Television

Telecom equipment market grows 71%: V&D survey

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BANGALORE/MUMBAI: Powered by a strong performance from the wireless infrastructure equipment segment, the Indian telecom infrastructure equipment market recorded a growth of 71 per cent in the 2004-2005 fiscal to Rs 141.02 billion.

Wireless infrastructure equipment contributed 80 percent to this market. While enterprise equipment market grew 27 percent, the growth in mobile phone market (including GSM and CDMA) slowed down to 13 percent-largely because of the drop in CDMA phone shipments.

The findings are part of the tenth Indian telecom industry report (volume I) released by communications business magazine VOICE&DATA. This is a reversal of fortunes for the industry as the last fiscal had witnessed a market drop of 34 per cent.

According to the report, the Indian communications equipment market, including infrastructure, enterprise, end user equipment, and telecom software grew 43 percent, from Rs 278.45 billion in FY 2003-04 to Rs 398.19 billion last year. Purely equipment market size was Rs 303.76 billion in 2004-05 up from Rs 212.48 billion the previous year. Nokia emerged as the biggest equipment vendor. It was also the largest handset vendor with 55 per cent market share while LG stood a distant second with 12 percent market share.

The V&D report is based on a survey of more than 500 Indian telecom companies spanning carrier, enterprise and end user communications equipment vendors. "The performance in 2004-05 was a result of the massive expansion of networks by almost all the wireless operators including BSNL, which continued to invest heavily in its GSM rollout," VOICE&DATA editor Ibrahim Ahmad said.

Survey Highlights

Telecom infrastructure equipment market grows 71%

Enterprise networking crosses Rs 6,000 crore mark

GSM phones grow by 76%

CDMA phones drop by 61%

WLAN market grows 60%

Network security grows 37%

Network integration grows 24%

VSAT business grows by 24%

Telecom cables grow 115%

Telecom software market touches Rs 94.42 billio

Enterprise Equipment

Growing at the rate of 27 per cent, the enterprise networking (equipment and services) market crossed the Rs. 600 billion mark. Two factors played a key role in the growth of enterprise networks. One was the substantial drop in prices of client devices (PCs, laptops) and the growing ubiquity of networks, the other was the willingness among enterprises to compete at domestic and international levels. The highest growth was registered by WLAN, followed by modems and switches.

While large enterprises continued to be the major customers for most vendors, the small and medium business segment was an important focus area for all vendors. Besides the metros, growth was also driven by significant networking deployments in other tier 2 towns such as Pune, Hyderabad, and Chandigarh, the report said.

Carrier Equipment

With minimal investment in wireline, the year 2004-05 was all about wireless. However, despite a decline in wireline subscriber base, BSNL, MTNL, and Bharti bought wireline equipment. The telecom cables industry showed signs of revival with nearly 119 percent growth in FY 2004-05. While telcos focused on data and applications for enhancing their ARPU and margins, broadband emerged as the natural gainer. The market was aided by the falling equipment prices. Although the government's National Broadband Policy had nothing significant to offer, it did give momentum to the efforts by BSNL, MTNL, and VSNL. According to the report, even though European and US vendors still dominate the Indian carrier equipment market, Chinese vendors are likely to make significant gains.

Mobile Handsets

In volume terms, India witnessed a total addition of around 15.4 million handsets in FY 2004-05. GSM contributed around 79.5 per cent whereas CDMA contributed around 20.5 percent. While GSM grew around 49 per cent, CDMA saw a decline of around 44 per cent. Overall, the market has grown by around 13 per cent. GSM contributed around 84 per cent whereas CDMA contributed around 16 per cent.

The V&D100 (Volume II) for FY 2004-05, which will focus on telecom services and service providers, is slated for release in the first week of July 2005.

 

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