Datacom Equipment Market to cross Rs 6,200 crore by 2006: IDC

In the year 2001, the networking segment was a savior of the hardware sector and fared better as compared to other hardware categories — where the markets were stagnant or declining. In 2001, Indian data communication equipment market grew at a rate of 20.8% to reach Rs 1907.37 crore and according to IDC estimates the market is expected to touch Rs 6248.59 crore by the end of 2006. IDC expects the Indian data communication equipment market to grow at a CAGR of 27% over the next five years. The data communication equipment market also faced pressure in 2001 and growth was inhibited due to exiting of various ISPs from the business on the account of pressure on margins and a sharp fall in demand from the software sector. However, respite came from the banking and finance segment that went for complete networking and interconnectivity drive amongst its branches. This trend is expected to continue in the year 2002 also.

At present the LAN equipment segment is the largest contributor to the total data communication equipment market, which contributes 51.6% to the data communication market and it is expected to remain nearly the same. The LAN equipment market (NICs, Hubs, Routers and switches combined) grew by 22% to touch Rs 984.4 crore during the year 2001. This market is expected to grow at a CAGR of 32% till 2006. Within LAN equipment segment, switches were the biggest contributors to the revenue. The WAN equipment segment contributes 35.1% to the total data communication equipment market. WAN equipment market grew by a modest 16% in the year 2001. The WAN Equipment market saw a sharp decline in the revenue growth on account of non-buying from the ISP segment and various ISPs moving out of business. The growth in the WAN equipment segment is expected to be slower, due to slower rate of infrastructure development.