INFRASTRUCTURE: A Ductile Business

Did you hear this–the duct manufacturing and laying business is going to be
bigger in India than in China?

How come? Everyone thought that China was the bigger market, despite India’s
high growth rate…

Well,
David Corey, president, Dura-Line Inc, who’s been looking at China closely,
explains why. "Most of the economic spend in China is along the
eastern coast… and that’s not a big geography," he points out.

Is that the reason why Dura-Line is turning much of its focus towards India?
"Oh yes," Corey’s is happily open about it. And the frequency of his
India visits–he makes it a point to fly to India at least every 10 months–only
confirms his admittance.

The Party’s not Forever…

Service providers have been on a duct-laying spree for the past three years
or so. Bharti was among the first companies to start the phenomenon. In fact,
Dura-Line India was set up as joint venture with Bharti, in 1997. (The JV was
over in 2000.) So until the previous year Bharti remained the largest customer
of Dura-Line.

Things,
however, have changed with the bulk of Bharti’s infrastructure in place. The
company has laid more than 18,000 km of OFC, out of a planned 24,000 km.
Naturally therefore, Bharti today accounts for only 20 percent of Dura-Line’s
revenues.

But before Bharti would cease to be a revenue source, Tata-VSNL appeared on
the scene with their infrastructure plans.

These days, they are busy doing what Bharti did earlier–building a
countrywide fiber optic infrastructure, for their domestic long distance (DLD)
services. So duct laying is in full swing by Tata, which is giving Dura-Line 50
percent of its revenues now.

After that? "Well, we recently bagged a Rs 15-crore BSNL contract. And
we hope to win more such orders in future, as the state-owned operators like
BSNL and MTNL become more and more conscious on the quality front," Vijay
Kiyawat, managing director, Dura-Line India, tells optimistically.

And when BSNL’s fiber infrastructure too is in place?

Well, the question doesn’t give Corey and Kiyawat a shock. Probably, they’ve
already pondered over it. "The business is not going to remain big within
five years from now. Bulk of the fiber optics infrastructure in India would be
in place by then," Kiyawat spells it out.

How Long Will the Party Last?

For those who think they are through once the ducts have been laid, the
party ends after five years. But for those who are willing to climb up the
value-chain, it doesn’t. After all, duct laying is only a small part of the
infrastructure deployment operation. OFC splicing is the next, among a host of
other tasks. And even when the deployment is over, the services business will be
there. But more about the services later…

Let’s first look at the composition of the duct manufacturing market in
India.

The served market for ducts today is approximately 100,000 km. There are a
large number of players including Dura-Line, Pioneer Polyfeb, Jain Irrigation,
and Reliance. There are also about 40 players in the small-scale sector.

Dura-Line, given the backing of a global engineering and R&D facility,
has managed to grab a market share of more than 40 percent. Moreover, telecom
duct manufacturing is a dedicated activity for Dura-Line, whereas for most of
its competitors it’s a telecom-too affair. This has helped the company become
a preferred supplier for some of the leading private telcos.

All said, the duct market has a declining trend, and a player must think of
more than just technology and quality for survival and growth. What’s Dura-Line
doing to cope up with negative market dynamics?

Cable Jetting–The Push Advantage
As against the conventional method of pulling the cable into the duct using a rope, the jetting technique uses a mechanical feeder to push the cable into the duct. A powerful airstream, generated by a compressor, is used to guide the cable through the duct. This technique has distinct advantages:
	The cable is not subjected to stress encountered in the conventional methods
	This significantly prolongs the life of the cable
	In pulling, the force on the cable actually pulls it into hidden bends
	An exponential frictional force is created which further stresses the cable
	Long cable lengths are not possible with pulling. (At a demonstration conducted by Dura-Line, 1 km length of cable was successfully jetted, in approximately 20 minutes.)

"Well, we’ve worked out a simple yet effective formula. We say that
every year, 15 percent of out sales must come from new offerings. This helps us
fight declining market trends and find new revenue streams," Corey reveals.

This partly explains how Dura-Line started looking at the OFC splicing,
termination, and link testing services, including supply and installation of
allied accessories like joint closures to cover the network implementation
phase.

The company is also carrying out OFC characterization for network planners to
provide them greater flexibility in the choice of network equipment. And later,
by the time most of the optic fiber network in the country will be up and
running, Dura-Line plans to be deeply into network maintenance. This market is
estimated to be Rs 100 crore as of now, and is largely a green-field domain.

Is There a First-mover Advantage?

Much of the hope for this new market rests on the assumption that service
providers will like to outsource the network maintenance part. And if that
happens, Dura-Line thinks it will make hay. What about the small-scale
competitors who will sprout up as soon as the market becomes visible?

Kiyawat seems to have the answer, "A service provider will think at
least a hundred times before outsourcing maintenance of his network, because
that’s the lifeline of his business. A major collapse can do irreparable
damage to him. So he will give contracts only to those who have excellent
understanding of the network. And here, we’ve got a clear edge."

Dura-Line plans to gain the lead by leveraging two things. One, a high level
of familiarity with the installed networks, across various service providers,
which comes from its has involvement during the duct laying phase. Two, of
course, is technology.

Mindshare, the Training Way

Of late, service providers have begun to realize the importance of best
practices in duct laying, splicing and other operations.

A cursory look at just about any duct and cable installation site will reveal
the shoddy quality of work and lack of professionalism in work practices. There
is a crying need to raise the level of awareness about the proper installation
of a future-proof fiber optic network. Considering the fact that once laid,
ducts are supposed to have a life of 50 years, field practices related to laying
of duct and installation of cable need to be toned up. Just as a sound and
enduring superstructure requires a strong solid base, the same way a long-life
reliable network can only be built on a properly installed duct and cable
foundation.

The problem is not with the equipment or the tools. The problem is one of
using them properly, of awareness, discipline, and training.

It is in this backdrop that Dura-Line has set up an academy–the Dura-Line—Plumettaz
Academy–for training the likes of project managers and site engineers in the
service provider and the contractor communities.

The purpose of the academy is to improve the quality, versatility, and life
of fiber optic networks through the promotion and employment of best practices
and most advanced techniques for telecom duct laying and cable installation. The
academy-certified engineers will help bridge the gap between the technology that
is available and its full absorption and implementation in the field.

Ashok Kapoor, director, Plumettaz Academy, says, "Programs offered at
the academy will help develop a pool of certified and qualified people in this
important area of infrastructure development. The method of instruction will
cover best practices, both in the classroom and hands-on in the field, through
simulation of various field hurdles in the land adjacent to the academy
building." Kapoor has been the man behind the setting up of the academy.

Prithipal Singh, CMD, BSNL, who inaugurated the academy, located in Goa, was
quite appreciative of the idea.

Dura-Line’s biggest customer, Tata has shown keen interest in the programs
being offered by the academy. It will have each of its contractors send one
person each for training. "Other service providers, including some overseas
ones, will also be sending persons for training," Kiyawat informs. It is
learnt that BSNL too is interested, as none of it’s training centers are
currently equipped with the hands-on training facilities being provided by the
academy.

With the setting up of the academy, Dura-Line has made a smart move. It will
help the company grab a larger mindshare in the service provider space, and,
create a following in the project managers and engineers community. All, of
course, only if the programs continue to be of high quality and dynamically
adapt to the needs of a variety of field problems.

The academy apart, Dura-Line is also getting ready with newer breed of
products, to cater to last-mile broadband and campus network installations. It’s
already come out with the microduct line of products for the purpose.

Deepak Kumar