Fujitsu ups telecom investment focus in South America

Japanese IT and technology group Fujitsu is stepping up its investment focus on the telecom business in South America to seize opportunities mainly with second tier carriers and neutral networks.

"The year of 2022 marks the beginning of the implementation of Fujitsu's business strategy for 5G in Brazil and South America," Alex Takaoka, Fujitsu's head of customer engagement for South America, told BNamericas.

Fujitsu's main segment in the region, where it has been present since 1983, is products for datacenters and it boasts large contracts in the storage segment.

The company is now vying for a slice of the emerging segment of open RAN, as well as optical products. This telecom-focused strategy starts with Brazil, which accounts for 50% of Fujitsu's operations in the region, said Takaoka.

“We begin focusing on products for fiber optic networks, on transponders. V.tal, for example, is one of my targets for next year.”

Fujitsu has long been a supplier of storage and datacenter servers to Brazilian operator Oi. Takaoka hopes to replicate this business relationship with V.tal, which is a fiber JV between Oi and funds linked to BTG Pactual.

After the sale of Oi's datacenters to Piemonte Holding (Elea Digital) in 2020, Fujitsu managed to retain the servers and storage contracts with the new owners, he said.

Bradesco, Sicoob, Claro Brasil and Sabesp are other clients of Fujitsu's servers and storage products in Brazil.

In the internet service provider (ISP) segment, the company inked a contract with Desktop, one of the largest ISPs in the country, and also with HNet. 

Both have become clients of DWDM optical transponders. Takaoaka said the goal is to increase sales to other second tier players and next year target carriers in the first tier, including V.tal, Claro and Vivo.

By betting on DWDM optical transmission products, Fujitsu enters an arena occupied by players such as Ciena, Padtec and Huawei. 

“We've started to bother them a lot lately,” he said.

Another 2023 goal in the telecom strategy is to bring wireless communication equipment, radio and 5G open RAN communication system to the region. 

SOUTH AMERICA

After strengthening the telecom business in Brazil, Fujitsu plans to take the strategy to its other main markets in South America: Colombia, Chile and Argentina. The firm also has a few customers in Peru, Ecuador and Bolivia.

In these markets, the business is still very much focused on datacenter products. 

The largest Colombian clients include local bank Davivienda, retailer Grupo Éxito and the army. 

Colombia is a market that has grown strongly for the company and it has recently outperformed Chile, said Takaoka. 

In Chile, the main customers are beverage group CCU and payment acquiring firm Transbank. At CCU, the company offers servers supporting invoicing and logistics, and at Transbank the servers support card payment transactions.

In Argentina, due to import restrictions, Fujitsu operates more in the services segment than in the products sphere. Among the main customers are carmakers Honda and Toyota.

For Honda, Fujitsu provides managed services, while for Toyota it supports production and logistics applications on the factory floor.

After Brazil, Takaoka said he plans to take the optical solutions to the other three priority markets, starting with Colombia in April 2023, followed by Chile.

In Argentina, the process hinges on being able to close favorable conditions for imports with local distributors, he added.

In private networks, Fujitsu sees potential in industrial hubs, manufacturing companies, agribusiness and offshore drilling firms, although it has no project or pilot yet in development.

OPEN RAN

Another regional bet is the supply of systems for operators in the open RAN model.

In the US, the company already supplies radio systems to Dish, in partnership with Nokia, as well as with other integrators and vendors, including NEC, Mavenir and AWS. 

Takaoka said it was Fujitsu that structured the open RAN project together with Dish and then included the other suppliers.

The open RAN push also starts in Brazil. Fujitsu has already responded positively to requests for quotations from Brazilian operators for proofs of concept and is in conversations with partners for the open RAN ecosystem, not limited to NEC, Mavenir or AWS, said Takaoka.

The company's challenge in this segment will be to compete with products that are assembled in Brazil.

Fujitsu is also betting on a virtualized RAN solution, or vRAN, to manage edge computing deployments. 

“This virtualization attacks precisely one of the Achilles' heels of 5G, which is high energy consumption,” said the executive.

Fujitsu's platform manages the bandwidth usage, and consequently the energy consumption, of all antennas, the virtualized servers, and other network components, depending on their consumption pattern throughout the day, he said.

This system is being piloted in the US and Japan and has already shown a reduction of up to 50% in operators’ energy consumption, according to Takaoka.

In terms of the vRAN management solution, the company competes with NEC, Mavenir and Altiostar.

Without providing figures for South America, Takaoaka said all the investments in the telecom business is part of a global plan to become a top 3 provider of network infrastructure in the medium term.

The leaders in this market are Ericsson, Huawei and Nokia.

Two years ago, Fujitsu structured a global US$5bn investment fund for expansion and acquisitions. Part of the investments for the region, including M&A deals, will come from this fund, he said.