It has been a dramatically disappointing year for the Remote Access Server (RAS) market. After registering a 385 percent growth in 1999-00, it only managed 21 percent growth, posting an annual sales of Rs 198 crore during 2000-01. The growth could have been much better if not for a better first half, during which many of the incumbent ISPs expanded their capacities.

The one big reason for the absence of expenditure on RAS was the investment crunch faced by many of the ISPs, which had taken licenses and were ready to rollout, but did not have the money to go forward. There was lack of confidence in the Internet access market among Venture Capitalists (VCs) and other investors. One, the market for dial-up access had intensely shrinked with the entry of free ISPs, aggressiveness of VSNL/MTNL which reduced access charges to a low record, and incumbent private ISPs like Satyam, Mantra and Dishnet who had captured the potential audience to a large exent. The reported subscription growth to 3 million by the end of last fiscal did not really translate into real subscriber base, as many users used more than one ISP and their practice of delayed listing of subscribers who had shifted or finished an account. Two, there was an air of uncertainty over the telecommunications scenario in the country, which also affected the investor’s mood.

However, last year, spending did not come anywhere near to a halt. Especially, during the first half of the fiscal, many of the ISPs re-ordered RAS systems from the vendors. BSNL went all out to expand its network to almost every state capital and major district capitals of India. VSNL, Satyam Infoway, Mantra Online and Caltiger, all made large purchases during the year. In fact Mantra Online is supposed to have ordered more than 10,000 ports. Then there was also the entry of new major players like Tata ISP, HCL Infinet and Data Access. The total number of RAS ports sold during the FY 2000-01 was approximately 240,000.

Also, there was a new avenue in the wireless space, where CDMA, Wireless in Local Loop and service providers like MTNL, Tata Teleservices, Bharti Telenet, Shyam Telecom, etc., went in for data enabling a portion of their lines. In fact.

A very significant and positive trend, seen during the last fiscal, was the start of a real big RAS implementation for internal use by large organizations like L&T Netcom, ERNET and IRCOT. And, this trend is expected to pick up in the current year.

The average price per port of RAS during 2000-01 was Rs 8,000 and depended on how many ports were purchased. A bulk of last year’s purchase was also digital ports to take an E1/R2 input line instead of thirty-two separate telephone lines. On the CMTS side, one saw expansion of capacity and Point of Presence in multiple cities by cable ISPs like in2Cable, Hathway and SitiCable. New implementations in this space came from Mantra Online, Asianet, Amtek and Reliance Telecom. On the DSL front though, things were moving at a slow pace as BSNL and MTNL were not allowing unbundling of their exchange to put DSLAM for DSL access provision. However, Dishnet did go forward with its DSL services by expanding it across Chennai.

In the market place, 3Com was the leader gaining a stronghold over the top tier ISPs, and in the process dethroned Cisco from the throne of the top RAS vendors in India. It was commanding a market share of 53 percent by the end of the fiscal, in comparison to Cisco’s 25 percent market share. The nearest competitor to these two companies was Nortel having only 8 percent of the market. However, with more action likely in the broadband space, the Remote Access Concentrator market is likely to be much bigger this year, with Unisphere already signaling its presence with the deal that it picked up by HCL Infinet.