CARRIER SWITCHES & WIRELESS EQUIPMENT: Wireless Equipment

Unlike last year, when V&D 100 calculated the wireless switching
component and RF component separately, this year we have followed the market
trend, which is towards bundled prices. The total market size of wireless
equipment, according to V&D estimates, was Rs 5,600 crore. This includes the
costs of MSC, BSC, and BTS components but does not include the ancillary
infrastructure equipment such as towers and their turnkey cost.

Ericsson with successes in both BSNL and private operators front emerged as
the No 1 company in wireless equipment. Apart from two orders from BSNL, it won
its maiden CDMA wireless infrastructure deal with Tata Teleservices worth $150
million, for the latter's Tamil Nadu and Karnataka circles. In GSM, it is the
established No 1 company. Lucent and Motorola were almost evenly positioned. The
big order and the sole equipment vendor status for Reliance helped Lucent but it
suffered as it decided to get out of the GSM equipment market, thereby losing
two customers, BSNL (West) and Escotel. Motorola, while doing well on the BSNL
GSM front, also deployed CDMA network for Tata Teleservices in Maharashtra,
Gujarat and Mumbai. Nokia had to be content with repeat orders from its
traditional private customers, Idea and BPL. Nokia is not into CDMA
infrastructure. Siemens, though it was a marginal player, got some orders from
Escotel.

While we have not tried to separate the switching and RF component, the
switching part in the new networks have been significant. Assuming that even 40
percent would have come from switching, it works out to be Rs 2600 crores,
almost ten times of the fixed line switching market.

India is fast taking to wireless and that has helped companies with strong
wireless component in their business. Traditional switching major Alcatel is not
even in picture in this, though it did manage to forge an alliance with ITI for
supplying switching equipment for BSNL's GSM network, it still has miles to
go. So has Siemens, though its strong relationship with Bharti has helped it in
bagging major orders. Ericsson, on the other hand, has emerged stronger. Nokia
has not been able to reach out to the top three operators in India-BSNL,
Reliance, and Bharti-and hence is still a little behind.

Also, the outsourcing deal signed by Bharti with Ericsson has heralded a new
era, taking the services revenue in the equipment business higher. Ericsson,
once again, has become a trend setter and is expected to gain a lot from its
pioneering effort as it did from its undiluted thrust on wireless. The company,
that was once a vocal opponent of CDMA has decided not to be dogmatic about it
and has embraced. It has already started making its mark in this fast growing
technology segment and is likely to consolidate its gain. In many ways, Ericsson
has not just been the leader in market share but has acted like a true leader.

Wireless has so far held back the marching ahead of IP. It remains to be seen
whether IP adapts to wireless faster or wireline broadband emerges faster which
can give back IP some market share.

Shyamanuja Das