Broadband growth to drive high-end technology

For, with the government and various telecom service providers hitting the market with broadband services, these high-end technologies may become part of every household in the next couple of years.

IPTV provides viewers with choices that include video-on-demand (VOD) and digital video recording (DVR). Whereas the triple play convergence offers voice, video and high-speed data on a single device, which means one can get cable television, high-speed internet and internet-based phone services all through a single cable.

Boston-based Analog Devices Inc, which manufactures, designs and markets integrated circuits used in signal processing applications like these, sees great potential in the Indian market in the near future.

Analog Devices has a product development centre in Bangalore besides a design centre in Hyderabad.

Speaking to Business Standard, B Reddy Penumalli, managing director of Hyderabad Design Centre, said, "The rapid deployment of broadband services, coupled with privatisation of the telecom sector, is bringing in potential opportunities for us in India. We see a rapid development of this market in the near future."

Analog Devices currently employs around 140 people at its Hyderabad centre and is looking at doubling the number in the next three years.

"We do not want to ramp up our numbers in haste as there first needs to be a growth in demand for these products. With the increasing penetration of internet and broadband, we expect such a revolution to take place soon," Reddy said.

According to a report by market analyst Gartner, while China has 21 million broadband users, India has just 0.4 million users (January 2005).

Therefore, a large part of Analog Devices' revenues come from China, apart from North America and Europe. Still, Analog Devices is optimistic about Indian market for the simple reason that while the Chinese broadband market grew by 100 per cent in 2003-04, India recorded a growth of 236 per cent, as reported by Gartner.

Another reason which makes Analog upbeat on the Indian market is that the cable connections are also on the rise and have crossed the 45-million mark in India. Households that use cable connection are potential users of set-top boxes for IPTV.

This apart, sales of PCs have also increased by 34 per cent in 2004, which again is a key driver for the growth of broadband penetration in India.

Reddy, however, says that for actual penetration of IPTV, triple play convergence and IP set-top boxes in India, the cost of broadband has to come down.

"Nonetheless, we are sure that within a year's time such concepts will become a part of at least the high-income bracket families in India," he added.