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India is fast turning into a 'dream destination' for most multinational companies across a wide gamut of industries: IT services, BPOs, telecom, banking and finance, manufacturing, automobile and retail verticals. And to help them spin threads of success are present the vital backbone partners-the structured cabling vendors.

In FY 2005-06, the structured cabling industry revenues jumped to Rs 574 crore*, a whopping 76% growth in last two fiscals. (Structured cabling market revenue in India was Rs 325.5 crore  in FY 2003-04 and Rs 416 crore in FY 2004-05*).

As connectivity boom is unleashing in India, the structured cabling vendors have upped the ante in the fiercely competitive market. The warpath is open for the vendors where newer technologies are being introduced to woo customers; each offering unique value proposition, driving forward to consolidate current position. 

Barring a few glitches owing to international copper price hike, the industry is keenly tracking the movements of MNC giants in India and the emergence of plenty money-raking business opportunities.

Striking on Hot Iron
The technology scenario in India has caught the attention of companies and investors at a time when analysts believe India is ready to leapfrog to the next stage of technology revolution rather than follow the natural evolution pathway. The platter of emerging technologies is simmering hot in India. And there are enough reasons for it.

“India has always been an early adopter of technology,” remarks Dr Ispran Kandaswamy, VP and managing director of Asia Pacific, Systimax Solutions.

 VoIP tops the list of technology boom waiting in the wings. The evidence is on ground as both PC LAN networking and VoIP are being installed simultaneously, in most new cabling installations. Past issues of quality, security, etc. have been resolved. Cable for VoIP applications is predicted to account for the major UTP cable market in next five years. Besides this, there is a growing trend towards interoperability and providing higher security to the user as well.

India is extremely bandwidth hungry. KK Shetty, director, Sales, India & SAARC, Tyco Electronics feels the time is ripe to introduce emerging technologies and latest products in India that spur the high bandwidth demand. “In a matter of 3-4 years, we shall see more of integrated SCS networks where PoE, intelligent cabling and normal cabling standards will all converge to provide a real intelligent system,” he states optimistically.

Melting Pot of Opportunities
Here's some food for thought –

• India is the second fastest growing economy in the world
• Over the next five years, more than $150 bn will be invested in infrastructure
• The BPO sector has been growing at 60-70% annually and is projected to reach $12.3 bn by 2006, and by 2008 it is expected to reach $21-24 bn (NASSCOM estimates)

More such statistics are testament of the rising mercury of opportunities in India. K Surendar, country manager, Dax Networks comments, “As BPO sector in India is booming, we are seeing the number of nodes in an average network site going up to 7,000, from just 100-800 nodes last year. This spells good business for infrastructure providers.”

Milind Tamhane, VP, Manufacturing, D-Link India is excited to see the spurred infrastructure growth. “We are witnessing the huge expansion of infrastructure, more correctly so, planned infrastructure growth in commercial as well as residential domains; both are direct indicatives of SCS Industry growth,” he adds.

Spelling out the dominating trends seen in India, Peter Karlsson, senior VP, Enterprise Solutions, CommScope believes there are three main trends affecting structured cabling business today. “Firstly, the fact that India is the fastest growing market in the world today for every business vertical. Secondly, globalization is bringing several MNCs, to India and likewise many Indian companies are expanding outside. And lastly, it is the consolidation of businesses that is leading to decentralization. As a result, many data centers are mushrooming. All this augurs well for structured cabling market in India.”

Data Center At The Epicenter
The industry witnessed stagnation in the historic growth of LAN data communications market for structured cabling systems. However, one prolific area where structured cabling is expanding horizontally is the data center. This new niche market is fast developing and can provide renewed growth for structured cabling system suppliers.

According to a new study from FTM Consulting, data center cabling is a new developing growth market for both the fiber and the copper SCS suppliers worldwide. The global data center cabling market is poised to grow from $680.9 mn in 2006, at an average growth rate of 26.8%, to $2,235.1 mn by 2011.

Banking, financial services and insurance (BFSI) sector, BPOs and telecom companies are sharply focusing on wiring up all their branches and manage data centers. Dileep Kumar, enterprise product manager, ADC Krone opines, “Many data centers driven companies are leaving no shortfalls in getting their networks up to global standards and implementing the best infrastructure solutions. As a result, more and more cabling vendors are offering unique end-to-end solutions tailor made for data centers.”

Cat5e and Cat6 are still the dominating cabling standards in India

Cabling Choices Galore!
Compared to 2003, the portfolio of cabling vendors in India has grown multifold. Customers are looking beyond Cat5e and replacing traditional choices with the more mature Cat6 and Cat6A. A few bold customers are going for Cat7 and fiber solutions especially in the BFSI and ITeS verticals.

Trends show a surge in demand for CAT6 and CAT6A as 10Gigabit Ethernet (10GE) cabling products swell in demand, slow but steadily. Power over Ethernet (PoE) and Intelligent Cabling are the 'new kids on the block' that have enthused the cabling industry in India.

For now Cat5e and Cat6 are still selling like hot cakes, and it will take 3-4 years before Cat6A and intelligent cabling will rub the sheen off Cat5e in India. Kumar Natarajan, regional director, India, Panduit notes that the dominance of Cat5e will not fade away soon. “Most of the market requirements will be met by CAT5e and CAT6 in India. Very few customers face the demand for high-speed bandwidths and so the volume for CAT6A will be very low to start with this year,” he says.

Initial deployments of 10GE over UTP were seen in data centers especially in IT/ITeS, BFSI; storage area networks and for building robust backbones. Dileep notes a change in that trend with the standards ratification. “Now one can expect 10G Base-T UTP cabling system finding a place in emerging areas like enterprise campuses, health, manufacturing and government institutions where width and depth of the network is crucial and have to be future-proof ready,” he notes.

"SCS consumption within a network is 7-8% of the outlay. So the effective impact of copper price hike is minimal" -Milind Tamhane, VP, Manufacturing, D-Link India

Over the next five years, the key growth drivers for data centers, and for cabling, will be increased centralization of databases and computing resources

"In a matter of 3-4 years, we shall have more integrated SCS networks where PoE, intelligent cabling and normal cabling standards will all converge" -K K Shetty, director, Sales, India & SAARC, Tyco Electronics

“Power-over-Ethernet (PoE) is gaining momentum, as there is an increase in wireless access points and deployment of VoIP in the country,” notes Rajesh Kumar, country manager, Siemon. Small vendors like BNA Technology Consulting have also made headway in implementing installations with PoE readiness. Kashi Vishweshran, director, BNA Technology Consulting adds, “The demand is likely to pick up significantly in the near future, especially with expected introduction of IP based premises services by some large ISPs.”

But with so many choices to make, how would the customers make a prudent choice? Rajesh Shenoy, key account manager, India, Belden CDT offers this advice, “A lot of time vendors go blindly by the TIA standard. They must understand that a standard is only a minimum acceptable criterion. It only gives direction. One must go for solutions with higher headroom.”

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