Wireless

November 24, 2005
A growth to be witnessed: T&M industry

Ujjwal Dey

NEW DELHI -- India, after proving its prowess in the software sector, has taken up the challenge to do the same in the T&M industry as well. It is with the blessings of the globalisation that a large number of MNCs are coming into India and pouring in large amounts of revenues into building R&D centers in India. It is a win-win situation for both India and MNC’s as these MNC’s find a large pool of highly skilled people and we get the funds needed to develop and run these R&D centers.

Apart from the influx of MNC’s with huge funds, the telecom sector is also playing a very important role in the growth of the T&M sector in India. We are witnessing a time where the customers tend to experience a new handset every second day, and every new handset comes with new features and technology. Thanks to the R&D that’s being undertaken by the manufacturers of these handsets.

Gone are the days when we used to wait for the new technology to arrive from the West. The electronics market in India was pegged at US $11.5 billion in 2004, and is likely to grow at a CAGR of 23 percent by 2010. India has shown the most rapid growth potential among Brazil, Russia, India and China (BRIC) countries and has the ability to manage six percent growth over the next 50 years. The electronic industry attracted a fabulous amount of foreign collaboration and investment in India. The domestic industry has also responded positively to the politic policies of the government.

The Indian government introduced positive policy measures such as the Electronics Hardware Technology Park (EHTP) scheme providing additional fiscal benefits to global manufacturers, which prompted global giants like Elcoteq, Ericsson, Motorola, Nokia, LG, Samsung to set up manufacturing facilities in India. All these positive aspects give a big ray of hope for the Indian T&M sector to grow and sustain the growth.

The educational institutions are also playing a significant role by churning out a large number of skilled workforce to the T&M sector. As mentioned earlier, it is proving to be a win-win situation for the T&M sector as well as the skilled workforce, as they no more have to look at the West for big opportunities.

R&D 3G handsets to continue

Speaking on the trends in the T&M market, Shankar Roy Chowdhury, general manager, marketing, Test & Measurement Group, Agilent Technologies India Pvt. Ltd . , remarked that India has been witnessing a robust growth in the recent months. This growth has been observed across all industry segments. There has been an increase in private participation in aerospace/defence. The telecom sector has also contributed 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 MNCs such as LG have started manufacturing; many other NEMs and CMs have made announcements to follow suit. In fact, 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 invested in tools for network deployment and upgradation.

Yatish Mohan, managing director and head, T&M, SAARC, Rohde & Schwarz India Pvt. Ltd., emphasised that during the last financial year, the telecom sector has seen tremendous growth, both in terms of network expansions as well shifting of R&D activities to India by the global telecom companies. These developments have given a boost to the T&M industry. According to estimates, the T&M industry in India shall grow by over 15 percent in 2005-06 as compared to last years’ average growth of 10 to12 percent. A major part of this growth shall come from the telecom sector.

International companies like Nokia, LG, Elcoteq, Ericsson, ZTE, Samsung, LG, etc. have announced their manufacturing plans for GSM and CDMA handsets. GSM, EDGE and WCDMA stack development will continue to be on an increase. R&D in third generation handsets shall continue. In fact, we foresee the participation from India on R&D for fourth generation handsets as well. HSDPA, WiMAX and DVB-H are new focus for several companies in India DTH are also expected to be in demand.

Shankar from Agilent has always been a pioneer as far as T&M technology in concerned. In the recent months, Agilent introduced state-of-the-art oscilloscopes that meet today’s engineer’s measurement needs. Agilent was the first to break the 10GHz bandwidth barrier with the introduction of industry’s first 13GHz bandwidth digital real-time Oscilloscope with matching probing system in January 2005. 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 now assuming a greater role in shaping technology. Agilent recognizes this and has recently formed a separate division, Asia Industry Business Unit, focused exclusively on the Asia market. Also, the world’s largest T&M factory is now located in Asia. As innovation is the core of its technically advanced products and solutions, 12 percent to 13 percent of its turnover is allocated for R&D. Agilent is in the process of relocating the development of a flagship product of the company’s operational support system group (OSSG) to India. This is part of the company’s ongoing strategy to be a premier provider of customer, service, and network assurance solutions for telecom carriers worldwide.

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

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 the transport side, switching side, routing side or the applications side, are the same in India and other developed counties right now. Mobile operators are adding new features on the 3G sides, 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, the specialised high-speed precise measurements are gaining momentum. Moreover the software pool of India, which is no longer, the traditional database software but more of the technical network management, application encryptions, software optimisation, is now witnessing new opening for the T&M business in India. All the technologies that are either being developed or deployed in India are at par with the 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 more government spending on security, aerospace and defense, there is a tremendous need for high-precision and quality measurements in these areas. This is providing a major impetus to the electronics measurement industry in India.

The growth of mobile operators and broadband service operators has been exponential. With many of the mobile handset manufacturer and equipment manufactures establishing their manufacturing site in India, the test and automation requirement in this segment is phenomenal. This is going to further fuel the growth of T&M market in India in a few years down the line. This is in addition to the current operator’s requirement of the installation, maintenance and optimisation test instruments.

Test requirement in R&D is growing. The global R&D houses are now doing most of the sourcing of the 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 the massive government spending on projects of national interest, is enabling the largest ever growth that the T&M industry has ever seen.

Yatish added: “During next five years, India will be the fastest growing telecom market. The mobile subscribers will grow from 70 to 350 million, which will force telecom operators to go for infrastructure investments of as high as US $50,000 million. From the global perspective, 30 percent of the additional global wireless Subscribers over the next five years will come from India. Therefore, we too see great future for the growth of 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, many service providers are becoming sensitive to each and every cost input due to which quality of tools is getting compromised. This trend needs to be arrested immediately so that the network could continue to deliver quality service. As customers become more familiar with the technology, they would become more demanding and the only way out for service providers is to improve QoS.

Shrinking life cycle of devices, components and hardware platforms challenge the test instrument vendors to provide longer support as preferred by customers.

Yatishemphasised that more standardisation is happening and the T&M instruments are becoming quite comparable to each other. The winner has to differentiate himself by providing superior support in its services, calibration, application, trainings, etc. 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 are having their bases in the US, Europe as well as in Asian countries. The major purchase decisions are often influenced in consultations with important people at several locations. Finally, the decisions of these global key accounts are based not only on data sheet or price, but 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 up customer confidence. All Rohde & Schwarz subsidiaries, including India, are geared up to support the service needs of these global Telecom buyers. Our service centers, around the world are monitored and periodically audited by the qualified auditors from 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 very well geared up to take care of this need of telecom customers.

One of the key trends that we have 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 has caught up in foreign countries is yet to catch up in India. There is quite a bit of commitment for deploying MPLS-based technology across networks because in future the networks shall be IP-based to provide good quality transmission.