CARRIER INFRASTRUCTURE: What Slowdown?



The Industry

  • The total size of carrier equipment industry in 2000-01
    was Rs 9,369.22 crore.

  • The V&D100 companies accounted for 81.8 percent of
    the total industry size. The V&D100 equipment companies totalled Rs
    5,746.89 crore while the turnkey companies contributed Rs 1,922.08 crore.

  • For a comparison with last year’s figures, the combined
    equipment/turnkey Top 10 companies contributed Rs 6,965.09 crore. The
    corresponding figure in 1999-2000 was Rs 5,133.9 crore. This was a growth of
    35.67 percent.

  • The turnkey business grew rapidly, thanks to the large
    cable deployment by companies. On the equipment front, almost all big
    companies did well. Most of the private companies grew by more than 30
    percent.

  • The new technology companies however, were slower. For
    example, Cisco which had an impressive 125 percent growth, grew by less than
    50 percent, compared to an impressive 101 percent by HFCL and 85 percent by
    Lucent. Interestingly, both the companies had a mix of government and
    private orders. Traditional equipment like TDM switching, GSM radio,
    microwave, SDH and IS 95 CDMA wireless systems sold maximum.

  • New technologies like Carrier IP networks, GPRS systems
    that were expected to be deployed were non- starters. DWDM systems
    deployment also did not happen though the decision-making process has
    started. Broadband technologies were deployed by a large number of service
    providers, but in small ways.

Deployment

BSNL/MTNL

Switching:

  • As on 31 March 2001, BSNL had an equipped switching
    capacity of 399 lakh. The corporation added 71.46 lakh lines, against a
    target of 72.35 lakh. This was an under achievement of 1.23 percent. The
    total switching capacity increased by 21.8 percent. In 1999-2000, the
    corporation had added 65.95 lakh lines, against a target of 58.7 lakh, which
    was an over-achievement of 37.58 percent. BSNL (DTS earlier) had been over
    achieving the target for the last few years. It seems to have reached a
    plateau.

  • The total TAX capacity on 31 December 2000 (the latest
    figures available) was 22.06 lakh. This meant an addition of 2.58 lakh lines
    (an increase of 13.25 percent) over March 2000, total base of 19.47 lakh. It
    seems BSNL will under achieve the target here as well, because it had plans
    to add as much as 5.14 lakh by 31 March 2001. In 1999-2000 too, DTS had
    underachieved, though by a smaller margin of 7.7 percent. With competition
    coming in long distance, BSNL may well be fearing the under-utilization of
    TAX capacity.

  • In 1999-2000, BSNL/MTNL started introducing Intelligent
    Network (IN) services. In 2000-01, fifty locations were provided with IN
    facilities, taking the total number of stations with similar facility to
    ninety-seven.

  • Last year, BSNL issued a tender of 2.018 million lines
    for new technology switches in January 2001. The price drop trend continued
    with L1 Lucent quoting Rs 1,979 per line. The order was placed at that price
    with Lucent (8,18,000 lines), Siemens (4,00,000 lines), Alcatel (4,00,000
    lines), and HTL (4,00,000 lines). HTL accepted the order for only 1,00,000
    lines. For the first time, ITI’s bid was rejected. So was Ericsson’s.
    The total value of the order was worth Rs 340 crore.

  • MTNL also bought large new technology exchanges worth Rs
    115 crore, at a price of roughly Rs 2,400 per line. Siemens bagged 1,90,000
    lines while HTL, Lucent and ITI bagged 95,000 lines each.

Transmission:

  • Against an over-ambitious target of 1 lakh route
    kilometers, BSNL managed to add 54,000 route kilometer of Optical Fiber
    Cable (OFC), thanks to the unavailability of cable. Private service
    providers came in a big way
    and seriously affected BSNL’s plans. In fact, the total addition was not
    only a huge 46 percent underachievement, it was lower than what was added in
    the previous year.In 1999-2000, DoT had added 63,265 route kilometre, which
    was almost double of what it had added in 1999-2000.

  • BSNL added a total of 583 lckm of Jelly-Filled Telephone
    Cables (JFTC). But the company is planning to go for distributed switching
    in a big way, thus hoping to optimize on the cable plant. In 2001-02,
    therefore, BSNL will deploy less amount of JFTC. The plan as of date is to
    deploy 473 lckm, though there is every possibility that it may be reduced
    further.

  • On the microwave front, BSNL overachieved by 60 percent
    against the target and added 16,00 rkm of microwave. This is less than last
    year’s addition of 19,881 rkm. This was because the company is wanting to
    move to fiber and use microwave only in some areas. The total base as on 31
    March 2001 was 1,85,152 rkm and it plans to add 7,500 rkm in 2000-02.

  • BSNL continued to deploy SDH equipment in full swing. It
    also made new purchases worth around Rs 120 crore, out of which Rs 51 crore
    was for STM 1 and Rs 69 crore was for STM 4. Fibcom bagged 40 percent of the
    order while ITI bagged 20 percent. MTNL also bought SDH equipment worth Rs
    35 crore in February. In India, SDH technologies from Tellabs and Mraconi
    are competing for market share.

  • In 2001-02, it seems SDH is the mantra for BSNL. In
    April-June 2001, there has been two tenders from the company for purchase of
    SDH equipment. One for STM 16 equipment of the order of Rs 79 crore, and
    another for all STM1/4/16 equipment worth about Rs 46 crore.

  • Though BSNL targeted installation of MCPC VSATs in a
    major way, till December 2000, only forty-three such VSATs had been
    deployed, as against a target of 164 units. That took the total installed
    base to 394 VSATs.

  • On the satellite front, the BSNL/MTNL also augmented the
    channel capacity of existing earth stations using Intermediate Data Rate (IDR)
    facility. By 31 December 2001, IDR facility was available in fifty-four
    routes in the country. Fifteen routes were provided with this facility in
    the first three quarters of 2000-01against an annual target of twenty-three.

Access:

  • BSNL tried to reach the length and breadth of India with
    wireless access. Primarily, two types of technologies are being used by BSNL/MTNL
    for fixed wireless access–IS 95 CDMA and CorDECT. While IS-95 CDMA happens
    to
    be the most popular technology among the private service providers as well,
    CorDECT is being used by a few private fixed line providers and BSNL.

  • There was a delay in deployment of CDMA-based solutions
    as all the concerned parties had to set up their manufacturing units in
    India. Plans were to deploy 1,00,000 VPTs in the country, but BSNL was able
    to deploy around 34,000 VPTs only.

  • The January IS-95 CDMA-based WILL system was for rural
    telephony. The total order was worth Rs 1,800 crore. LG bagged half of the
    order while the other half was shared between HFCL/Hyundai and Lucent
    Technologies. BSNL plans to cover 1,43,000 VPTs this year with WILL.

  • On the broadband side, BSNL/MTNL which had begun
    deployment of HDSL systems in 1999-2000, completed the deployment of close
    to 1,050 systems, at an estimated cost of Rs 17 crore.

New Projects

  • BSNL and MTNL installed ATM switches in Delhi and
    Bangalore, and by the first half of this year, they will commission ATM
    switches in Mumbai, Chennai and Calcutta.

  • Phase-I of the Sanchar Sagar project was completed in
    August 2000. The project was conceived to provide National Information
    Infrastructure connectivity for the National Internet Backbone and bandwidth
    on demand. Phase-I of the project covers a route length of approximately
    17,000 km and provides ten very high speed 2.5 Gbps capacity rings,
    connecting thirty-three large cities all over the country including major
    state capitals. A significant part of Phase-II of the Sanchar Sagar project
    too, was completed. Phase-II of the project, when completed, will cover a
    route length of 36,000 km on thirty-two rings of 2.5 Gbps capacity
    connecting 150 cities. The Phase-II project is at an estimated cost of Rs
    257 crore.

  • The VoIP tender that DTS had floated in May 2000,
    however, was scrapped. The tender had generated a lot of interest and as
    many as eighteen companies had bid.

New Infrastructure Providers

  • The cellular service providers went ahead with network
    expansions to meet the surging demand. However, the new deployment remained
    restricted to base stations and microwave radios. Few went for new
    technologies. The only two service providers who announced plans to move
    ahead of GPRS were BPL Mobile in Mumbai (with Motorola technology) and
    Bharti Cellular in Delhi (with Ericsson).

  • Thanks to regulatory hurdles, the new infrastructure
    providers, particularly in fixed services, have hardly made a beginning. By
    March 2001, an estimated total of 2.2 DELs have been provided by all the
    private service providers. The government had earlier projected 52 lakh
    lines by 2002 by private fixed service providers.

  • Thanks to the delay in network roll out, most fixed
    service providers are deploying broadband networks right from day one to
    target corporate customers. All fixed service providers went ahead with
    aggressive broadband plans, especially Tata Telservices, Hughes Tele.com and
    HFCL Infotel, Bharti Telenet and Shyam Telelink are also combining broadband
    with wireless. With both narrowband and multiple broadband technologies co-exisiting,
    aggregation and access management platforms are being deployed by many
    operators. Unisphere and Lucent have emerged as the major players in access
    platforms.

  • Apart from the fixed service licensees, a few of the ISPs
    also built broadband networks in selected metros. Mumbai is at the forefront
    in the deployment of metro networks with companies like BSES Telecom, Tata
    Power, India Online Network, Hathway Cables, In2Cable, and Zee Interactive
    rolling out their metro networks. Tata Power made news by signing the first
    DWDM deal in India with Sycamore. HFC is what most companies have gone for.
    In2Cable, Zee and Spectranet are building OFC backbones in Delhi. Bangalore
    has In2Cable and Zee building HFC networks. On the DSL access front, Dishnet
    leads with as many as 11,000 subscribers hooked on to it through DSL in
    Chennai, Bangalore, Mumbai, and Delhi.

  • The other area besides broadband that is seeing a lot of
    action is long distance. The year 2000-01 was the year of preparation. Ducts
    were laid by companies like Reliance Infocom, Bharti Telesonic, and a number
    of local service providers throughout the country. An estimated amount of
    12,000 route kilometer of OFC has already been laid by all the companies put
    together. This excludes the OFC infrastructure of the cellular service
    providers. Andhra Pradesh, Karnataka, and Tamil Nadu, Gujarat, and parts of
    Maharashtra saw major deployment of OFC, along with the metros Delhi and
    Mumbai.

  • Though a lot of companies laid ducts for long distance,
    only a few have laid fiber and fewer still have decided on equipment. One
    exception is Bharti Telesonic, which has already finalised SDH/DWDM
    equipment for its network.

  • The utilities, after planning for a couple of years,
    finally went ahead with their plan to build the network. PGCIL floated a
    tender to buy Rs 110 crore of SDH and DWDM equipment while GAIL floated one
    to buy equipment worth Rs 40 crore. The suppliers are yet to be decided.

  • International bandwidth is being created by private
    players with projects such as i2i cable network, a joint venture between
    Singapore Telecom and Bharti Global; and South East Asian Cable Network (SEACN)
    by Dishnet DSL. Dishnet DSL will offer a bandwidth of 2.5 Tbps whereas
    Bharti Singtel JV will offer 8.4 Tbps.

The Forecast

  • With new licenses issued to the fixed services providers
    and likely to be issued to the fourth service providers, there will be a
    number of new service providers. This is likely to create a big market for
    the equipment vendors. The fixed service providers together are supposed to
    spend an estimated Rs 10,500 crore and the cellular service providers are
    likely to spend around Rs 3,300 crore. How much of that is actually decided
    this year, remains to be seen. But even if they spend about 25 percent this
    year, it is still a huge market.

  • Bharat Sanchar Nigam Ltd (BSNL) alone is planning to
    spend Rs 16,500 crore on equipment purchase. This will go towards switching,
    SDH and DWDM equipment, DLC, IS95 CDMA, GSM, and CorDECT systems, and
    optical fiber cables. Other new technologies like DSL and broadband access
    platforms may also account for a small percentage. BSNL is also likely to go
    for network management system this year or early next year. All these
    figures are exclusive of MTNL figures.

  • A lot of companies who have laid duct will blow fiber and
    put active equipment. While it is difficult to believe that IP directly over
    DWDM will actually happen, most companies are likely to go for SDH. Bharti
    Telesonic, Reliance, and the BPL-Tata-Birla consortium, will be the main
    buyers.

  • Some action is likely to happen in the metro network
    front, with broadband aggregation and access management platforms likely to
    see the maximum growth.

  • Some of the existing fixed service providers are likely to experiment with
    VoIP switches and softswitches, but the market is not likely to take-off
    this year.

V&D 100 Equipment Companies

 

V&D
100 Equipment Companies
RankV&D 100
Companies
Turn
over 
(in Rs Crore)
4ITI2,184.97
8Lucent841.3
13SPCNL*625.84
15HTL525
5HFCL*416.38
10Cisco*233
36Shyam Telecom200
41Alcatel188
50Fibcom154.1
52PCL147.1
66BEL116
39CG Digital*122.2
48United Telecom*115.2
353Com*108
 Total5746.89

Leave a Reply

Your email address will not be published. Required fields are marked *