Carrier Equipment: Transmission : Happy Times

It was a year of good business for transmission vendors. Like the previous
year, private operators were the major business providers as compared to
incumbents. In terms of revenue, transmission equipment market in FY '06-07 is
estimated to be Rs 1,266 crore, an increase of around 65.5% from last year's
figure of approximately Rs 765 crore.

The Transmission Circuit

India has a large and expanding domestic telecom market, specifically
fueled by exponential cellular growth. Operators are planning major rollouts
across India. Significant growth is expected as part of the cellular and WiMax
backhaul. In the Maharashtra and Goa circle, Idea has extended its reach to 700
towns and started operations in Rajasthan, Himachal Pradesh and Uttar Pradesh
(E) circles. Aircel has also expanded its network to Bihar and Himachal pradesh.
Large telecom operators and service providers have announced huge capex
spending. For example, Bharti Airtel has announced a Capex of $3.3 bn for FY
'07-08. Network expansion and increase in traffic because of reduction in
roaming services by up to 56% and reduction in STD and ISD tariff by private and
incumbents players was the success mantra for transmission vendors.

In SDH, ECI Telecom was far ahead vis-a-vis competitors as 80% of its total
revenue resulted from SDH, whereas in DWDM it was Alcatel.

ECI Telecom once again hit the bull's eyes and retained its number one slot.
ECI Telecom did pretty well in the SDH space because of the contracts it bagged
from Bharti, Hutchison, Tata, VSNL and Aircel.

Phenomenal Growth

With a terrific growth of 83%, Tejas jumped to the second spot from
the previous year's fifth. All products from Tejas are in the SDH space. Hence,
the entire revenue of Rs 234 crore was from SDH. Alcatel slipped from second
place to third. It had bagged contracts from BSNL, MTNL, and Bharti. ZTE also
made its entry into the league of top players. In FY '06-07, it had revenue of
Rs 57 crore. They had adopted a joint strategy where price and positioning play
the central role. ZTE received an upgrade contract for DWDM from BSNL, and they
have generated revenue mainly through incumbent players, and partly through
private players. In the DWDM category, ZTE has deployed high capacity 400G
systems, and ROADM system, and in the SDH category, they have developed RPR
technology in FY 2006-07. Nortel was off the color, as it showed a negative
growth of -28%. Huawei bagged contracts from Reliance, and Bharti, as a result
of which it achieved a tremendous growth of 388.9%. In the incumbent space,
companies like UTStarcom, Siemens and Orion did quite well with whatever
expansion deals that were announced by incumbent operators. Tejas launched its
first Ethernet Switching card thereby heralding an era of "Packetized Optical
Transport". This was targeted to enable telecom service providers to provide MEF
Services. Tejas also developed and deployed standards compliant Ethernet-over-SDH/SONET.
ECI on its part introduced metro DWDM, multi-ADM-64, micro-MSPP and Ethernet
over SDH.

The outlook for the transmission equipment industry looks good, as it is one
of the key ingredients for fueling 3G and broadband. Also service providers are
improving their reach in remote areas of the country and cellular penetration
will increase resulting, in growth of transmission segment.

Sandeep Budki

sandeepb@cybermedia.co.in