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For last few years, one thing V&D 100 had to deal with was whether IP was posing any threat to TDM, when it came to carrier switching. That debate is still alive and will hopefully be kicking for a long time to come. Yet, what has stolen the limelight from IP is the spectacular growth in wireless. Wireless on IP still being a nascent idea, yet to be deployed on a large scale, TDM's future does not seem to be under any threat in the immediate future.

However, that is a big problem for a market study like ours. While all the major switching vendors in India-Alcatel, Siemens, Lucent, and Ericsson-have their wireless solutions, GSM or CDMA, the purchases by operators are always bundled in wireless and hence, finding out the exact value of switching component is not just difficult but irrelevant as well.

The wireline switching deployment coming largely from BSNL, MTNL, and Bharti-with some addition by Tata Teleservices (Maharashtra), the erstwhile Hughes Telecom-remained a small fraction of the total, with wireless deployments taking the lion's share.

BSNL deployed close to seven lakh lines, a sharp drop from 41.4 lakh lines added in the previous year (FY 2002–03) and the more than 67 lakh lines added in FY 2001–02. On the TAX front also, the addition was small. However, BSNL placed orders for close to 6.85 lakh local lines after a gap of more than a year.

Bharti added more than four lakh local lines. It also added 60,000 NLD and 20,000 ILD lines.

The per line rate of local lines continued to drop, with the figure touching Rs 2100–2200 mark, a drop from Rs 2400–2500 a year-and-half back. There was hardly any difference between the procurement rates of Bharti and BSNL. The NLD and ILD (TAX) rates were roughly about Rs 2800 per line, with ILD per line rate touching Rs 5,500 with echo cancellation equipment and the like.

All of these were standalone purchases.

While for wireline, BSNL and MTNL continued to buy switching on a standalone basis, for GSM and CDMA they followed the private operators' strategies and went for bundled solutions.

Bharti for its fixed-line network followed a BSNL-like procurement policy and bought switching separately for its wireline network, benchmarked against the prices of procurement by BSNL. Bharti's fixed business did not deploy any CDMA lines. Bharti also followed a BSNL-like, RLU-based network approach.

Both Tata Teleservices and Reliance Infocomm followed similar procurement policies and went for CDMA equipment for wireless. Both the operators chose Lucent. For wireline, instead of an RLU/RSU approach, both the companies went for multi-access aggregators. Lucent supplied to Tata Teleservices.

VOICE&DATA estimates the total size of market for fixed line switching to be Rs 290 crore in FY 2003–04.

The switching market was still entirely dominated by the traditional TDMA switch. IP was deployed at only a few ports in the ILD space. Currently all operators in the ILD space-Bharti, Reliance, VSNL, Data Access-have placed small IP orders. The imperative for operators to adopt IP in the ILD space is because all international traffic is imported on IP.

The IP uptake is expected to filter down from the ILD segment to the domestic long-distance segment and then at the metro level and finally at the last mile. This is expected to take another couple of years although IP deployment in the long distance is expected to see some light during the current fiscal.

As the demand for data increases and as operators fight to win customers on the basis on value-added services, they will have no choice but to opt for IP networks in the near future.

Among vendors, Lucent continues to do well, with a hold over the CDMA market. While Siemens, with its Bharti account did well, Ericsson also did well on the GSM front. Alcatel, though still holds a major market share in the wireline segment but it badly needed to penetrate the wireless segment. V&D 100 2003 raised the question whether Alcatel would be able to do it alone or in partnership. Alcatel chose the latter model. It won an order from ITI, for the supply and installation of GSM lines to BSNL. This contract, valued at about 65 million Euros, covers the expansion of BSNL network in western India including Gujarat, Maharashtra, MP, and Chattisgarh.

Ericsson bounced back in switching with an estimated market share of 40 percent in the GSM segment. Bharti being its major client, the company benefited mostly from its aggressive expansion. Bharti had planned a capacity of over 66 lakh subscribers during the last fiscal adding 1,500 new cell sites. The total switching deployment was expected to be 28 MSCs. 

Recently, Ericsson signed a three-year contract with Bharti valued at $400 million to manage, maintain, and provide quality assurance in 10 existing and three new AirTel networks. This deal will ensure continued business for Ericsson for the next three years in switching. In fixed line also, Ericsson supplied switches to BSNL worth Rs 2 crore.

With BSNL's deployment on fixed line dropping, C-Dot technology has lost out almost completely. The technology that ushered in the telecom revolution in India is likely to die a painful death. Other two TEC-approved vendors, NEC and Fujitsu, are also out of the market. With wireless growing and the clear lines between CDMA (Lucent) and GSM (Alcatel/Ericsson/Siemens) drawn, the growth of any vendor would be directly dependent on the growth of one of the alternate technologies. While Lucent, with Reliance as the client will grow on CDMA, Ericsson is better poised in the GSM front, compared to the other two-thanks to its strength in the RF equipment.

While numbers will continue to grow, the advent of IP in a big way is not expected even in FY 2004–05 in local switching.

Balaka Baruah Aggarwal