Sales to utilities and an increasing focus on the service sector, was the highlight.

State of the Market

As non-telecom entities like the utilities getting into communications, we have taken into account sales of all the communications-related T&M equipment, and not just sales to the telecom industry. That means a spectrum analyser sold to Indian Army or an OTDR sold to the Indian Railways are now part of our estimates.

Market Size

The total market size for communication T&M products and services is estimated to be Rs 212 crore in 1998-99. Lack of any reliable break-up makes it difficult to estimate how much was sold to communications service providers, turnkey network builders, and manufacturers. However, roughly it could be anywhere between Rs 145 crore to Rs 160 crore. Which means there has virtually been no growth in these sales. The 1997-98 figure, as estimated by Voice & Data stood at Rs 146 crore.

What Sold?

Traditional generic communication T&M equipment like spectrum analysers and signal analysers accounted for the maximum share of the Rs 212 crore market with about 20-23 percent of sales in terms of value. Surprisingly, this was followed by the sales of general measuring instruments, always thought to be low-value items. The percentage of these sales to the total market size, however, is difficult to estimate. The single largest growth in sales, both in units and value, was witnessed by OTDRs, thanks to the bulk buying by the DoT and the utilities. Another surprising finding is that the sales of specialised test sets like GSM test sets actually dropped.

Who Bought?

The year 1998-99 saw a seesaw movement of the buyers. While the sales to utilities and turnkey contractors went up, sales to defence suffered because of the US sanctions.

Within the telecom industry, the sales to value-added service providers like cellular operators and paging operators virtually reached its nadir. This was to some extent compensated by the purchases from the DoT, as it kept expanding its network. Interestingly, only VSAT service providers among private operators bought T&M equipment, though the value of those sales was very small compared to the overall market size.

Who Sold?

The highly fragmented market suffered the pressure of slowdown in the buying by private operators. So, as it invariably happens in case of slowdowns, the leaders did better. Hewlett-Packard India emerged on the top once again with a 27.6 percent marketshare, followed by Tektronix with a 10.9 percent marketshare.

Trends

• As outlined in last year’s V&D 100, the sales to utilities went up.
• T&M is increasingly moving from being a product-driven industry to a service-driven industry. While box selling gave way to solutions selling, services became an important part of the total T&M sales.
• Outsourcing by telcos started in a big way when Tata Teleservices placed an order worth Rs 3.2 crore on Hewlett-Packard for supplying equipment and maintaining network quality for the next five years.
• The Wireless Planning & Coordination (WPC) wing also went for a trend-setting tender inviting T&M companies to totally integrate a mobile van with required T&M solutions for monitoring conformance to frequency allocation by RF users. Incidentally, this order was also placed on Hewlett-Packard.

Forecast

• Utilities buying will continue to grow. So will the buying by the turnkey providers.
• For T&M suppliers, testing and quality-related services is a new opportunity. While total outsourcing by telcos and training and consultancy orders could land up with only big T&M vendors, for medium and small T&M companies the opportunity is in network audit.
• This year, by all probability, the market will grow by about 15-20 percent. This is in comparison to 1997-98 and 1998-99, when this segment registered single digit growth.