Alcatel India and the Centre for Development of Telematics have decided to set up a joint venture, thus giving shape to their one-year-old research and development alliance.
Alcatel had joined hands with the country's telecom research and development institution in April 2005 to develop broadband access technologies for the rural market.
Ravi Sharma, managing director and president south Asia, Alcatel, said: " We have set up an eight-member committee, four members from each side, to work out the modalities of the joint venture. The committee is expected to finalise a roadmap soon, and the venture is expected to be in place by the third quarter."
He refused to elaborate on Alcatel's proposed investment in the venture, or whether it would be a majority partner. "It's too early for specifics till the committee makes a decision," he said.
The proposed venture is expected to push Alcatel's WiMax technologies, which the France-based telecom infrastructure giant, sees as the future for broadband access in rural India.
Alcatel also has a technical tie-up with the Indian Telephone Industries under which ITI manufactures switching products.
More than 50 per cent of Bharat Sanchar Nigam Ltd's fixed-line and GSM network is based on Alcatel technology.
Alcatel, however, has ruled out any plans of picking up a stake in ITI. Sharma said, "We are happy with our role as a technology partner with ITI and have no plans to pick up an equity stake (in ITI)."
In line with its focus on broadband access technology, Alcatel will increase its headcount in India from around 700-plus, at present, to over 1,000 by the year-end.
"We will be increasing our R&D spend in India," Olivier Baujard, chief technology officer, Alcatel, said.
The French company had invested around $250 million in India in 2004 on research and development.
In fact, Serge Tchuruk, chairman of Alcatel, underlined the importance of India in the parent company's 2004 annual report when he stated, "This was the year of Russia, Brazil, India and West Africa, especially for mobile telecommunications."
Besides its emphasis on WiMAX and GSM infrastructure business, Alcatel is looking at alternative revenue streams in India.
"We will look at offering our virtual agri market place, currently being offered in Africa, to farmers in India," said Thierry Albrand, vice-president, Alcatel.
Alcatel, however, is unlikely to offer the service in the near future. ITC already runs a virtual agri market in India under the aegis of e-choupal.
Meanwhile, Alcatel has sold off its ailing handsets business globally to TCL, with which it had entered into a 45:55 joint venture in December 2004.
Alcatel had failed to make an impact in India, against the likes of Nokia and the Korean brands.
Sharma said: "We realised that is not possible for us to focus on the retail and infrastructure segments of the telecommunications market. Hence, we decided to exit the handsets business and focus on the infrastructure market."
