that Bharti Airtel deployed its photonic infrastructure designs to “almost triple optic fiber network capacity for delivering a world-class 5G experience” to its users. It was said that the solutions from Ciena will enable Airtel to “fast-track 5G and support high-growth cloud applications while lowering the cost per bit.”
“I think importantly, we are seeing investment by key customers for network upgrades in India, as well as replacement of Huawei equipment,” Smith said.