Molex has clocked revenues of Rs 98 in FY 2007-08, registering a growth of 40% over the last fiscal. In 2007, it clocked revenues of Rs 70 crore, which was up 84.2% from the previous year. The first key order it bagged was from Tata Motors, Uttarakhand for which a 1,200 outlet Cat 6 with over 40 km of fiber was installed. A 20,000 outlet Cat 6 was deployed for HCL.

Another key order involving intelligent infrastructure management (IIM) solution incorporating Cat 6 over 70 km of fiber and over 40,000 software ports was bagged from Bhilai Steel Plant. It aspires to improve its market share in India by securing and retaining its major clients in key vertical markets.

The middle order companies and new entrants seem to be quite exuberant and excited about the growth prospects as they have registered phenomenal growth rates. Switzerland-based Reichle & De-Massari (R&M) India following its strong growth in the Indian market, the Swiss company opened an Indian liaison office in Bangalore. It also opened a training center for partners and end users. R&M India bagged plum orders from IBM, Standard Chartered Bank, and Tech Mahindra in the fiscal.

TVS has been doing major projects including work on four major international airports across India for the company. For the kind of phenomenal growth it registered in the fiscal, no wonder the company aspires to occupy a comfortable position in the top order in the Indian cabling industry. The company claims that quality in structured cabling products and forty-six years of industry experience in the field has facilitated the company in its smooth sailing in the Indian market. On the research and development front, the company invests 10% of its net sales to achieve its target of reaching the top slot.

ADC Krone has registered revenues of Rs 52.4 crore in FY 2007-08, a 45.6% increase from its revenues in the last fiscal. In FY 2006-07, it clocked revenues of Rs 36 crore from Rs 26 crore in FY 2005-06, registering a 38.5% y-o-y growth rate. Due to rising copper prices, especially when UTP solutions require a lot of copper, it has been a challenge for the company to maintain prices in long-running projects.

In this fiscal, ADC Krone bagged some of its key orders from TCS, CTS Kolkatta, and Intellinet Global. It deployed Cat 6 copper and fiber connectivity, 10G over Ethernet, and TrueNet PLM to TCS, Siruseri, Kolkatta. For CTS Kolkatta, it deployed copper and fiber connectivity solutions and intelligent cabling. The other major order was from Intellinet Global for which it installed copper and fiber connectivity solutions.

Panduit registered revenues of Rs 46 crore in FY 2007-08. Though the increase in the copper price has been an issue, Panduit has grown 100% from the last fiscal by closely working with its customers and partners to manage price corrections. To achieve a robust growth in the next fiscal too, it plans to invest in headcount expansion, infrastructure creation including customer briefing centers, channel partners, key vertical segments like IT/ITES, BFSI, telecom segments, data center solutions, and intelligent and building network automation. It invests 10% of its global sales revenues in R&D for innovative solutions and almost 40% of its global sales come from new solutions and products.

Among the new entrants, a company that registered a stupendous growth rate is Nexans Cabling. Within a short span of time, Nexans has been able to add many reputed clients to its kitty in India. The long list includes Carrefour, Gurgaon; Delhi Metro Rail Corporation, New Delhi; Allahabad Bank, Mumbai; Cambridge Technologies, Chennai; Carevoyant Technologies, Chennai; Nutrine Confectionary, Chennai; Spanish Embassy, New Delhi; Australian Broadcasting Corporation, New Delhi; Bharat Petroleum, Mumbai; Municipal Corporation of Greater Mumbai (BMC); Barco Electronics, Mumbai; BLB Publishers, Mumbai; Marvel Systems, Pune; Saint Water Communications, Bangalore; Kotak Mahindra, Mumbai; Titan Industries, Bangalore; and Airports Authority of India, Chennai.

The company is focused on offering complete solutions for any passive networking requirements of enterprises. It not only offers products and solutions but also supplementary support services like upgrading the knowledge of integrators/installers, creating awareness on specific products/technologies (passive networking) among end users, and offering design and consultancy services. Nexans believes in offering the right product mix with a required combination of Cat 6A, Cat 6, Cat 5e, fiber, etc, and the company also ensures delivery at the right time.

Sterlite India has registered a growth of about 45.2% in FY 2007-08 over the previous fiscal. It clocked revenues of Rs 45 crore in FY 2007-08 as against Rs 31 crore in FY 2006-07.

In 2008, Sterlite India claims to have expanded its capacity from approximately 160,000 boxes (of Cat 5e and Cat 6 cables) per annum to about 300,000 boxes per annum in manufacturing, making it the largest manufacturing capacity for LAN cables in India. The 45% growth was achieved by its strategic focus last year on increasing OEM sales and leveraging on the strong presence in the telecom segments. In India, Sterlite has a market share of about 18% through direct and OEM sales. In FY 2008-09, it aims to achieve Rs 90 crore, a 100% growth.

Dax Networks clocked revenues of Rs 11 crore in FY 2007-08 from Rs 10 crore in the last fiscal, registering a 10% growth rate, a notch lower than the 11% growth rate achieved in FY 2006-07. It is maintaining a moderate growth year after year. Its key deployments in 2008 have been for ELCOT, Suzlon, Knswan, Utharanjal SWAN, and GB Pant University. For Suzlon/Enarkonn, Dax designed fiber cable as per the end-user application requirement to withstand high wind velocity of 120 Kmph.

Another company that has made an impressive growth is CDT Belden, which has registered a 173.3% growth over the last fiscal. It clocked revenues of Rs 41 crore in FY 2007-08 from Rs 15 crore in the last fiscal. It expects to achieve an even higher growth rate in the ongoing fiscal, to clock Rs 115 crore in revenues.

Looking Back
The increasing price of copper has been a major cause of concern this year. It forced players to adjust their pricing. It was a tough task to keep up with this volatile state of the copper market. To beat the pricing pressure and secure profits, innovative manufacturing processes and investments in R&D are the need of the hour. Customers as well as partners understand the issues pertaining to this. Planned forecasting and close working with partners are required to manage the price corrections.

The paucity of well-trained and qualified engineers who can do quality installation is another major concern for the industry. This is especially important since quality of installation has direct impact on bandwidth delivery.

Another challenge faced by the industry is that unscrupulous local manufacturers are manufacturing poor quality copies, which cause losses for the end-user in terms of safety of equipment and personnel.

High attrition rate, high labor costs, and gray markets are also plaguing the industry. Profitability has indeed taken a beating due to the pricing pressure, which was further worsened by the upward revision of copper pricing several times during the year.

Yet another challenge has been short delivery times expected by most customers. Customers are looking at Cat 6A for data centers, Cat 6 in horizontal cabling and optical fiber backbones. While the Indian market is quite price conscious, new protocols require stringent BER (bit error ratio) and the market is looking at good quality products and value-added services, as people are looking for quality. This adds to the pressure on the players to deliver in the given environment.

Trends of the Day
We see two major trends in the international scenario that are slowly becoming obvious in the Indian context as well. These include transmitting higher data rate through copper infrastructure and using fiber. India is witnessing deployment of latest technologies like Cat 6A, Cat 7, and fiber optics along with intelligent infrastructure management (IIM) being the order of the day for data centers. There is a lot of initiative with regard to green data centers. The market potential for India is one of the best in the world and the business is growing at a good pace.

Cat 6 Rules the Roost: India is still predominantly a market for UTP solutions with about 95% of the market going for UTP at present, especially in the horizontal cabling segment. No doubt, Cat 6 continues to dominate the deployments across the verticals. While Cat 5E occupies 25% deployment and Cat 6A 2-3%, Cat 6 has dominated with a solid 70% deployment. So, undoubtedly, the dominant cabling solution across all industry verticals is Cat 6, which is almost ready to edge out the enhanced Cat 5 technology.

Cat 6A: 10 Gigabit Ethernet standard, Cat 6A market is picking up because of high bandwidth requirements. Its niche market areas are data centers and places where high-data transmission is required with mission-critical needs.

While its predecessor, Cat 6, is capable of carrying 1-250 MHz for high-end applications, Cat 6A is capable of carrying bandwidth ranging from 1-500 Mhz. So it is the cabling solution of choice in data centers and in backbone cabling. Currently, its market share is about 2-5%.

Cat 6A systems seem to have delivered their promise. Apart from supporting bandwidth-intensive application, these systems have been successfully deployed for 10G applications where distance is not a constraint. Though there has been a widespread adaptation of 10 Gigabit over UTP following its ratification by the IEEE; according to industry sources, the STP version of Cat 6A is also finding better market since it is better equipped to handle ANEXT, RFI, and EMI noise.

PLM: In the coming years, it is possible that new standards in data center cabling will include PLM. Knowledge centers, BPOs with a high number of MACs, and software development centers with data centric environments require technologies that allow IT managers to track MACs in real time while offering security, better asset management, and RoI. It helps in reducing the cost of network ownership as it is capable of solving many issues including unexpected downtime, redundant ports, inaccurate records, etc. PLM is slowly getting wider acceptance though its market share might not be huge.

With the number of large networks increasing along with the increased demand for very high bandwidth for advanced applications like videoconferencing, high-definition graphics, IP telephony, IPTV, multimedia networks, and e-commerce with both voice and data, the Indian structured cabling market is witnessing a huge demand for intelligent cabling.

Fiber Optics: The fiber optics medium has been in use for a long time and it has certain abilities that are not there in the copper medium. The limitation with the copper medium is that it does not provide high bandwidth over long distances. In campuses, between buildings and across floors of buildings, and in data centers, the better EMI properties of fiber are preferred. Fiber optics has done well in 2007 and will continue to exist as a complementary technology to copper cables.

Increased use of fiber connectivity-particularly factory terminated plug and play fiber solutions-can be attributed primarily to data center applications where density is a critical requirement. It is interesting to note that while fiber cabling is only a little more expensive than the copper cabling system, the cost of active components for fiber networks makes the entire network extremely expensive. The fiber optics market share is an estimated 5% at present.

UTP Vs STP
Undoubtedly, UTP was more in demand and will be the preferred choice in India. But with new technologies like industrial Ethernet making its way into the Indian market, the shielded share is bound to increase. STP solutions are used in shipbuilding, airports, railways, defense establishments, etc. With the advent of 10 Gigabit, clients are considering shielded solutions much more seriously as they offer a number of advantages over UTP.

The market share of UTP solutions is about 80% of the total copper needs. Thankfully, India is not facing as much interference as a few European countries are due to availability of spacious commercial spaces.

Vertical Growth
As the Indian structured cabling market continues to grow, SOHO, class B and C cities, Internet-ready housing complexes, and residential cabling are few new growth point of the market. There has been the implementation of video walls with Hi-Fi music integrated with security systems. The connectivity for this could run on a 4-pair cable. The cabling market in data centers is already seeing a rapid growth, which is currently 40% annually.

One of the key areas of business will be in data centers with the number of data centers used by enterprises on a rise. The other area is intelligent cabling. With the number of large networks increasing, there is a need for intelligent cabling for the proper management of networks.

While the IT industry is experiencing a steady growth, business verticals such as retail, education, government, and public sector undertakings are the new areas where structured cabling will see new opportunities. There are scores of new multinational entrants in retail that hold huge potential for the structured cabling business. All these new opportunities will mean increased growth rate compared to last year.

What Lies Ahead
It is expected that India and China will be the two markets in the world to experience exponential growth rates in the global structured cabling market. With increased investment in infrastructure, and being a leader in software development, India would be a strong growth market.

With booming businesses, particularly in BPOs, financial institutions, IT and ICT firms, the structured cabling market is enjoying a good time. On the other hand, SMEs and smaller corporates are also adapting to the trend and implementing structured cables in their offices for the benefits they offer to enhance business performance.

The structured cabling market will witness a sustained growth in the coming years too as in the past year. According to industry sources, the Indian structured cabling market is expected to be worth Rs 1,380 crore by 2010.

The industry feels that though India is still an attractive market, suppliers need to provide the technology and support in a proactive manner to have continued growth in the future.

The industry has to carefully look and monitor the huge unorganized sector that exists in this market. It should be able to deliver consistently with performance and provide the end-user with technologically advanced inputs. This would help monitor the growth and help leading players to address the issues faced by the end-user.

Kannan K
kannan@cybermedia.co.in