NEC targets $1-b revenue from India in 5 years

Japanese tech major NEC Corporation is exploring the possibility of offering its information and communications technology (ICT) solutions to the proposed bullet train project between Mumbai and Ahmedabad. It is also expanding into the Southern and Eastern parts of India through its joint venture with Delhi Mumbai Industrial Corridor (DMICDC).

This is line with NEC Group’s larger plan to grow revenues from India to $1 billion by 2023 from the current $400 million. The company plans to focus on its three key business domains in India — public safety, logistics and transportation — to achieve this goal.

“India is now the third-biggest market in Asia-Pacific in terms of revenue. The number of NEC employees in India (6,000) is the biggest in the region,” Takashi Niino, President and CEO, NEC Corporation, told BusinessLine, on being asked where India fits in the overall global expansion plans of the company. Excerpts:

How is the overall business sentiment in India and how has ease-of-doing-business improved?

If you look at the business potential from a global perspective, India definitely has a huge potential market. Initially, we started with the iPASOLINK network (microwave communications system for mobile network infrastructure) and related business, but slowly, we have moved into DMICDC-related business, bus transportation and other new systems that we have deployed in the country. We see different business areas that we can expand into.

Just saying NEC has cutting-edge technologies wouldn’t help us in expanding the business. So, we have launched or partnered with laboratories. We have created NEC Laboratories in India and expanded into other areas; for example, we have partnered with IIT-Bombay.

What are some of the innovations NEC is currently working on?

NEC will provide India with various solutions based on 5G through our collaboration with Samsung. I am confident the joint forces will bring innovative values to India’s digitalisation.

NEC was one of the biggest chipmakers, and India is now trying to start manufacturing semiconductors. Do you think it is a feasible business today and are there any plans on this line?

Earlier, NEC was into the semiconductor space. But, right now, we don’t really have plans in this regard.

What about the incorporation of artificial intelligence, cloud technologies, and blockchain, particularly with a focus on the Indian market?

For AI, we are working on optimisation. In the joint venture with DMICDC, we are providing logistics container tracking services for 15 port terminals across India. The service now covers 70 per cent of the logistics containers in India; it will go up to 95 per cent by next year. Although many people complain that they lack proper infrastructure and logistics, the data tells another story — it’s underutilised.

In fact, we found that approximately 40 per cent of the containers are transported with nothing inside. I think this is one of the good examples of the unique challenges in India’s logistics industry. The way I see it is, people are not aware of where the resources in logistics are and where the containers are. We need to introduce some sort of optimisation that delivers the available resources to those who need them.

How have NEC’s IT solutions been used to address various social challenges?

I think one of the biggest contributions has been in the space of urban mobility. With our integrated solutions, we have come to a stage where the entire fare collection is automated — this implies ease of transaction. We have implemented nearly four bus rapid transit (BRT) projects in India, and we have made an impact both in terms of pure operational matrix and revenue generation. There has been an increase in revenue of 20-25 per cent for the operators, and they are able to save 15-20 per cent on the current costs. The ecosystem gives benefits to the operators, and the users have largely benefited in terms of seamless transit inside the city.

What are some of the India-specific challenges and how do you plan to tackle them?

We cannot bring what has been successful in Japan to India. For example, when it comes to public transportation, something like a centralised controlled traffic management system, just like the ones we have in Japan or Singapore, cannot be brought here. The MoU we just signed with IIT-Bombay is one of the ways to tackle that. As an IT company, we have good expertise in AI. However, if we want to solve social problems, we need somebody who has good insights on India. The professor we are partnering with in IIT-Bombay is one of the authorities in transportation and logistics. So, getting local expertise, added with our AI expertise, is the way forward.

Source: The Hindu