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Indian Fixed broadband Access Equipment Market
Knowledgefaber, May 2011, Pages: 62
As more and more Indians demand internet access, the ISP market is witnessing tremendous growth in the number of subscribers. As a result the demand for the network equipment and consumer premise equipments bought by ISPs is growing. So what is driving the consumer demand? It is the increased use cases for consumers such as email, messaging, website browsing, tickets and e-commerce and other drivers such as cost of broadband going down, and amongst other drivers cost of government initiatives to drive broadband.
However there are some demand dampers as well such as lack of adequate spectrum and lack of future proof infrastructure, supply of CPE’s, poor PC penetration, and maintenance of infrastructure.
However, overall Fixed Broadband market is expected to grow from 10.3 million in 2010 to approximately 49.3 million subscribers in 2015. This includes the four technologies used by ISPs to deliver broadband, namely DSL, Fiber (FTTH, FTTC, vDSL, others), Cable and Others (Unlicensed Wimax, Wi-Fi, leased lines and Ethernet, etc.). The newer segments such as Fiber have started picking up. We are currently tracking Beam fiber launch 10 Mbps speed on fiber in Hyderabad and Act Broadband has been launched with 5 Mbps speeds in Bangalore. The demand that they are witnessing shows positive signs for Fiber growth in India. BSNL has started FTTH service in selected cities like Jaipur, while MTNL has also started FTTH service in selected circles of Mumbai and Delhi.
While the technology for ISPs to deliver internet services that will have the lion’s share will remain DSL but Fiber, Cable and Others are also expected to grow as players launch and market these services better. Another observation by the industry is that close to 50% of the laid copper infrastructure is expected to be inadequate to transfer data in the future.
In this study we have estimated the demand for various kind of equipment and CPEs namely DSL Modems, and DSLAM’s for DSL technology; Cable Modems and CMTS for Cable technology (Hybrid Fiber Co-axial); OLT, ONT’s, PON (GEPON/GPON, EPON), STM’s (1, 4, 16,64s), WDM’s (Coarse and Dense) for Optic Fiber technology, and Antenna’s and routers for Wi-max and Wi-Fi Technology. We have done this based on discussions with various players both demand and supply side and other experts in the market. We have done extensive modelling and validation of data with government bodies’ data, existing databases, as well as players in the market. We first estimated the growth of subscribers by various technologies for each player and then summed them up for each player and then for the entire market. We estimate that in the next 5 years, the total demand for all equipments and devices would be a cumulative total of 11.2 billion dollars and around 43 million units.
While the largest demand for equipment would be for DSLAM equipment, new categories like DWDM’s (and also a new variation CWDM), STM 64’s and GEPON would pick up due to FTTH technology, increased band width requirements for use cases such as Gaming, VOIP, IPTV etc.
The major players in the equipment market such as Huawei, UT Starcom, Alcatel Lucent and Tejas Networks would continue to hold major share. As per our research, top 5 ISP vendors account for more than 75% of the market. New players and players with lower market share should focus on both DSL and Cable modem technology involving component focus like DSLAM and CMTS which is expected to be in demand. Players with technological capabilities should focus on equipments like DWDM’s, CWDMs and STM 64’s. We also expect the entry or expansion of foreign players outside of big 5 as well.
We also expect this to have a huge ripple effect for Cat 5, Coaxial, DSL cable players and Fiber optic cable manufacturers. The ones at the forefront like Radius Infratel, Aksh Optifiber and Sterlite are likely to gain a lot. Radius Infratel won a contract with Ericsson to deploy FTTH solutions aimed to serve 6, 00,000 households and businesses using GPON systems. Sterlite also won optical Fiber contract from BSNL to lay 17,000 Km of OFC network to replace BSNL’S existing copper networks.
According to a report published by TRAI (Telecom regulatory Authority of India), the number of ISPs in India has gone down from 389 to 376 with 33 new applications for ISP licenses. It is clear that ISPs need to chalk out the right strategy for them. The opportunity is huge but the choice of technology, people, process, equipment can help them make or break. The opportunity is huge because the broadband subscriber base in India is expected to grow from 10.3 million in 2010 to approximately 49.3 million by 2015. As the equipment industry is mainly driven by increase in subscribers, the market for fixed broadband equipments is expected to increase by a CAGR of 13.6% from 2010 to 2015.
It is expected that a greater part of the demand is going to come from tier 2/3/4 cities. As an illustration, when we spoke to a senior level executive from a top equipment player, we got to know about a town in India which uses GPON/DWDM’s at the access side as 1 terabyte bandwidth required. This is incredible news for the equipment vendors. Also, with TRAI’s regulation to increase the minimum speed of broadband to 512Kbp from January 2011, the demand for optic equipments is expected to surge in near future.
Demand for high-end high bandwidth multiplexers is also beginning to grow. In one of the interviews with a equipment player it was stated that “ISP’s like Bharti Airtel and Reliance are beginning to order STM’64 at the access side instead of multiples of STM 16’s as they are expecting tremendous growth in broadband subscribers as these STM’ 64 installations would be a long term investment and reduce operating expenditures for ISP’s.
As per the comment by the service management head of another equipment players, there is tremendous growth opportunity in the 100 gigs segment in the near future.
These are all great news for equipment vendors and Knowledgefaber expects positive growth in this sector.
Fixed Broadband Access Equipment Market in India includes in-depth analysis (including key statistics, forecasts and insights) of:
- Detailed analysis of Internet service providers in India and their subscriber base, including Technology used & Geographic distribution
- Key Drivers and Inhibitors presently driving Internet service Providers in India including Regulatory changes
- Analysis and future growth projections of Broadband subscribers in India by Technology adaptation from Year’ 2011 to 2015
- Analysis and future growth projections of Broadband equipment in India by Technology and by players from Year’ 2011 to 2015
- Impact analysis & Opportunity assessment for 15 players across the ISP equipment market
- Recommendations for ISP’s on Market development, vendor selection, Sustainable competitive advantage and
- Recommendations for Vendors to target and develop business with ISP's
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