Enterprise Equipment: WLAN: Heating Up

During the last financial year, WLAN was governed by the need for round the
clock connectivity for enterprises, irrespective of location. According to V&D
estimates, the WLAN equipment market stood at Rs 150 crore in FY '06-07 as
against Rs 104 crore in the previous fiscal

Cisco's revenue registered a growth of 46.7% to touch Rs 66 crore, and it
retained its number one position. Cisco's major customers were Reliance
Communication, Idea, and Infosys. Maintaining and conforming to international
security standards were main reasons for Cisco's performance.

D-Link was unchallenged for its second position. It registered revenue of Rs
31 crore, and sold a total of 91,000 units as compared to 40,000 units in FY
'05-06. Their major customers were IIT Kanpur, IIT Rorkee, BHU, and Department
of Post (AP).

Netgear also retained the third position with an impressive growth of 88.9%,
and its revenue was Rs 17 crore.

Dax registered a growth of 50% in its revenue. It introduced outdoor wireless
solutions that can deliver up to 45 kms at throughput levels of 20 Mbps and its
R&D was in a process of completing the latest 11n standards.

Growth Factors

One key factor that has lead to wireless adoption is growth of the
notebook PC and broadband in the small business sector. Small businesses look at
WLAN, because it does not restrict a businessman to a limited place, as it can
facilitate Internet on a mobile device. Mobility is another important driver for
the WLAN equipment market, and the flexibility to access and communicate through
the network in public places has resulted in greater adoption of WLAN. Falling
prices of notebook PCs, and broadband connectivity have provided further impetus
to the growth of wireless in the small business segment. Among the various
standards, the dual frequency 802.11g standard has contributed largely to
revenues in the WLAN market in 2005. There has also been growth in the number of
hot-spot zones across the country, especially in the metros. WLANs have gained
popularity in a number of verticals like hospitality industry, academia, and
public places.

Hurdles

Wireless LANs are prone to security threats, with increased incidents
of unauthorized access, breaking of encryption, and loss of data integrity.
Except some of the leading players who have stressed a lot on security concerns,
other vendors have not been able to incorporate foolproof security based on
accepted security standards. As a result, security continues to be a major
hurdle.

Outlook

With small enterprises acknowledging the positive impact WLAN can
have on their business, this segment is predicted to grow significantly. Another
factor to watch out for is the government's rural connectivity targets, and
reduction in prices of mobile devices. Both will increase the subscriber base,
which will help this segment grow.

Sandeep Budki

sandeepb@cybermedia.co.in