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For two years, the communications T&M market had basked in a golden hue of sustained buying by telecom service providers. Things turned considerably different in fiscal 2003-04 and T&M vendors had no choice but to function in a dimly lit atmosphere.

VOICE&DATA made some revisions in the last year's figures too, based on data gathered from informed sources in the industry. These revisions are reflected in the table.

These ups and downs are cyclical and are typical of the communications T&M business. This is because service providers are the biggest buyers of T&M equipments and they place large orders only when they are significantly expanding their footprints.

How It Flowed...
Fresh T&M investments by service providers in fiscal 2003-04 were significantly less as compared to the previous fiscal. This was largely owing to the fact that bulk procurers BSNL and MTNL invited only a couple of large tenders, as their fixed-line business faced unprecedented stagnation. A large number of their fixed-line customers surrendered connections, very often in favor of cellular and private fixed-line connections.

In view of these developments, T&M operators are narrowing their focus to concentrate on wireless operators.

One large order was from BSNL for the supply of 313 SDH analyzers. (the earnest money was 56 lakh 75 thousand, in the month of July). MTNL didn't invite any major tender specific to T&M equipment, even though it had provisioned for some SDH analyzers and other products in its yearly procurement plan.

Reliance and Tata, who had earlier done sizable T&M procurements in their network build-out phase, also went easy last year. Still, telecom remained the key vertical as far as T&M spend was concerned.

CDMA service providers, especially Reliance, added subscribers at a phenomenal rate, and so did GSM service providers like Bharti and Hutch. This ensured that the demand for spectrum analyzers, network analyzers, and protocol analyzers never died out, even if it wasn't comparable to the demand experienced during build-out phases. Moreover, private fixed-line operators, especially Bharti, managed to grow their subscriber bases, thus creating some additional demand. Alternate bandwidth providers like Railways and PowerGrid are also learnt to have made some new procurements.

The government's decision to license private companies to own and operate satellite uplink facilities encouraged TV channel companies to set up uplink facilities in India and augment their channel offerings. Sahara Television Network, for instance, decided to add seven more television channels. It purchased Tektronix video test and measurement instruments for the new channels as well as the new uplink earth station, located at Noida.

As Prasar Bharati decided to move Doordarshan services from analog to digital, it too felt the need for procuring video T&M equipment like dual-standard waveform monitors. Tektronix bagged the order. Defense continued to contribute its bit, mostly in the form of network analyzers.

How They Fared...
For Agilent, wireless network characterization was a focus area in fiscal 2003-04. The company could leverage its presence in the operations support systems (OSS) space to bag orders in this area. Given its suite of network management products, it becomes easier for it to make a bundled offering to cellcos. In particular, with the focus increasing on revenue assurance, Agilent is poised to play a dominant role in the space.

According to V&D estimates, the company sold around Rs 25 crore worth of network analyzers during the fiscal under consideration. It is understood to have done an equal amount of business in SDH analyzers too.

According to industry sources, Agilent is said to have sold a fiber network management system to Reliance. Although the order is not likely to be very big, it does give the company a better foothold.

It was an eventful fiscal for Acterna, globally as well as in India. In June 2003, Acterna India witnessed a change of guard. In August 2003, Acterna filed for Chapter 11 with the US authorities. However, it came out of it quickly, as early as October 2003, skirting any major impact on the business in India. A couple of months later, the company set up its regional headquarters in Hong Kong, a move that improved the confidence of customers in India.

Measures suggested by Ernst & Young, Acterna's restructuring advisors effective from May 21, 2003, finally paid off. Worldwide, Acterna experienced quarter-to-quarter growth after a long lull and introduced an array of new products as well. In fact, Acterna has introduced 14 new T&M solutions to the market over the past year, with similar plans for releases in 2004.

The most significant product launched by Acterna in the fiscal was DA-3600A, an analyzer of wire-speed performance up to 2.4Gbps that provides full monitoring and analysis of IP networks over a wide variety of network interfaces. The company is said to have sold some units of DA-3600A to BSNL and Bharti.

Undercurrents of Change
Today, networks have grown large by all accounts-and quite complex too. As legacy and state-of-the-art networks continue to coexist and exchange an ever-increasing odd mix of traffic, new T&M tools become more and more important to ensure quality of service.

Installations of new SDH units were considerably less as compared to the previous year. One reason could be that service providers are looking at 10GB Ethernet as a low-cost alternative for data transmission networks as compared to SDH.

In view of this, T&M vendors have made significant R&D investments, and are gearing up too, to exploit a potentially growing market. This segment is expected to grow at a rate of 25 percent.

Service providers are also putting pressure on T&M vendors to provide more intelligence in testing tools, in view of the growing complexity of networks. The stress is on two things: ease of use, and reduced mean time in understanding the problem. Acterna is investing in providing local language interface and support towards this end.

Add to this the fact that Indian service providers continue to spend dismally low amounts on T&M equipment as a percentage of the total network spend, even though there is a considerable need to improve the overall network quality and service.

The Road Ahead
The growth outlook for the fiscal 2004-05 is modest in the first half, and on the higher side in the second half. In other words, the industry is likely to clock a growth of 10-15 percent in H1, which could rise up to 25 percent in H2. This is because the wireless food chain will grow and cellcos will be forced to turn to QoS issues. Bharti and Hutch are likely to take the lead here.

V&D estimates CyberMedia Research

Today's-and next-generation-networks call for several new characteristics in test equipment, especially the ones used in the field.

As a solution, vendors are considering running of multiple tests in parallel on the same instrument. Given the advances in microprocessor technologies, such products will increasingly become the order of the day. Also, newer tests are likely to get introduced.

Agilent's establishment of a system-on-a-chip (SOC) design center in Gurgaon may be seen in the light of the above. The center is said to be offer local design expertise for the company's ASIC customers in Asia.

In the optical fiber space too, it's becoming clear that the number of test devices has to come down. In fact, contrary to the misconception in certain quarters, the sheer volume of fiber testing can get a carrier swamped, thus defeating the very purpose of testing. Once again, a lighter instrument, packed with multiple test capabilities is the answer. The trend is already picking up.

Deepak Kumar