Ribbon expects India biz to grow on back of telcos’ 5G investments, rise in internet traffic

IP and optical networking solutions maker Ribbon Communications expects its business in India to grow strongly on the back of telecom operators’ investments into 5G and the rising internet traffic.

Ribbon has reported an 18% year-over-year increase in its sales in the India region in Q1 2023.

“Our business in India continues to gain momentum as we execute on previously announced wins with Bharti Airtel in both optical transport and IP routing as well as growth with other operators in the region, such as Tata Teleservices. Sales in India increased 18% year-over-year as we scale production of the new optical and IP products, and we had a strong quarter for new bookings, primarily for our new products,” Bruce McClelland, President, CEO & Director, Ribbon Communication said in an analyst call.

“We expect this region to continue to grow given the long-awaited investment in deploying 5G technology and the continued exponential growth in Internet traffic,” he said.

Currently, only Reliance Jio and Airtel are deploying their 5G networks. Both the telcos have ambitious plans of concluding the roll out by December 2023, and March 2024, respectively. Vodafone Idea is however yet to announce any timeline for 5G roll out.

The telcos have awarded their radio access network (RAN) deal to Swedish telecom gear maker Ericsson and Finland’s Nokia.

In December 2022, Ribbon bagged an IP Transport backhaul network expansion contract from Airtel to deploy 5G throughout the country. In February this year, the Texas-headquartered gear maker also won a long-haul DWDM network contract from the second-ranked Indian telco.

The President added that the company’s strengthened presence in India also benefits its Cloud Edge business, with several voice infrastructure deals closing in the first quarter. The company also sees a “good funnel of enterprise opportunities”.

McClelland added that the company has business with all Indian telcos, including Reliance Jio and Vodafone Idea, and in the enterprise segment with Tata Teleservices.

“They’re not at the level of business we’re doing with Bharti. And we do a mix of business in the region. Some of it’s on our IP optical portfolio, but we also have a very good presence with our Cloud and Edge business. It’s at a lower level of revenue, but it’s a higher margin, higher profitable business,” he said. “Clearly, we have ambitions to grow our share in the region.”

In the January-March quarter, Ribbon posted a 7.5% year-over-year growth in revenue at $186 million, and projected revenue target of $205-$215 million in the second quarter. It recorded a loss of $38 million in Q1 2023, though, down from the loss of $70 million in the same quarter a year ago.

Ribbon Communications has projected full-year revenue in the range of $840 million to $870 million.