One unique thing about
Asia-Pacific region in general and India, in particular, is that here networking of
computers is happening at a time when the networking technologies–and even
concepts–are changing everyday. So when one talks of networking in India, every
product is but new to India. Every vertical market is severely untapped.
The product segments remained
dormant in the early stages of networking trends. These are showing up now with the start
of an important development. Our fast developing telecom infrastructure has given birth to
remote connectivity as the next wave in networking in the country. A big need is felt
today for bandwidth and wide area connectivity. And for that, an able telecom/datacom
infrastructure is indispensable. The public communication resources available today are
simply inadequate for further multiplication of networks. Telephone lines are far too less
in numbers and are not suited to enable seamless and fast data/voice communication between
remote locations. The circuit-switched network that was built decades ago was not meant
for packet-switched traffic of data, voice, pictures, and video that populate/will
populate the new networks. The option today is to either digitalize this network, or build
a completely new network attuned to our times.
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To top it all, Internet has taken
everything and everyone by storm. IP packets are everywhere today. In the systems and
pipes within organizations and in large switches and fat pipes in the telco networks. The
Internet seems to have completed the convergence of the private and public networks.
Private ISPs are mushrooming everywhere. Soon there will be only one large network, the
Internet. The rest would be subsets. And the outline of a robust network is beginning to
take place. The real issue is not whether or not, but how soon!
Vendors already have a wind of
the things to come and have started positioning themselves for the future demand. Products
that revolve around IP technology, products that are based on packet-switching, and
products that drive convergence of technologies are just around the corner; ready to take
their place in the public networks of tomorrow. Networking products that enable broadband
access are also not far away. Out of whatever little activity that has occurred in this
domain, a clear picture comes out as to what product markets are emerging.
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Remote Access Server
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RAS has been the hottest
segment in the networking industry ever since the Internet industry opened up in November
last. The market for this product was just Rs 1.5 crore in the previous year as compared
to Rs 33.85 crore in fiscal 1998-99. With Internet rapidly multiplying its base and reach,
the real activity will be in the RAS market. The last quarter of fiscal 1998-99 and the
first month of the current fiscal have been quite hectic. And this is just the begining. -
RAS is an open and shut carrier
equipment. In India, it has not yet gone into the enterprise networks as a device which
enables remote connectivity. -
Almost src="segment_a1.gif" width="279" height="171"
alt="* Others include Ascend, Tata Lucent, Tata IBM, Cabletron, D-Link, LanBit, etc."
align="right" border="0" hspace="4" vspace="4">all
the RAS ports that were sold in India were consumed by ISPs. The total base of RAS ports
in India is estimated at about a little over 40,000. Out of this, 38,000 were added last
year. That the RAS market is dominantly driven by private ISPs is evident from the fact
that out of the 38,000 ports installed last year, only about 10,000 were added before the
privatization of Internet services in November. -
VSNL, with its 40 plus presence
and two and a half million subscribers, is the largest customer. As an ISP, it has come
out with several tenders inviting bids for RAS equipment. It placed a multi-thousand port
case during November on Nortel. The total installed RAS base in VSNL is more than 20,000
ports, a considerable share of it getting installed last year. Not surprisingly, with the
bulk of deals commanded by it, VSNL commands and gets the lowest prices for their
purchases. -
On an average, the price per
port of a RAS is Rs 8,400 for large deals. But for VSNL it costs less than Rs 7,000, as a
major chunk of the orders come from it.
RAS has |
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Among the private ISPs, Satyam
Infoway and Bharti BT Internet have bought a couple of thousand ports each. MTNL also has
acquired about a thousand ports. They have all taken up RAS systems with just enough port
configurations to suffice their first phase of operation. The scalable boxes that they
have gone in for gives them the option of putting in more ports as and when required. -
The smaller class C and B ISPs
like Weikfield Mnemonix, Wilnet Communications, Southern Online, and Palcom have opted for
much smaller configurations of RAS. -
There width="287" height="183" alt="https://img-cdn.thepublive.com/filters:format(webp)/vnd/media/post_attachments/1f313ab2b1c7f5cb73d13f2b2d08619cc31207f8d5632a7784071524f8e32621.gif (17779 bytes)" align="right" border="0"
hspace="6" vspace="6">are more than 10 brands of RAS in the market at present. A year
back, Cisco was the only RAS provider in the country, with VSNL as its main customer. As
the demand for RAS is coming from ISPs spread across the country, all
vendors–regional as well as national–have benefited from the first wave of RAS
implementation that came in the last quarter of fiscal 1998-99. Larger players like Cisco,
Nortel, and 3Com have bagged orders worth over 5,000 ports from the national ISPs. The
smaller ISPs have procured equipment from vendors like Specialix and Tata Lucent. -
Within a short span of six
months opening up of the private ISPs, new technologies are becoming popular. At least two
operational ISPs went in for digital E1 lines on the local exchang side instead of
individual lines. This immediately spawned the need for digital ports in terms of RAS
equipment. -
n RASs that are capable of
running several types of access–including cable, wireless, in addition to PSTN and
ISDN access–from the same big box are being put to test. Cisco, Ascend, Nortel, 3Com,
and Lucent, to name a few, have such types of boxes to offer. ISP premises have truly
become the testbeds for tomorrow’s technologies. -
Though Cisco retains its hold
with a 41 percent market-share in the field, its dominance has been challenged by Nortel
Networks and 3Com. Nortel grabbed 20.8 percent of the market-share, while 3Com improved
largely in the fag-end of the year gathering about 14.8 percent of the market. It was a
year of surprises. VSNL, which had been giving all orders to Cisco till last year, tried
out a new RAS from Nortel. It was a year which saw the emergence of 10-odd brands and
when, for the first time, market-shares could be worked out. -
For every 10 subscribers to the
Internet, a port is required. It is predicted that there will be one million subscribers
by the turn of the century. The ISPs will need about 75,000 ports till the year-end. If
these predictions are to be believed, there will be enough space for all vendors. We might
see the emergence of newer brands like Shiva, now part of Intel.
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Carrier Datacom Switch Equipment
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This market is fast emerging as
the cream of the datacom market. With data traffic multiplying at a blitzy pace, the
carriers have no chance of going back to circuit switches for the networks of tomorrow.
The carrier datacom switch segment is indeed a high-value market, each telco deployment
being worth crores of rupees. Vendors did well to sell more than a handful of such
switches which meant a total business of Rs 41.8 crore. -
The width="165" height="184" alt="* In carrier datacom switch equipment." align="right"
border="0" hspace="4" vspace="4">convergence of services and increasing high-bandwidth of
the network have caused a paradigm shift in the way carriers look at networks today. So
the carriers are being forced to go in for these new switches. The other advantage is that
of optimum usage of a network. Newer technologies like TDM, packet-switching, and
ATM/Frame Relay switching score over traditional circuit switches in saving a lot of
bandwidth resources. -
Carrier switches are taking on
the capability of not only carrying traditional TDM kind of traffic but also varied mix of
traffic like ATM, Frame Relay, xDSL, cable, etc. It is a multimedia network that this
switch will try enabling. -
MTNL was the first carrier to
implement a managed data network within India and has consumed more than half of the
carrier datacom switches installed in India. It is learnt that MTNL has more than 25,000
leased lines operational. There are two distinct advantages of a managed network in such a
scenario. One, it saves a lot of bandwith. Two, preferential services are possible. A
slice of bandwidth for a slice of time is what the new switches are able to deliver. It is
also possible to identify the points of failure. During the last fiscal, MTNL added more
equipment to its data network. Orders worth more than Rs 8 crore were awarded to Tellabs
for this purpose. -
Taking a cue from MTNL, others
like VSNL, DoT, and some private basic/cellular service providers are also in the process
of either updating their legacy networks or building frameworks for tomorrow. VSNL has
implemented a switch solution for providing international private leased circuits to its
customers, while DoT has also gone in for a similar switch platform for its own leased
line services in its state and city circles. A few ISPs are also known to be building
high-speed multi-services backbone for their future services. Global E-Commerce Service
Ltd and Satyam Infoway have already taken the plunge.
The |
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Unlike the box products which
are sold to the enterprises, the carrier market is truly a solutions market. Here,
business is project based. The provider of the switch platform either implements it
totally or plays a major part. A case in point being Tellabs which invoices its business
in terms of orders rather than equipment sold. No wonder that the value of a switch order
often runs into crores of rupees. -
This is still an evolving
segment. And technologies like ATM and DSL that are presently being tried out in India are
quite new to other parts of the world also. As of now, Enhanced TDM and Frame Relay are
being tested more actively. In future, ATM is likely to become very popular. VSNL and DoT
have come out with huge tenders for ATM equipment. -
Tellabs, with a market share of
about 60 percent, is the undisputed leader in this segment. It is followed by Nortel
Networks with 33 percent. Martis DXX of Tellabs is the most visible platform present in
more than five carrier networks. Nortel Networks, for the first time, has entered this
marketscape with the large Global E-Commerce win. Newbridge, which is a strong player in
the high-end enterprise LAN/WAN switch market, also did some good business. And 3Com has
been successful in placing some of its Total Control solutions in the carrier space. -
The outlook for this
high-profile segment is good. The National Telecom Policy 1999 explicitly allows
packet-switched networks for cellular/basic service providers. It also encourages
multi-service networks. This will greatly help the deployment of this technology. -
Once long-distance service is
opened, a few backbone providers will look at the business of building alternate
data-centric backbone for high-speed data which will be leased out to the local operators.
That will be another opportunity for carrier switches.
High-speed Modems (64 kbps and above)
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With increasing usage of leased
lines, the need for high-speed modems or CSU/DSUs has suddenly gone up. A negligible
market, which was dominated by RAD at the customer-end and Motorola at the carrier-end
till last year, has undergone a turnaround. High-speed modem/CSU/DSU brought in about Rs
22 crore in sales in 1998-99. -
Leased src="segment_a4.gif" alt="* In high-speed modems." align="right" border="0" hspace="4"
vspace="4" width="165" height="183">lines terminate either on a high-speed standalone
modem or on an integrated router module within a RAS. Unlike RASs, modems have been around
for a long time in the networks of VSNL, MTNL, and DoT. At the subscriber-end, a
subscriber goes in for a modem more often than a router. -
High-speed modems are priced at
a lower price than routers. While router prices vary from Rs 1 lakh to multitudes of it,
an average 64 kbps leased-line modem costs about Rs 70,000 and an average 2 Mbps leased
line modem comes at a little above Rs 1 lakh. CSU/DSUs on the other hand can come as cheap
as Rs 30,000 and go up to Rs 70,000. -
The most significant cause for
the surge in demand for high-speed modems is the falling prices of leased-lines. A 64 kbps
leased-line costs under Rs 1 lakh per year for distances beyond 500 km and much less for
shorter distances. A 2 Mbps leased-line costs Rs 22 lakh for distances beyond 500 km but
under Rs 1 lakh for a distance of 10 km or less. -
The move towards a better
future for the family of leased-line modems began even before the announcement of the
above tariff by TRAI. The opening up of the Internet access market has proved to be a
harbinger of good days. As many as six new ISPs have already become operational; a few of
them operating in more than just the metros. They have gone in for several leased circuits
to connect to the VSNL Internet gateways and also to interconnect their points of
presence. All this has meant good business for high-speed modem vendors. -
A growing Internet-based
industry also means increased demand for bandwidth. This long standing demand is destined
to boom in the very near future. And it augurs well for the high-speed modem market. -
Approximately 40 percent of the
modem-market is being consumed by the carrier-side, while the rest 60 percent accounted
for by the subscriber-end. The government holds a monopoly on the carrier-side. The
rate-contract tenders of VSNL and the tenders of MTNL/DoT were large and well contested.
Among the private ISPs, Satyam Infoway spent more than one crore on the purchases. On the
consumer-side, the banking and finance sector has been the most prolific buyer. In fact,
nearly 50 percent of the RAD modems have been consumed by this segment. -
RAD, the popular Israeli brand,
is the number one brand in India in high-speed modems. It has complete market monopoly
with about 68 percent of the market-share. It won the most prestigious carrier deals with
VSNL and Satyam recently. -
Motorola follows far behind. It
was hardly active in the market last year until Convergent India became its authorized
distributor. The lacunae that was left by its absence was filled in by players like
Pairgain, Patton, and Cygnus Microsystems.