Historically, the large infra companies have been pecking the order of telecom vendors. However, due to unprecedented growth in the mid and premium Smartphone segments, the total value contribution has gone up. At the same time, as the operators are not investing for expansion at a pace at which the Indian telecom industry is capable of, the contribution of core telecom infrastructure like carrier infra and towers is shrinking at the moment.
5 of the top 10 telecom vendors across all categories, are from the user devices segment – Smartphones and Tablet PC. The predominant segment being Smartphones. These 5 companies amount to 65% of the revenue contribution of Top 10 vendor companies and 38% of all the telecom vendors in India. These contributions are up by 7% and 9% compared to previous year respectively.
Although, Samsung still led the overall vendors leaderboard registering revenues of Rs 44,329 crore, up 9% compared to previous year, the exponential growth of Xiaomi makes it the star performer. Xiaomi moved from 10th rank in the previous V&D100 edition to rank at 2nd place in this edition of V&D100. Xiaomi posted revenues of Rs 29,013 crore, up by 431% as compared to Rs 5,460 for the previous financial years.
Other than user devices companies, the segments from where the industry found its top vendor companies included tower, carrier infra and networking. Cisco, uniquely positioned to service telecom operators as well as the enterprises in networking continues to be the undisputed networking giant, while Nokia strengthened its position in the core & access and carrier networking businesses. In the passive networking segment, ATC started to reap benefits of Viom acquisition, registering a growth of over 43% in revenues due to inorganic expansion.
Prima facie, it does appear that Nokia has tumbled down the ranking order. However, it is due to user device brands appearing on the leaderboard at stronger positions that has pulled down ranks of other leaders coming from other segments of telecom vendor companies. Many of these individual companies have grown in revenues as well as market share in their respective segments.
Assuming, with everyone in the ecosystem, starting from the government, 5G is finally a reality sometime towards the last quarter of calendar year 2018, the procurement of carrier and infra equipment for 5G could take place by early next financial year starting April 2019 after operators are done with their network designing and planning. This suggests that FY 2018-19 is also going to be skewed towards the user devices makers with most of them figuring in the top 10 vendor companies of telecom in India. However, financial year 2019-20, is expected to see the real action around 5G, where the majority of the investments would be primarily for 5G rollouts other than expanding the 4G Advanced networks across the country percolating to Tier 2 and 3 telecom markets in India.