The trick last year in Network Integration (NI) was to adapt to market movements. It was this important aspect that separated the market share gainers from the losers. By the end of a very turbulent market such as the one in 2000-01, it was not clear which segment of the market was going to give out chunky deployments of network in the current year. Many companies burned their fingers while going after the new economy operations. A greater number of companies were left scarred by over-indulgence on the service provider segment. In such a situation, it was the companies, which had distributed focus and the ability to quickly address new opportunities, that were the big gainers.

There was a major focus among the tier-1 integrators to improve their earnings from pure integration services revenue. And, in that sense, last year was a good beginning for the companies that tried to do this, as many projects were implemented in which the products were sourced directly from the vendors or their distributors, and integrators were contracted to provide the integration services. This flowering of the integration and services parts meant that integrators enjoyed a better margin during the last fiscal.

A trend that was seen in the market was the entry of telecom turnkey providers into this space. The most prominent names being ITI, ARM, Global Telesystems, Supreme Telecom and HFCL. It was mainly the ISP segment and the call center segments that these companies were gunning for.

Another trend was that of network integrators exploring the export market for network integration services. Though multinational integrators have been sourcing expertise in certain technology areas from India for the projects especially in South East Asia and East Asia, last year even saw Indian companies dip their finger into these promising waters. This, being a high investment-high return game, only top-rung players like Wipro were involved.

The New Network Opportunity

Exceptions notwithstanding, traditional network integrators have been operating on a low-investment high-returns mode—mostly providing network integration services to enterprises. It is only in the last two years, that these companies have suddenly looked towards carrier opportunity, with the opening up of the ISP infrastructure market. These integrators, though they have a good understanding of packet technologies, have no extensive experience as far as large-scale service provider networks are concerned.

On the other hand, the telecom turnkey service providers have basically been involved in establishing circuit switched exchanges, laying OFC/JFTC for backbone as well as local loop, putting up microwave radios for transmission as well as access, and, to some extent, integrating a few datacom boxes as well. There is clearly a lack of hands-on packet technology expertise among these players. Also, when it comes to providing the backend OSS and BSS, including the NMS, the telecom service providers have been again depending on the Systems Integrators (SIs)—in India many of these have NI divisions as well. There exists, between these approaches, a big gap to be filled.

In a sense, this gap appears to be even bigger with there being no precedent as far as setting up a new network is concerned. Whoever fills this gap fast is likely to be a big gainer in the current year’s carrier build-outs. Though the vendors are promising to bring with them their own service people to establish the networks—this model may not work in the new scenario and in a cost-conscious country such as India. An independent network integrator may likely be the missing puzzle piece.