A Fine Knock

VoicenData Bureau
New Update

Come May and we begin our annual analysis of the telecommunications equipment

industry. The VOICE&DATA survey is one of the most consolidated surveys, which

uses various information sources to work out the performance of the industry. To

make the survey stand out and reflect the actual performance, the industry

information is collected from companies, third party sources, and the

information acquired is analyzed to arrive at the results.


We divide the Indian telecom equipment business in three

categories-enterprise equipment, carrier equipment, and phone. The entire

telecommunications industry grew by 24% from Rs 76,973 crore in FY 2006-07 to Rs

95,407 crore in FY 2007-08.

The biggest contributor to the growth of the industry was the carrier

equipment business, which contributed 60% to the entire telecom equipment

business. Wireless infrastructure and telecom software recorded a growth of 43%

and 29%, respectively.

Reflecting the growth in the broadband segment, broadband infrastructure grew

by 68%. Telecom cables and transmission were other sectors that recorded more

than 50% growth. Telecom turnkey was the only segment that recorded a negative

growth of 17% in FY 2007-08.



The enterprise equipment business grew by 27%, from Rs 10,381 crore in FY

2006-07 to Rs 13,210 crore in FY 2007-08. Network security recorded a growth of

73% last fiscal and network storage grew by 46%. Voice solution and router

recorded a growth of 22% and 26% respectively. The enterprise equipment segment

contributed 14% to the entire telecom equipment business in the country.

Structured cabling grew from Rs 827 crore in FY 2006-07 to Rs 1,173 crore in FY

2007-08, recording a 42% growth.

In the phone segment, while the handsets continued with the growth

trajectory, the fixed phone division recorded a southward trend. This is not

surprising since cheaper handsets have been eating into the market share of

fixed phones. Broadband, coupled with feature-rich phones, might help the fixed

handset players to salvage some market this year. The phone segment contributed

26% to the equipment business.


The mobile handset market grew by 12%, from Rs 21,434 crore in FY 2006-07 to

Rs 24,003 crore in FY 2007-08. The fixed phone market recorded a negative growth

of 41%, from Rs 2,018 crore in FY 2006-07 to Rs 1,200 crore in FY 2007-08.


Telecom Bellwethers

Nokia retained its top position in the Indian telecom industry clocking a

growth rate of 30.6% as revenues reached Rs 15,000 crore. A smart marketing

strategy ensured that the company retained its marketing position. Second in

rank, Ericsson also managed to retain its position, growing by around 60%.

Aggressive marketing strategy and big orders in the wireless segment went a long

way in Ericsson's growth story.

Motorola was at the third position in V&D Top 10 in FY 2006-07. A new

entrant, Nokia Siemens Networks (NSN) occupies this position in FY 2007-08.

Owing to a lackluster performance in both the wireless and handset segments,

Motorola was ousted from V&D Top 10. The company lost huge market share in the

handset as well as the wireless segment. There were also reports of Motorola

equipment being replaced by the equipment of other prominent companies in the


V&D Top 10 saw the entry of new players-Nokia Siemens Networks and Sony

Ericsson. In its first year of inception, NSN grabbed major deals in the

wireless segment, while Sony thumped its way in V&D Top 10. Sony Ericsson grew

from Rs 1,386 crore in FY 2006-07 to Rs 3,083 crore in FY 2007-08, garnering a

share of 12.8% of the total handset market.


ZTE, which had entered for the first time in V&D Top 10 last year, found

itself at the same rank in FY 2007-08. Smart pricing strategy helped the company

retain its position.

Alcatel Lucent, Wipro, TCS, and Infosys moved one step ahead in their

rankings. Alcatel Lucent, which grew by 40% last year, moved from the fifth rank

to the fourth; Wipro, on the other hand, grew by around 60% and moved from the

sixth rank to the fifth. Infosys grew by 34.3% and moved from the ninth position

to the eighth in the V&D ranking.

All in all, the Indian telecom industry played a superb knock in the last

fiscal. One looks forward to a great innings by the Indian telecom industry in

the current year as well.

Team V&D