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It was a particularly good year for the T&M industry. With the wire-line operators in the country making huge capital investments to put their network backbones in place, the demand for T&M requirement went up. Traditionally, BSNL and MTNL have been the bulk buyers. But during FY 2002–03, the two largest business houses in India, Tata and Reliance, made significant investments in T&M. Since the network build-up phase is the one where the need and investment on the T&M gear is the highest, the wired line segment procured optical and transmission test products. On the other hand, growth in the wireless segment was mostly confined to capacity augmentation and upgradation of existing networks. Network planning and management tools were bought in this space.

Market Shares
With a lot of all-round activity in the telco space, the T&M industry is estimated to have registered a 34 percent growth over the previous year. The total size of the T&M communications market was estimated to be Rs 295 crore during FY 2002–03. Apart from the service provider sector, the broadcast industry also bought T&M solutions in a big way. The defense and the PSU sectors continued to procure a good deal of T&M equipments. The estimated buying by the service providers was close to 56 percent of the total business, while that by the manufacturing and the defense sectors was 11.9 percent and 10.2 percent respectively. The broadcasting industry accounted for 7.8 percent share.

Agilent, Acterna, Tektronix, Rhode & Schwarz, and Anritsu are the top five players in the business. Together, they account for about 82 percent of the communications T&M market. Agilent is the largest T&M supplier with an estimated business of Rs 100 crore, followed by Acterna at Rs 61 crore and Tektronix at Rs 32 crore. A global T&M vendor, Agilent has a comprehensive range of solutions including spectrum analyzers, network analyzers, and antenna testers, and also offers design, network optimization, technology migration, and implementation services. While Acterna is strong in OTDRs and network analyzers, Tektronix is very strong in protocol analyzers. Acterna is focused on the optical, access, and IP space. Tektronix is the clear leader in protocol analyzers space with close to 85 percent market share.

Rhode & Schwarz and Anritsu are strong in the RF and microwave T&M equipment business. This part of the equipment business in the country has been close to Rs 130 crore. While Agilent is estimated to have 45 percent of the market share in that segment, Rhode & Schwarz and Anritsu command about 25 percent and 6 percent market share respectively.

Others in the industry—ICT, Fastech, Seven Hills, Aishwarya Telecom, and Trinity Electronics—have big customers in the government sector. ICT Electronics/Trend address the PDH, SDH, and SONET technologies, and have bagged orders for SDH analyzers, and ATM, ISDN, and DSL testing solutions. Majors like Sunrise, Nettest, and Fluke are present through distributors. For example, Fastech distributes Sunrise Telecom’s solutions and is strong on the hand-held side. Other large distributors include AIMIL, Aplab, Forbes Gokak, Meera Agencies, Scientific Mes-Tek, and VXL.

Trends and Drivers
The spending on T&M as cost of the network is dismally low in India. While globally, the cost of T&M equipment is 5–8 percent of the total network cost, in India, the figure is as low as 0.1 percent. Indications are that the T&M spend will go up in the coming years. More so because the new service providers are still in the rollout phase.

Companies are still seeing T&M investment as expenditure. However, in future, they will see it as an investment as they are required to differentiate on quality, better customer service, reliable networks, and increased productivity.

Earlier, sanctions were a major hindrance in the growth and propagation of T&M. It must be remembered here that the major suppliers of T&M equipment are global vendors, primarily those from the US. And the easing of the US sanctions since October 2001 has enabled them to sell a much broader range of products. During the sanctions phase, even the sale of an oscilloscope with 1G sample per second performance was prohibited. Post the sanctions, vendors can today sell to agencies like Aeronautical Development Establishment, the Electronics and Radar Development Establishment, Bharat Electronics, HAL, DRDO, and ISRO. Today, the clearances to supply products are accomplished in four–six weeks time. Since the easing of sanctions, major vendors from the US have got several hundred clearances for their equipment.

Another concern is the duty structure. Though some sops and concessions have been made for import of network equipment over the last couple of years, T&M equipment has had no major concessions. The duty structure is still as high as 51 percent for some products. More than the duty concessions and fiscal provisions, the T&M industry believes that there has to be a paradigm shift in the minds of the CTOs and the CEOs.

Test Instrument Categories
Network test instruments are divided into two basic categories: Physical Layer Analyzers and Higher Protocol Layer Analyzers. These categories are linked to the OSI Reference Model. Higher protocol layer analyzers can perform test and measurement across six layers of the OSI model; whereas, physical layer analyzers focus on one layer.
Physical Layer Analyzers: On the physical layer (OSI Layer 1), the instruments used to measure electrical and electronic characteristics include multimeters, cable testers, optical time domain reflectometers (OTDRs), oscilloscopes, signal level meters, and spectrum analyzers. The most important parameters measured by these instruments are line characteristics such as cable length, resistance, attenuation, crosstalk, reflections caused by connectors and terminating resistors, and electromagnetic interference from external sources.
Higher Protocol Layer Analyzers: On the higher protocol layer (OSI Layer 2-7), processes are monitored and analyzed using protocol analyzers. These instruments examine frames, packets, data transfer integrity, session connections, data transformations, and application performance. There are a variety of protocol analyzers such as universal devices with special modules for different tasks, small hand-held devices, and software packages installed in high-performance network node.
Application performance is measured using software agents that simulate network use by typical applications to determine throughput and other characteristics.

As mentioned earlier, service providers were the biggest buyers of T&M equipment. They bought spectrum analyzers, network analyzers, protocol analyzers, optical time domain reflectometers (OTDR), optical spectrum analyzers (OSA) and plesiochronous digital hierarchy and synchronous digital hierarchy (PDH/SDH) analyzers and handheld testers. BSNL and MTNL were the big customers and they will continue to remain too. During FY 2002–03, the new basic service providers and the ILD and DLD operators helped promote the case of the T&M industry. Reliance was one of the biggest buyers. It is estimated to have invested about $15 million on test, monitoring, and management equipment. Bharti’s investment is estimated to be $5 million and that of Tata, around $3 million. Most of the large vendors have had significant wins.

Besides operators, the broadcasting players have also been procuring T&M equipment. This has been facilitated following the government’s open-sky policy and the permission to uplink out of India. Prasar Bharti has invested in DVB terrestrial systems and in converting their old analog to digital. Star, Sahara, Sun, and Eenadu have also invested significantly. This sector alone has invested close to Rs 23 crore during the year. Several software and hardware companies like Federal and Wizworks are developing products like cable TV modems and are buying T&M equipment. Tektronix is a clear leader and is estimated to have 90 percent share of the market.

The telecom segment will be the most promising for T&M vendors for a couple of reasons. One, with the deregulation, the number of operators is increasing as well as maturing. Further, the thrust today is on teledensity. As a result, the emphasis will now be on quality of services. So the potential market for T&M equipment is likely to scale up. The signs are potent now.

Before deregulation, T&M vendors were totally dependent on the government type of projects. Primarily, the L1 business dominated the T&M equipment. It meant bulk purchase of hardware where vendors had no choice but to quote the lowest.

Things have changed now after the entry of the private sector and corporatization of BSNL. There has been rationalization in procurement.

Another noticeable trend is in solutions. The large vendors are pushing solutions rather than boxes. Even oscilloscopes are being sold with solutions built around them. Tektronix has sold such solutions. Similarly, Acterna is talking about test and management solutions. And this solutions approach will gain further ground.

This is just the beginning for the T&M industry. The communications industry has had to transform to adapt to new economic realities. These changes have consequently affected the industry structure as well as the telecom network architecture. Service providers must create new profitable data services to replace declining voice revenues. Equipment and component manufacturers must develop a new generation of products that dramatically reduce the cost of running networks (cost per managed bit), and increase the return on investments made in the deployment, build-out and upgradation of networks. With things becoming clearer, the belief is that the likes of Bharti, Tata, Reliance, and Hutchison, and those like GAIL and Power Grid are all there here for long innings. Service providers, in future, will focus on their core businesses and leave the T&M
operations for T&M companies. With 2.5G services likely to be rolled out and CDMA platforms growing, the opportunity for vendors will grow too. Further, those working in the next generation wireless development, like Sasken, Wipro, Axes, Ubnetics, and Future Software, will also need T&M solutions.

In 1998, only 20 percent of IP traffic stayed in the metro network, while 80 percent was in the core. It is predicted that by 2005, 90 percent of IP traffic will remain in the metro. Typical applications include storage area networks dedicated to providing and managing information storage and backup for businesses and VPNs, which provide secure site-to-site Ethernet connections over the public telephone. As user demand for both bandwidth and capacity of core networks increase exponentially, MANs are in danger of becoming the bottlenecks, preventing the deployment of promising new commercial Internet applications. Service providers and equipment manufacturers are in the process of developing and enhancing MAN infrastructure that would allow scalable, flexible, transparent and customized bandwidth services.

Networking technologies are penetrating new segments within the enterprise. Server-clustering network technologies help enterprises share computing power across multiple servers and optimize computing resources. Storage networks contribute to building scalable capacity while controlling operational costs and maximizing security. The impact of these new forces goes beyond the enterprise world and represents emerging opportunities for services providers (business continuance, disaster recovery, security, etc.). These new technologies are driving the need for new T&M solutions.

Today, after oscilloscopes, spectrum analyzer and network analyzer are becoming general-purpose test and measurement instruments. Some of the other hot selling products include router testers, SAN testers, parallel bit error ratio test platform, optical spectrum analyzer (OSA), multifunction E1 and SDH testers for BERT, and network synchronization (clock slip) measurements protocol analyzers. OTDRs, communications signal analyzers, network management systems, waveform monitors, logic analyzers, signal sources, and MPEG video test systems are also in good demand. While most of the vendors are box suppliers with the solution approach, National Instruments provides tools to build solutions for test, measurement and automation. The usage of these tools is across different industries.

Technology Options
This is one sector that has to be always ahead of the emerging technology trends. Be it in the semiconductor or the manufacturing or the service provider segment, T&M products have to be ahead or on par with the emerging industry standards, as they have to facilitate the deployments.

Take for example wireless: Everyone knows that 3G is in trials or is getting deployed in some places. Now for the deployment of the 3G networks, the service providers will look for the latest test equipment from the T&M vendors to allow them to define and manage their networks.

Similarly, the 3G phone makers would require test equipment in their manufacturing processes. So players like Agilent, Acterna, and Tekronix have products that facilitate the services and manufacturing. The products that would be used in communications sectors like the testers, simulators, and analyzers have to be in consonance with the latest developments in ATM, bit-error-rate, cable (metal and optical), DSL, Frame Relay, ISDN, modems, MPEG, SDH/PDH/SONET, voice over packet, RF/microwave, and optical, among other things.

n Analyzers: Spectrum analyzers and network analyzers have been the next common general-purpose test and measurement instruments after oscilloscopes. The spectrum analyzer sketches a signal in the frequency domain like an oscilloscope, which sketches a signal in the time domain. Spectrum analyzers plot the voltage for each frequency component of the signal. An oscilloscope plots instantaneous voltage of a signal versus time. Spectrum analyzers can measure frequency, power, harmonic content, modulation, spurious, and noise. But it is being transformed as an application-specific tester. Most of the Spectrum Analyzers required are below 4GHz.

Network analyzers are used to watch a wide variety of devices, from components and materials to circuits, equipment, assemblies, and systems. It measures the transmission and reflection characteristics of linear circuit networks.

There are two main types of network analyzers—scalar and vector. The scalar network analyzers measure only the amplitude portion of the S-parameters resulting in measurements such as transmission gain and loss, return loss, and standing wave ratios (SWR). Vector network analyzer measures and also shows the complete amplitude and phase characteristics of an electrical network. The shift is in favor of vector network analyzers.

n Newer Solutions: Advances in communications technologies have led to test equipment that can evaluate new emerging standards. So there has been upgradation in the modulation and demodulation techniques is areas like GSM and CDMA.

These features have been incorporated in signal analyzers too. Need for greater capacity and faster throughput has let to creation of different testing parameters. For example, vendors are today prepared to test 80 gigs too.

n Change, the Only Common Factor: Take a basic time-domain tool like an oscilloscope. For today’s mixed signal applications the engineers require mixed signal oscilloscopes to view and trouble shoot analog and digital parts of the circuit simultaneously.

Today, spectrum analyzers are no longer simple frequency domain instruments. They come with application personalities to solve the format specific measurement problems like GSM, CDMA, and 3G. A data tool like logic analyzer has to provide deeper insight and solve the signal integrity problems through higher-level abstraction of data.

n A Management Solution: In the last couple of years, T&M has moved from being a hardware product to a software solution. Today, it is more about a management solution.

Ch. Srinivas Rao