Segments: Transmission Equipment: Private Up, Incumbent Down

It was not a great year for transmission vendors. Though private operators
gave large orders, the same was missing from incumbents. In terms of revenue,
the transmission equipment market in FY 2005-06 is estimated at Rs 645 crore, a
drop of around 12% from last year's figure of around Rs 730 crore.

The year started with lot of plans both from private operators as well as the
incumbent operators but BSNL's and MTNL's large tenders did not fructify.
But things are looking rosy now with the coming of a mega 3G tender for
incumbent operators.

On private operators front, Bharti, Tata, VSNL and Hutch had done lot of
network expansion, whereas in Reliance Infocomm, the focus was more on
restructuring of the businesses.

The negative growth has also upset lot of players. In SDH, ECI Telecom is the
clear leader, whereas in DWDM, it is Alcatel.

Companies such as Nortel that occupied the number one slot for a long time
had to vacate it for ECI Telecom. ECI Telcom has done pretty well in the SDH
space, thanks to the large contracts it bagged from Bharti, Hutch, Tata
Teleservices (rural coverage and expansion in telecom circles) and VSNL (both
national as well as international). Very strong in the private operator space,
ECI has also bagged orders for expansion of Gailtel South network.

ECI was the first company to launch MSPP in the country. ECI has been
launching 3-4 releases every year, thereby increasing features for all their
boxes. To further strengthen its R&D portfolio, the company has opened an
R&D center in Mumbai.

Alcatel occupied the number two slot, thanks to its exceptional performance
in the DWDM space. The company bagged large orders from Bharti and Tata.  

Nortel was placed at number three, as the company did not receive large
orders from either Bharti or Reliance-its two key clients in transmission. In
the last fiscal, the company bagged expansion deals from Bharti, GAIL, and
Reliance Infocomm.

In the incumbent space, companies such as Siemens, ZTE and
Tejas have done fairly well with whatever limited expansion deals announced last
year by incumbent operators. Recently, Siemens has bagged STM-16 orders from
BSNL. Tejas also expanded its Bangalore facility that houses R&D, optical
networking labs, and an advance customer training center. Plans are also afoot
to increase its existing staff by around 100 people. Traditional players such as
WRI, Fibcom and Tellabs, have not done well and are getting a good fight from
players at the top.         

Last year also witness the arrival of new companies such as Orion in the
transmission space. In this fiscal, the company has bagged STM-1 deal from BSNL.
We might see even Ericsson doing well in the next fiscal now with Marconi coming
under its fold.

The outlook for the transmission equipment industry is good and it is
expected to grow by around 20-30% in FY 2006-07, as both BSNL and MTNL are
talking big in this fiscal. Even Tata is talking about its rural focus, whereas
for Hutch and Bharti, it is expansion in East and North East. Reliance Infocomm
is not to be left behind, and the company has given large orders to Marconi (now
Ericsson).   

Pravin Prashant

pravinp@cybermedia.co.in