Special Feature

January 25, 2006
A growth to be witnessed: T&M industry

Ujjwal K Dey

• Handset manufacturers are attracting many key global players to India;
• MNCs showing interest in India, shifting R&D bases here;
• It is a win-win situation for India and the MNC’s;
• T&M industry is on the move from analog to digital, even in areas like RF microwave;
• A major part of the growth in the T&M industry shall come from the telecom sector; and
• Global R&D houses are doing most of the sourcing of the test systems in India.

NEW DELHI -- After proving its prowess in the global software sector, India has taken up the challenge to do the same in the test and measurement (T&M) industry.

Courtesy globalisation, many MNCs are comi ng to India and pouring in large amounts of money to build R&D centers here. It’s a win-win situation for both - the MNC’s can choose from a large pool of highly skilled people and India receives much-needed funds to develop and run these R&D cent ers.

A part from the influx of MNCs with huge funds, the telecom sector has played an important role in the growth of the T&M sector in India.

For example, in India we are witnessing a churn, where customers tend to change handsets frequently, and every new handset comes with new features and technology - thanks to the R&D being undertaken at the behest of handsets manufacturers.

Gone are the days when we waited for new technology to arrive from the West. In recent times, India has shown the highest growth potential among Brazil, Russia, India and China (BRIC countries).

Consequently, the Indian domestic electronic industry has already attracted a fabulous amount of foreign collaboration and investment, and has also responded positively to the policies of the government.

The Indian government introduced policy measures such as the Electronics Hardware Technology Park (EHTP) scheme providing additional fiscal benefits to global manufacturers, which has prompted global giants like Elcoteq, Ericsson, LG, Motorola, Nokia and Samsung to set up manufacturing facilities in India. All these positive aspects provide a ray of hope for sustainable growth of the Indian T&M sector. Educational institutions also play a significant role by churning out a sizeable workforce every year for the T&M sector-obviating the need to look to the West for employment or R&D opportunities.

R&D on 3G handsets to continue

Speaking on T&M market trends, Shankar Roy Chowdhury, general manager, marketing, Test & Measurement Group at Agilent Technologies India Pvt. Ltd., remarked that in recent months, India witnessed robust growth, which was observed across all industry segments. Private participation in aerospace/defence commenced, and now with the telecom sector contributing to the development of T&M industry, MNCs are showing interest in India and are increasingly shifting their R&D bases here.

With the robust growth in subscriber base, handset manufacturing is attracting many key global players to India. While LG has commenced manufacturing, other electronic manufacturing services (EMS) companies have made announcements to follow suit. 2005 has been a year of announcements, and we hope 2006 will be the year when manufacturing really takes off in India!

Telecom service providers have also been investing in T&M. In the year gone by, both private and public sector telecom service providers have invested network deployment and upgradation tools.

Yatish Mohan, managing director and head of T&M in SAARC for Rohde & Schwarz India Pvt. Ltd., emphasised that during the last financial year, the telecom sector witnessed a tremendous growth in network expansions and shifting R&D activities to India. According to estimates, the T&M industry in India is expected to grow by over 15 percent in 2005-06, and the major portion of the growth will come from the telecom sector.

International companies like Elcoteq, Ericsson, LG, Nokia, Samsung and ZTE have announced manufacturing plans for GSM and CDMA handsets and R&D in third generation (3G) handsets will continue. In fact, we foresee R&D for fourth generation handsets as well from India. GSM, EDGE and WCDMA stack development will be on the increase. HSDPA, WiMAX and DVB-H are the focus for several companies in India.

Shankar from Agilent has been a pioneer as far as T&M technology is concerned. In recent months, Agilent has introduced state-of-the-art oscilloscopes (instrument that produces an instantaneous trace on the screen of a cathode-ray tube corresponding to oscillations of voltage and current) that meet an engineer’s measurement needs today.

In January 2005, Agilent was the first to break the 10GHz bandwidth barrier by introducing of the industry’s first 13GHz bandwidth digital real-time oscilloscope with matching probing system. Later, it introduced the industry’s first portable oscilloscope series with bandwidth up to 1GHz. With a real-time display update rate up to 30 times faster than competing models, the Agilent 6000 Series scopes provide much needed insight into root cause of a bug or failure, thereby dramatically reducing design verification and debug time.

In April, Agilent introduced a series of new entry-level digital storage oscilloscopes (DSOs), DSO 3000 Series. It now has a wide range of scopes for the demanding needs of today’s design engineers.

Asia is assuming a greater role in shaping technology. Recognising this, Agilent recently formed a separate Asia Industry Business Unit, focused exclusively on the Asia market. Also, the world’s largest T&M factory is now located in Asia. Innovation is the core of technically advanced products and solutions. Consequently, 12 to 13 percent of Agilent’s turnover is allocated for R&D. The company’s ongoing strategy is to be a premier provider of customer service and network assurance solutions for telecom carriers worldwide. Agilent is in the process of relocating the development of a flagship product of the company’s operational support system group (OSSG) to India.

Rohde & Schwarz has decades of T&M experience, and is a renowned international manufacturer of highly reliable and precision test instruments in wireless communication. Time and time again, the company has developed pioneering and reference solutions in general purpose, mobile radio, sound and TV broadcasting segments.

High-speed precise measurements gaining momentum

Shankar feels the trend in India is no different than the global trend. Most of the technologies, be it in transport, switching, routing or in applications, are now the same in India and other developed counties. Mobile operators are adding new features on the 3G side, while landline operators are seeking major penetration in the broadband market.

With time-to-market becoming more critical for these services, testing also needs to be more advanced and fast so that the test time is reduced. The test tools required to enable new technologies must be at par with the ones being used in developed nations. With India emerging as the R&D hub in software and hardware, specialised high-speed precise measurements are gaining momentum.

Moreover, the manpower pool in India is no longer the traditional database software type. It is more of the technical network management, application encryptions and software optimisation type, and it is witnessing new openings for T&M business in India. All the technologies that are being developed or deployed in India are at par with global standards.

India recognised as huge electronics market

According to Shankar, most of the segments in the T&M industry in India are seeing major growth. With government spending more on security, aerospace and defence, there is tremendous need for high-precision and quality measurements in these areas. This is providing a major impetus to the electronics measurement industry in India.

In recent years, there has been exponential growth for mobile operators and broadband service operators. With many of the mobile handset and equipment manufactures establishing manufacturing in India, the large test and automation requirement in this segment will be further fuelled in the coming years.

This is in addition to the operator’s current requirements of installation, maintenance and optimisation test instruments.

Test requirements in R&D are growing. Global R&D houses are sourcing most of their requirement of test systems in India.

All in all, India is being recognised not only as an R&D pool but also a huge electronics market, and this coupled with government spending on projects of national interest, is enabling the largest ever growth the T&M industry has ever seen.

Yatish predicted: “During the next five years, India will be the fastest growing telecom market. The mobile subscriber base will grow to 350 million, which will force telecom operators to go for infrastructure investments.

From a global perspective, 30 percent of the additional global wireless subscribers over the next five years will come from India. Therefore, we too see a great future for the growth of the T&M industry in India. Telecom R&D and production are the main segments where demand of RF, microwave and base band T&M equipment will grow substantially.

Innovation necessary to build customer confidence

Commenting on the challenges ahead for the T&M segment in India, Shankar added that to manage the cost of telecom networks, service providers are reacting negatively to every cost input, and compromising on the quality of tools being used. This trend needs to be arrested immediately so that networks continue to deliver quality service.

As customers become familiar with technology, they would become more demanding and the only way forward for service providers is to improve QoS.

Shrinking life cycle of devices, components and hardware platforms provides a challenge to the vendors of test instruments to provide longer support, which is preferred by customers.

Yatish emphasised that standardisation is taking place, and T&M instruments are becoming quite comparable to each other. The winner has to differentiate by providing superior support in services, calibration, application and training. One could also provide additional services such as test programming, software tools, as well as consultation on how to optimise the test plan / development time.

Global networking is becoming extremely important since design / production companies have bases set up in the US, Europe as well as in Asian countries.

Major purchase decisions are often influenced in consultation with important people at several locations. Finally, decisions by these global key accounts are based not only on data sheet or price, but by also benchmarking a vendor on several parameters.

PC-based instrumentation yet to catch up in India

Continuous improvement on the T&M vendors’ support processes is becoming necessary to build customer confidence. All Rohde & Schwarz subsidiaries, including in India, are geared to support the service needs of global telecom buyers. Their service centers, around the world are monitored and periodically audited by qualified auditors from their central services headquarters in Munich.

Calibration of test equipment is another area where customers expect T&M vendors to support them. This can be quite a challenge for those T&M suppliers who do not have adequate facilities in India. R&S is geared to take care of this customer need.

One of the key trends being witnessed in the T&M industry of late is the move from analog to digital even in areas like RF microwave. PC-based instrumentation, that is the norm in foreign shores, is yet to catch up in India. There is quite a bit of commitment to deploy MPLS-based technology across networks because, in future, networks shall be IP-based to provide good quality transmission.