Industry expected to grow at 20.5% CAGR till 2013.
The structured cabling market in India is set to reach Rs 1,167 crore in 2008, of which cabling requirements for the corporate datacenter alone will comprise Rs 195 crore, according to research firm IDC.
The market, which comprises copper and fibre cabling solutions, will record 20.5 per cent CAGR until 2013, led by high growth in the datacenter segment, according to an IDC market study. IDC India network infrastructure analyst and manager — communications research Surjyadeb Goswami said the datacenter market segment alone comprises 17 per cent of the total cabling market presently.
Clocked at an estimated 47.7 per cent CAGR over the next five years, the datacenter segment will command a market of Rs 1,373 crore — 46 per cent of the total structured cabling market — by 2013, Goswami said.
“Demand in the datacenter segment will be fuelled by telecom, IT/ITES industries and BFSI, which have traditionally been strong growth areas for the structured cabling market in India,” he said.
According to IDC’s inaugural tracker for the structured cabling market during the January-February-March (JFM) quarter of 2008, shipments of structured cabling solutions, comprising copper and fibre cabling solutions, crossed Rs 285 crore. Copper cabling accounted for around 83 per cent of overall shipment value, while fibre cabling brought in the rest.
IDC expects the Cat 6 cable category to clock revenues of Rs 365 crore in calendar 2008, followed by Cat 5e at Rs 146 crore.
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However, many small and medium enterprises in India still prefer to go with Cat 5e cables. Cat 6 cables are expected to edge out Cat 5e, recording CAGR of around 22 per cent, thereby growing from Rs 365 crore in 2008 to Rs 977 crore in 2013.
According to Milind Tamhane, vice-president — manufacturing, D-Link India, optical component prices have decreased considerably and fibre optical distribution networks have become more viable for the Indian enterprise. “Fibre optical networks can accommodate bundled services and have relatively lower fixed costs compared to conventional copper cable systems,” Tamhane said.
While Cat 6A and Cat 7 have witnessed growth in some pockets and niche segments, Cat 7, a ‘shielded twisted pair’ (STP) category, is yet to gain momentum, as there is yet not enough widespread preparedness or demand for STP cables in India.
STC cables employ metal shielding over each pair of copper wire, and are less prone to various type of interferences and cross-talk. This makes them more suited for environments with high electromagnetic fields.
Deepak Kumar, general manager — communications research, IDC India, said, “The Cat 6A market is picking up because of high bandwidth requirements, especially in datacenters and enterprises where high-speed data transmission is required for mission-critical applications.”
IDC also noted that pressed with shorter delivery cycles, business enterprises are increasingly turning to Cat 6A for datacenter cabling to run their mission-critical applications seamlessly.
Major verticals for the market this year have been IT, education, government, manufacturing and banking, financial services and insurance (BFSI). BPO and other IT-enabled services are other segments with strong growth potential. “As enterprises are expanding their operations to new destinations, cabling growth has primarily come from B and C class cities, in the more recent past,” Goswami said.
SOHO, class B and class C cities, housing complexes and residential cabling are expected to be other new avenues of growth, besides scores of new global entrants in retail, healthcare and hospitality segments.
“Trends in automation software development, consolidation, virtualisation, cluster/grid computing, service-oriented networking and ‘green’ power will improve manageability, and realise better application delivery for the business, which today’s networks are gearing up to fulfill,” said A Sitaramaiah, director - Sales and Marketing, Fluke Networks India.
“The demand for intelligent cabling which enables proactive network monitoring and fault diagnosis will get a boost with many telecom companies likely to implement 100 per cent intelligent cabling solutions in their datacenters,” Goswami added. Intelligent cabling will be spurred by demand for high bandwidth rising and applications like videoconferencing, high-definition graphics, IP telephony and multimedia gaining usage.
A key inhibitor for the Indian structured cabling solutions market, however, is rising copper prices. Overall spends on structured cabling in 2008 are also expected to be affected by the ongoing slowdown in the US economy.
Industry observers also point out the lack of trained and qualified personnel to conduct quality installations, which can have a direct impact on services delivery.