When technology meets enterprise

Alcatel-Lucent boss turned manufacturing center into global R&D hub

Rajeev Singh-Molares says entrepreneurship is not about a business degree, but about personality. Shang Lang / for China Daily

Narrowing the digital divide is a key task outlined in the United Nations Millennium Development Goals, but Rajeev Singh-Molares believes one can be part of the solution without joining the UN.

Educated at the United Nations International School and majoring in foreign affairs at Yale University and Georgetown University, he could have had the chance to do so.

But "entrepreneurship is not about a business degree; it is about the personality and the traits you have", says the executive vice-president of communications equipment maker Alcatel-Lucent, and Asia-Pacific president of the company.

To him, the study of international affairs was coupled with the study of management. He developed a set of business skills at Yale and joined a bank in New York, where he learned the basics of balance sheets.

That landed him with a position in a business consulting firm founded by a Harvard professor, where he worked with more than 100 companies, from startups, with uncertain business models, to established companies, with tens of billions of dollars in revenues looking to redefine their models.

So, even though he was not trained as a business professional, he took the helm of Alcatel-Lucent's Asia-Pacific businesses in 2009 with a pressing task: to turn around the company that had been struggling in an industry plagued by eroding profits and rising competition from Chinese equipment makers.

Three years ago, he settled in Shanghai, a city to which he can't even recall paying his first visit. But he was impressed with the massive infrastructure upgrade across the country and, in terms of the telecommunications industry, with the rapid deployment of fixed broadband networks and the introduction of 3G services.

Although not as prevalent as it is today, Singh-Molares noticed a pickup in smart devices in Asia, an area that is home to countries with both the highest and lowest levels of Internet penetration.

He is also more aware than most of the breakneck speed of this growth in data demand. "There are at least 15 large-scale fiber network rollouts currently being carried out, and there are many more that are being planned or are under way."

Buoyed by these devices, the surge in data traffic will continue to accelerate in Asia, which is still low relative to the US and Western Europe, he says. "So operators will need to add more capacity in the core network to carry the traffic."

Singh-Molares and his team sensed the opportunities. They defined the turnaround strategy and set out a vision called "application enablement". It is based on the view that, over time, all the networks and their customers are going to move to Internet protocol.

To implement the strategy, the company relies on Bell Labs and a global research and development team to develop new products catering to the new trends in domains, such as IP, optics, services, access business and passive optical network technologies. Singh-Molares insists that to ride the telecommunications boom in China, it only makes sense for the company's China operation to move up the value chain accordingly. So he became the driving force to turn the China joint venture, Alcatel-Lucent Shanghai Bell, from a manufacturing center to a genuinely international R&D hub.

Unique to Shanghai Bell was the fact that it was co-created two decades ago with the State-owned Assets Supervision and Administration Commission. According to Singh-Molares, they need to balance the commercial realities with the requirements of the government.

As the country plans to invest 1.6 trillion yuan ($254 billion, 198.4 billion euros) in broadband network construction by 2015, Singh-Molares says he hopes to unlock the huge potential by answering the government's call and transforming Shanghai Bell into a global innovation center.

"Twenty years ago, Shanghai Bell was simply for assembly and export. We managed to do some designs here, but that is not enough apparently," he says.

Now Shanghai Bell is established in a more balanced pattern. It still serves as a sales port, but increasingly it anchors on R&D from idea forming to co-creation of new products.

Currently, some 6,000 research fellows and engineers work in innovation laboratories across key cities, including Shanghai, Beijing, Qingdao, Nanjing and Chengdu. That equals one quarter of its R&D workforce around the globe.

Leveraging on its wide range of portfolios, Singh-Molares secured two landmark contracts in the country. In May, China Telecom Corp selected Alcatel-Lucent for a 100 million euro contract to build a fiber-to-the-home network to deliver high-speed Internet access, video streaming services, and more, across the country. Alcatel-Lucent provides the cutting-edge intelligent management system for the project.

The project is a milestone in China Telecom's ambitious Broadband China, Fiber Cities' plan, which was launched at the beginning of 2011 to bring FTTH coverage to 100 million households and 30 million subscribers by 2015.

"This project highlights the rapid expansion of broadband in China. It also demonstrates our strong and growing leadership position in the FTTH market as we help accelerate the availability of super-fast broadband throughout China," he says with pride.

Another deal is to co-create with China Mobile a broadband base station solution in a smaller and more energy-efficient manner.

Singh-Molares says the deployment of 3G and 4G networks will require a lot more base stations in density to ensure receivers get a good service. But one challenge was to get planning permission to place the big, old antennae across cities.

Known as LightRadio, the palm-sized box the company invented eliminates the need for cumbersome huts at the base of cellphone towers, and packs antennae that are small enough to fix to a lamppost.

The company only picked four leading operators worldwide because a larger mass customization would be too expensive. He says they only work with big customers with unique positions in market places - and China Mobile is not just big in China, but influential globally, with 650 million customers.

Now they have invited a team of 20 China Mobile engineers to work with counterparts at Alcatel-Lucent's lab in Stuttgart, Germany. They are embarking on a cube-based radio baseband unit, pooling and defining the radio architecture. He anticipated the first batch of products will be commercially available by the end of this year.

Alcatel-Lucent ranked third in the highly competitive communications equipment market, having 13.5 percent in terms of global shipment revenue by the end of 2011, says Tian Ying, principal analyst at Gartner Inc.

It is also the world leader in the code division multiple access market by revenues, with a market share of 43.3 percent, according to data from telecommunications research firm Dell'Oro Group. CDMA is a channel access method used by various radio communication technologies.

In the Asia-Pacific market, Alcatel-Lucent competes intensively in access and optical transportation with Chinese player Huawei Technologies, which is No 1 in the region, Tian says.

"Alcatel-Lucent provides almost all the technical products carriers might need, so their advantage would be the whole range of end-to-end solutions they can offer," she says, adding that LightRadio successfully addresses the challenge of allocating 4G base stations in a denser way.

Despite the challenges, "Alcatel-Lucent responds to the dynamics of today's businesses by providing ease of use, automatic agent license increases, and by enabling agents or enterprise users to log into the contact center from any phone, either on or off the enterprise campus", a report by consulting firm Frost & Sullivan said.

As chairman of the World Economic Forum ICT Global Agenda Council, Singh-Molares works with industry colleagues to address global issues, including the challenges of digital inclusion in emerging economies, expanding broadband coverage and ensuring viable business models.

Singh-Molares' efforts are beginning to pay off. The company made a full-year profit last year, the first since the merger of Paris-based Alcatel SA and Lucent Technologies, based in Murray Hill, New Jersey, in 2006.

Revenues climbed to 15.3 billion euros. Net income reached 1.1 billion euros. The company had suffered a loss of 334 million euros just a year ago.

hewei@chinadaily.com.cn