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India has an exponentially growing telecom market. The country has recently achieved the 391.76 mn cellular subscribers mark and the growth rate is showing no signs of slowing down (about 10-15mn subscribers being added every month). In addition, the enterprise services market is growing as is the trend for the broadband subscriber base.

India is following a trend of leapfrogging on technology and has become the first mover when it comes to adopting new technologies. In terms of technology and means of content provisioning, the Indian market is witnessing an increasing penetration of IPTV, 3G and WiMax as the three dominant trends. This is lending a definite ambiance for vendors providing cutting edge technologies in a very price sensitive market.

Under the shadow of economic slowdown, Indian telecom service providers continued their expansion plans. The Indian transmission segment saw robust growth of over 60% and stood at a value of Rs 3,107 crore from Rs 1,931 crore. ECI remained the #1 transmission equipment vendor in India with approximately 30% market share. Its main business came from telecom giants including Bharti Airtel, Tata Group, Vodafone, and Idea Cellular.

ECI made inaugural strides in the IPTV and broadband markets with ECI being awarded the first end-to-end IPTV infrastructure deployment in the private telecom sector and the deployment of a national high-speed broadband network.

India represented approximately 25% of ECI's global revenues in 2008, versus 20% in 2007. In India, ECI increased revenues from transmission equipment, which excluded microwave equipment, from Rs 580 crore in 2007 to Rs 930 crore in 2008.

This represents a 60% year-on-year growth of ECI telecom. ECI also realized initial revenues from its carrier class router platforms of Rs 45 crore and broadband access platforms of Rs 40 crore.

ECI was followed by Tejas Network, which gained market share of around 20%. According to VOICE&DATA estimates, total revenue of Tejas Network from transmission segment in FY 2008-09 was approximately Rs 625 crore.

Though in the coming financial year it would be tough for Huawei to gain business in India due to secuirty issues brought up by the Indian intelligence bureau, the last financial year witnessed tremendous growth in business of Huawei. With close to 270% growth, Huwaei occupied third place in the Indian transmission segment.

Trends in Market
Advent of IPTV in Indian market has opened a new growth opportunity for vendors in unexplored segments. Industry is seeing a growth in demand for voice, video and data which will influence the technology and equipment supply in market.

There has been a lot of brouhaha over 3G and WiMax, but we may expect to see it converting into reality by this yearend. Last month, DoT has claimed that 3G and BWA spectrum auction is topmost in its priority list.

Technology wise, the key trend that we are witnessing in the market today is the ongoing investment by operators in SDH based solutions, mainly to support the significant increase in network traffic.

In parallel to investment in SDH based solutions, the industry observed some migration to IP based technologies such as Carrier Ethernet. However, such migration is quite subtle at this point and most operators are taking a cautious view in the matter. In this respect, carriers are increasingly interested in how to leverage their existing network infrastructure while also setting up the stage for growth and new services.

Growth Drivers
The quest to reach subscribers in every nook and corner of the country is driving the expansion of transmission.

The growth trend in transmission will be driven by ongoing expansion of existing networks and roll out of 3G services. And,with broadband and triple play services adopted sooner than later, it is creating strong opportunity for infrastructure solutions. ZTE sees business opportunity coming from the requirement of telecom equipment manufacturers and operators who are expecting unified and automatic management system for the transmission segment.

In the broadband segment, UTStarcom is realizing that operators are focused on optimization of transport networks for multi-service delivery. These transport networks have historically consisted of Synchronous Digital Hierarchical (SDH) Networks and Metro Area Networks (MAN). Now these are migrating towards Packet Transport Network (PTN). Key market segments offering the best opportunities for migration and adoption of PTN, according to UTStarcom, are mobile backhaul, broadband aggregation including carrier Ethernet services, IPTV traffic, Internet traffic, and MSTP evolution to PTN.

Industry Outlook
The financial year 2009-10 saw the floating of $6 bn tender from BSNL for its 93 mn line cellular expansion project. Ericsson and Huawei were declared winners of this tender. Ericsson was shortlisted for north and east zones and Huawei qualified for west, east and south zones.

VOICE&DATA estimates that the Indian transmission segment will see a double digit growth and will be to the tune of Rs 3,700 crore by the end of FY 2009-10.

In line with this, Huawei specifies the FY 2009-10 growth to be at least 18%, mainly due to the preparedness of the operators for all-IP evolution, as well as due to the modernization of transport system to migrate from the legacy to a packet transport delivery platform.

Players in the industry believe that the coming financial year will see growth trend in transmission segment despite the economic slowdown. DoT's pressure on greenfield operators to start services soon will also force new operators to spend on network expansion.

Prasoon Srivastava
prasoons@cybermedia.co.in