The Structured Cabling market, which was at its all-time low a few quarters back, is starting to spring back to action with new opportunities coming its way. Will this work wonders for it?
The global structured Cabling market is estimated at Rs.38,000 crore, and the Indian market accounts for around 3% of the global market. Reports suggest that the global market for Structured Cabling will grow from $6 billion in 2012 to $8.3 billion in 2020. According to IDC, the structured cabling market is likely to show a CAGR of 20.5 per cent in the coming years, which is high relatively to global growth trends and this would encompass both the copper and fibrer solutions.
“The size of the structured cabling market is Rs.1,200 crore for the current fiscal. With the new initiatives of infrastructure developments and smart city concepts, the market is expected to grow at 10% year on year,” says Murugesan, Director – Sales & Marketing, Enterprise Networks, TE Connectivity.
“The Indian structured cabling market has faced turbulent times and the segment is expected to look upward from Q2 2014. Having peaked in 2011 at Rs.1,400 crore, the market was almost flat in 2012 and dropped by 20 per cent in 2013. Q1 2014 has not been great too, but from Q2 2014, it seems things will start looking upward and stabilize at a 20-per cent growth over the next ten years,” asserts Gaurav Ahluwalia, Managing Director, R&M.
Moving forward, there will be tremendous growth opportunities in this segment with huge investments coming in from the government sector. The overall positive economic outlook has also resulted in enterprises being keen on enhancing their infrastructure in India and this would eventually lead to thriving business.
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Sarvesh Mishra,
AGM – Marketing, PTNO, Schneider Electric India
Copper vs Fibre Cabling
The maximum growth in the Structured Cabling space is primarily dominated by copper cable which contributes about 79–80%, with the rest being Fibre. “We believe that within the copper market, approximately 41–42% contribution is from the components and the rest is from cables,” remarks Sarvesh Mishra, AGM – Marketing, PTNO, Schneider Electric India.
Though copper clearly has a major share of the structured cabling market, there are limitations within the copper as a category. For instance, copper has a restriction in terms of distance it can cover for high-speed data transfers (typically up to 100 metres only). Secondly, security is an aspect which is a strength of fibre. Whereas copper can be easily tapped, fibre cannot be tapped without detection. Thirdly, copper would have limitations with respect to outdoor applications where bandwidth of 1GB plus is required. On the other hand, fibre offers unmatched reliability/efficiency as compared to copper. Also, the losses in fibre compared to copper are much low and this results in high-performance and high-bandwidth speeds from fibre cabling. Hence, this clearly positions fibre cabling as a much more efficient and reliable category.
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Murugesan,
Director – Sales & Marketing, Enterprise Networks, TE Connectivity
“The growing need for faster data transmission and stable performances across a wider frequency range has given rise to increased adoption of Cat. 6A, mainly in copper, but fibre is also gaining ground fast. The rising use of high-definition video, voice and data services and remote access of applications will drive the demand for fibre-optic cabling solutions in the coming years,” opined David Shalts, Regional Sales Director, RiT Technologies.
The fibre-optic cabling market in India is witnessing a higher growth with strong demand coming from data centers and residential complexes (FTTH). In recent times, it has garnered a lot of mind share, with FTTH and FTTP being increasingly deployed. A lot of recent high-end residential projects are opting for FTTH as it allows a single service provider to deliver voice, data and video content efficiently. Further, with increasing broadband connectivity along with the rollout of 4G/ LTE is driving the adoption of fibre cabling.
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Gaurav Ahluwalia,
Managing Director, R&M
However, in spite of fibre prices have been stable or even reducing slightly at times, it has no preference over copper even now. On the other hand, cost of copper has been fluctuating for a couple of years now, sometimes the price turning sensitive due to the volatility of copper. “Copper is preferred over fibre-optic cables as the total network costs are less expensive when copper is used,” says Gaurav.
“To add to it, FTTX as a category is still driven by property developer segment (premium/large residential, commercial projects). It would take time to penetrate down into large volumes. Probably, high capital expense is one of the bottlenecks for this technology to take off to the next level at a high pace,” views Sarvesh.
“Easy installation and high level of acceptance in the data center space makes copper still a highly preferred choice. In the present scenario, copper dominates the market demand against fibre. However, more and more enterprises today are looking at fibre solution; so moving forward, fibre will gain momentum,” observes Murugesan.
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Data Centers to drive growth
David Shalts,
Regional Sales Director, RiT Technologies
With structured cabling being an essential part of network, there is a higher adoption of cabling solution across various business verticals. Almost every major vertical is important for the structured cabling market to thrive, but it is primarily the infrastructure that enhances this industry. "Without a strong investment in infrastructure, there won’t be any growth potential for structured cabling. Today, in India, we can see the major verticals being IT/ITes, manufacturing, telecom, etc," says Gaurav.
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Shailesh Bhayade,
Vice-President – Structured Cabling, D-Link (India) Ltd
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We believe major market drivers in the coming times are primarily going to be IT/ITeS, government and manufacturing segments. Apart from these, there is ample opportunity for this market to grow within the SME / SMB segment, where customers look for optimum price for the offering," says Sarvesh.
Major initiatives by the government to enhance IT deployment across various departments, BFSI, deployments in educational institutions, hospitality, retail, residential (FTTH) and emerging markets like Tier-II & Tier-III cities are going to be the major thrust areas for this industry. "Government today is certainly one of the key promoters of technology usage in the country. Today, high emphasis is being laid on digitization along with a strong focus on enhancing broadband penetration. The key announcements like development of Smart cities, emphasis on internet penetration, etc has resulted in positive outlook towards the ITC sector," suggests Shailesh Bhayade, Vice-President – Structured Cabling, D-Link (India) Ltd.
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Scott Gregg,
Marketing Manager, Enterprise Networks – Asia-Pacific, Corning Optical Communications
Moving ahead, the enterprise segment is also likely to generate a lot of demand as new policies come into action. For instance, FDI cap hike to 49% from existing 26% and further concessions for FDI in the development of Smart cities.
However, at present data centers remain one of the important areas of growth in India. The shift from buying IT products to purchasing Infrastructure-as-a-Service (IaaS) and Software-as-a-Service (SaaS) is boosting the need for storage and increase the demand for data center capacity. The future of data center market will be dominated by large IDCs unlike small /enterprise DCs in the past. “Thanks to technologies like virtualization, cloud computing, etc, these technologies not only demand for high-bandwidth cabling but also specific design architecture, intelligent management requirement and importantly integration of IT & non-IT services,” says Murugesan.
He further continues, “The increasing use of smartphones, the need for file sharing and instant access, will massively increase the need for data storage and speed. Convergence will increase and more structured cabling will be used to wire access points, Internet Protocol (IP) cameras, building management systems, access controls and other applications. The demand for better bandwidth boosts the adaption of Cat. 6A and higher category cables."
Data center installations have been steadily increasing over the last couple of years. This will rapidly increase in the coming years as well, as we can see more companies making such installations. Agrees Sarvesh, "Data centers for sure are going to play a significant role in the growth of the overall structured cabling market. With customer expectations going up for performance optimization and lowering of TCO, the industry needs to be more aligned with the customer needs and evolve with innovative offerings to make the value proposition more tangible.”
As Indian enterprises focus on building new intelligent data centers while optimizing existing hardware assets, data center modernization initiatives are a key contributor. “In our opinion, the next growth curve will be quite steep. We think the growth of the structured cabling sector will increase – we are in the beginning of the curve – and indeed data centers will contribute a major push to this spike,” reiterates David.
At a global level, the market for Structured Cabling in data centers stood at US$1.18 billion in 2013. This is expected to reach US$1.6 billion by 2020. “Adoption of convergence, Gigabit-capable Passive Optical Networks (GPON), and cloud computing is driving growth for structured cabling in the data center space. Interestingly, this trend is also being observed in the Indian shores as well,” recalls Shailesh. He further continues, “Another major trend is high-density cabling solutions that can save space in the communication room and data center. We see an increasing need for these solutions because of the increased demand from existing data centers and the lack of space for traditional cabling solutions.”
“The growth of the Indian data center business has coincided nicely with the value that Corning provides to our customers. As customers deploy larger data centers with higher-performance requirements for 40GbE and 100GbE transmission, they are demanding more reliable solutions which give them the ability to easily scale to the emerging requirements of tomorrow,” says Scott Gregg, Marketing Manager, Enterprise Networks – Asia-Pacific, Corning Optical Communications.
Smart City & Structured Cabling
With the new government’s sharp focus on the words “digital” and “smart” when it comes to the new-age Indian cities, a lot of talking has been done as to where and how smart cities are going to be built. The Government’s decision to earmark Rs.7,060 crore for development of smart cities is definitely going to attract FDI from global multinationals and create a competitive landscape that will boost the country’s long-term potential economic growth rate. “Every company would want to be a part of this as it is a huge opportunity. As a company which is able to provide solutions for such as project, it is obviously a target to look at,” remarks Gaurav.
According to David, to design and develop services and solutions for a smart city, an array of solutions such as intelligent transportation systems, security & surveillance, access control, real-time monitoring and integrated analytics need to be implemented. The backbone of all these is networks and network infrastructure. “No doubt, a smart city will require advanced network infrastructure that includes the technologies outlined above. In this respect, the government’s smart city initiative is drawing our interest and we are keenly observing it, since it has opened up new business opportunities for network providers,” he says.
The new Government’s initiative has boosted the morale of vendors across IT, telecom, cabling, networking and enterprise sectors who are deeply interested in creating smarter cities and developing infrastructure corridors. With the rise in Smart City Development and the initiative taken by the Government of India for the same, there is an immense business opportunity. “As an organization with vast experience in the networking domain, D-Link strives to bring innovative products for the betterment of the consumers across diverse verticals. We certainly look forward to contributing to the nationbuilding process with our innovative structured cabling solution offerings,” says Shailesh.
“The Smart City initiative will usher in an exciting era in India’s development. The bandwidth requirements will be immense. We believe that Corning’s fibre solutions will play a key part in enabling the vision of the Smart City initiative,” Scott asserts.
Finally…
India as a market has got almost all the innovations that any other market would have. It is just that the amount of installations carried out is much lower with cost being an important factor. Nevertheless, India is a growing market with a solid economy, and the future of structure cabling also looks very strong. 2015 is expected to be a good year for structured cabling, with key drivers being a stabilized US economy, momentum gained by IT/ITeS, liberalized economy outlook in India and
the increasing demand for high bandwidth broadband services. While copper still has a long inning to play, fibre is showing a surge as it is a good option in data centers based on the current standards. With newer technology in fibre coming in, various projects will be seen using fibre very often now.
samrita@varindia.com
