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The broadband wireless radios market in India was in a topsy turvy state during the last fiscal. New players took over as leaders while the erstwhile leaders got either acquired or relegated to lower positions.

Due to a stagnant market, the industry slowed down and registered a very marginal growth. While the market for broadband wireless radio equipment was worth Rs 94 crore in the previous fiscal, fiscal 2002–03 saw a nearly flat growth. All the players put together could do a business valued at Rs 95 crore.

The market stagnation was mainly due to a dull ISP segment but also due to a host of restructuring exercises that took place among the players. The ISPs, who were clearly the main drivers of growth during the previous fiscal, did not account for as much business as they did in the previous fiscal.

The most significant development was that the focus clearly shifted to captive deployments by large enterprises. Earlier, microwaves were being used as the last-mile connectivity for service providers.

The big new deployers of broadband wireless radio equipment among enterprises were banks like PNB and Bank of Punjab, and media companies like Star News, NDTV, Hindustan Times, Radio City, Radio Mirchi, Mid Day, and Sun FM. The need for radios has not diminished despite the large amount of new optical fibers laid by integrated private service providers and the already laid capacities of incumbent operators.

While it is quite clear that optical fiber gives unparalleled bandwidth capacity and quality of service, optical fiber links are not available in all places, including the cities. Leased lines, especially in remote towns and smaller cities are pretty poor in quality, with often less than 80 percent uptime. In such a scenario, radios never lost their utility of a good reliable link that can be set up in quick time.

There is no doubt that enterprises today need networks everywhere. And they need it today. Banks like PNB are present in hundreds of cities. In each city, they want an ATM or a branch to be connected to the corporate network, so that real-time transactions are enabled. While PNB may look at optical fiber links in the cities where they are available, what does it do in other cities and towns? It sets up the network primarily using wireless equipment.

Although new wireless broadband ISPs did not come up to the extent that they did in the previous fiscal, established service providers like Satyam Infoway, Data Access, Primus, Tata Teleservices, VSNL, Net4India and Titan Broadband (now acquired by Reliance Infocomm) continued to add several hundreds of subscribers using the wireless radio as the last-mile medium. Wireless customers of these companies included large call centers, multinationals, IT companies and financial institutes.

Benefiting out of this consumption of radio equipment for both captive networks as well as last-mile access were a motley group of niche market players and well-known networking vendors.

V&D estimates CyberMedia Research

During the fiscal, Cisco Systems was the biggest surprise. Its wireless focus got rewarded adequately with large projects such as PNB—one of the largest deals during the year, valued at Rs 75 crore, most of which would be realized during the ensuing and following fiscals. With such windfalls, Cisco was able to grab the No. 1 position in the segment, with a market share of 31 percent. Proxim, a relatively new player in India also did well, taking the second position. It was helped by the installed base of last year’s market leader, Western Multiplex, which it acquired. P-Com and UC Wireless, which have been major players in the space for the last few years, did not have a good time during the last fiscal. P-Com was out of the reckoning, while UC Wireless got acquired by Wi-Lan, which ranks fifth here.

Trends
n Industry: The broadband wireless radio equipment market was full of global acquisitions in the fiscal 2002–03. This unsettled the look of the industry in India too. Those companies that underwent transition, suffered in the process. Tropicana, the star performer for UC Wireless, and Linkquest, the representative of P-Com, were the major casualties. It will take time for them to reorganize themselves. On the other hand, Tulip was mainly responsible for the strong showing of both Cisco Systems and Proxim. The difference between Tulip and the rest was that not only did the former specialize on wireless radios, it also focused on honing up its skills to provide a total networking solution. A case in point is its ongoing effort to attain Cisco’s Gold Partner status.

V&D estimates CyberMedia Research

n Easier Licences: One of the biggest achievement of the industry during the last fiscal was that the government took a forward-looking step to ease regulations over wireless deployments. Today, for non-controversial frequencies, it hardly takes a few lakh rupees for an initial licence and just a few thousand rupees for every additional site. This relaxation is likely to further push the number of wireless equipment deployments.

n Prices: The radio equipment space was a competitive one, with a large number of players being present in the field. Depending on the frequencies in which the radios operate, the cost of a radio link can vary from anywhere around Rs 1 lakh per link in the case of low-end radios to more than Rs 50 lakh in the case of high-end radios. Deployments of radios also involve radio masts, antennas, and other accessories, which take the costs further up.

Forecast
Wireless radio equipment have been there for some time. But this industry has still been in its infancy due to a restrictive policy by the government in the past. With the relaxation in licensing norms, it is expected that the real growth of the industry will be witnessed in the ongoing fiscal.

Already, one is seeing some huge projects underway in the form of banks, media companies and service providers. Now, even the big incumbents are seeing a potential in this new media. BSNL is expected to go in for LMDS in a major way, starting with deployments in the major commercial cities in the first leg and then spreading out to the rest of the cities across the country in the second leg.

The broadband wireless radio industry could be on way to seeing much healthier years in terms of revenue generation. The booked orders are swelling up and more are likely in the pipeline. Voice&data estimates the market for broadband wireless equipment to grow over 50 percent to touch a revenue of Rs 150 crore in the current fiscal.

Nareshchandra Laishram