T&M market had a sluggish growth of 16.3 percent in 2000-01, reaching Rs 370 crore of total sales. This figure includes total communication T&M products sales, which last year was Rs 318 crore. The service provider segment last year accounted for Rs 250 crore.

This happened despite a strong growth in the telecom infrastructure equipment, which usually drives the growth of T&M equipment. This anomaly can be explained with the help of two possible reasons. First, Bharat Sanchar Nigam Ltd (BSNL) did not buy much of T&M equipment. Second, the private operators just got more of the old stuff. That means little new technology was deployed. So while new base stations or microwave radios are good businesses for equipment and turnkey vendors, not many service providers require new kind of test equipment along with these deployments.

Specialized test sets for GPRS, which many vendors pinned their hopes on, did not sell, as cellular service providers did not deploy GPRS the way they were expected to. Similarly, with a limited number of IS-95 systems working, IS-95 CDMA test sets also did not sell much. This, however, is likely to change, as BSNL is likely to buy in large numbers this year, though any tender is not yet out.

A growth in OTDR sales somewhat compensated for a sharp drop in sales of specialized test sets. However, even the projected sales did not happen as not many companies actually started drawing fiber after laying the duct. But large duct deployment means that in the next couple of years, a lot of fiber will be drawn. Assuming that even 30-40 percent of them will be lighted, it will be a big business for OTDRs as well as optical network test systems. Also, many companies will go for DWDM, which could spur the growth of DWDM test systems.

For the third consecutive year, the US sanctions affected the sale of test equipment to many organizations in India, affecting companies like Agilent and Tektronix in a major way. With indications of the ban being lifted, this segment (defense, defense PSUSs, etc) could bring the smile back to the T&M vendors.

With new fixed service networks being rolled out and the fourth cellular operators likely to start their operations, there will be significant sales in the telecom equipment. However, that will mean only some incremental sale for T&M vendors. Unless the service providers go for technologies like GPRS, VoIP, and start providing VPN solutions aggressively, T&M vendors will not have "their" boom time.

The growth of general instruments will be stable.

Overall, the year 2001-02 may be a good year for T&M. The first quarter shows some promise. Tektronix registered more than 200 percent growth in AMJ 2001. However, if new technologies do not come in, the incremental sales of the vanilla equipment will not be able to produce more than 12-15 percent growth.

With more competition coming in, the service providers will focus on QoS. That will mean network certification and some degree of outsourcing of T&M work. From 2002-03, services will form a significant percentage of the T&M vendors’ revenue.

One new segment that will contribute towards significant T&M sales in 2000-01, will be the new technology companies.

In service provider segment, only the long distance service provider will go for big T&M equipment purchase. BSNL may revive the purchase, especially CDMA test sales in the wake of large CDMA deployment in Wireless in Local Loop. Fixed service providers and cellular service providers are not likely to buy in large quantities, despite network expansion.

Indian utilities who have rolling-out ambitious networks will be a new segment for T&M.