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The year 2004-05 was a watershed year for the WLAN equipment market in India. In many ways wireless entered the main
stream with both enterprise and SOHO/home users. According to VOICE&DATA estimates, the Indian WLAN equipment market was valued at Rs. 82.5 crore in 2004-05, as against Rs. 51.5 crore in 2003-04.

However, it could not register the kind of growth that it had achieved in 2003-04 in terms of value as equipment prices dropped substantially.

Although a number of factors got together to drive upward, the movement in the WLAN equipment market in 2004-05, the most significant was the drop in equipment prices. The per user cost of deploying WLAN in enterprises slipped by around 50 per cent in 2004-05. This was complimented by the fall in price of laptops and Internet bandwidth, and the expansion of network connectivity. The availability of other Wi-Fi enabled gadgets like PDAs and phones also aided the adoption of WLAN.

The market also benefited from the developments on the regulatory front. The government completely delicensed the 2.4 GHz band for indoor use of low power applications and technologies. The use of low power indoor systems in 5.15 – 5.35 GHz and 5.725–5.875 GHz bands was delicensed in January 2005.

Vendors and distributors aligned their energies to create awareness about wireless. Channel education and training also helped the market grow. They took their road shows and training programmes to smaller cities and towns. For instance, Rashi Peripherals, a distributor of Netgear in India, organized 37 training sessions on wireless and went to places like Ranchi, Guwahati and Raipur. Such programmes helped explode the myth that wireless was expensive.

Three segments emerged in the market – the hotspots primarily driven by ISPs and Telcos, the enterprises and the home/SOHO segment.

Hotspot deployment found favour with telecom operators and ISPs such as BSNL, MTNL, Sify, Dishnet, Bharti and Tata Teleservices. Even though usage remained low in most hotspots like Internet cafes, restaurants, and other public places, hotels saw a significant surge in Wi-Fi usage among their guests and other visitors. It is estimated that India had around 500 hotspots by March 31, 2005. This was in contrast to 2003-04 when there weren't any significant deployments except by Tata Teleservices and Sify.

There was a noticeable growth in enterprise networks across verticals both in terms of deployment of new networks and expansion of existing networks. WLAN adoption grew as more and more enterprises got aware of the benefits of wireless, and their apprehensions with regard to security of wireless networks were suitably addressed by the vendors. While wireless was largely deployed and used as a complimentary network, many enterprises only deployed wireless in their new office locations as they found it cheap and convenient. The other important factor in the growing adoption of wireless was the increase in notebook penetration on account of a fall in notebook prices. Hotels, educational institutes, IT-BPO companies were the important verticals in this segment.

The past year also saw the birth of the home-SOHO segment in India. Even though in small numbers, Wi-Fi gained traction among home users. While drop in price of wireless routers turned out to be favorable, Wi-Fi in homes also got a push from telcos offering broadband services. Bharti was offering Wi-Fi services over digital subscriber lines in homes in many areas.

There was a shift in the pattern of wireless usage as well. As the deployment moved from 802.11b to 802.11g which offered higher throughput (54 Mbps), and many WLAN equipment now offered enhanced security and management features, many enterprises started using it for various other applications including voice besides Internet access and email. This resulted in many vendors shifting their focus to selling "Wi-Fi Solutions" as against selling boxes particularly in the large enterprise, BPO, MNC and hotspot segments.

Also, WLAN moved beyond buildings and campuses as many enterprises started using it for building-to-building connectivity using wireless antennas and bridges. Even though not many enterprises preferred wireless to fibre for connecting two buildings within the city, quite a few did, as it was easy to deploy and manage besides being more cost effective.

While Cisco, with its focus on the high end of the market, continued to lead the market in value-terms, D-Link was the market leader in volume terms. The year 2004-05 was significant for Netgear as the vendor gained tremendous acceptability in both the enterprise and home-SOHO space. It's products gained a lot of mind share and volumes as the three distributors promoted it extensively across India. HCL Peripherals (Netmax brand) also emerged as a key vendor last year. The other significant WLAN equipment vendors in the market were Linksys, Proxim, Dax, Brovis, Compex, Multitech, Allied Telesyn, and 3Com. Pronto Networks was an important OSS-BSS solution provider to hotspots. There were a few Chinese brands also in the market. However, they failed to make any impact, as they could not offer any significant price advantage.

WLAN market is likely to continue on the growth path in the current year. While enterprise and hotspot segments would continue to fuel growth, home-SOHO segment is likely to emerge as a key buyer of WLAN equipment. Wi-Fi adoption in homes is likely to spread on account of the spread of broadband networks and falling laptop prices. On the other hand, various hotspot providers plan to add around 1000 hotspots in the current year. Both in the enterprise and hotspot segments, buyers would increase focus on WLAN solutions with enhanced security and network management features. It is also likely that more and more vendors would make their presence felt in the market especially in the lower end of the market.

Ravi Shekhar Pandey