The Hindu Business Line : Tyco targets mid-segment

ESTIMATED at Rs 280 crore, with a compounded annual growth rate (CAGR) of 30 per cent, the structured cabling market in India is highly price-sensitive.

The cabling market is cluttered with over 35 players such as Krone, Avvaya (now Systimax), Tyco Electronics, Molex, D-Link and Panduit.

Tyco plans to drive volumes with a thrust on the lower and middle segments, including the small and medium enterprise (SME), end-consumer and small-office-home-office (SOHO) segments. The company is actively working with service providers to design products for the low-end.

While structured cabling products encompass copper and fibre cables, connectors, adaptors and patch panels, the market segmentation is on a node basis (a node is an addressable point on a network that connects a computing system or a terminal).The lower-end of the market consists of 50 to 100 nodes and the estimated order value is between Rs 3 lakh and Rs 5 lakh. The middle segment of 500 nodes is valuated at Rs 30-Rs 50 lakh and the top-end of the market at 1000 nodes is in the Rs 1crore-Rs 5 crore range.

"In India fibre usage has increased substantially due to the rapid ramp-ups by business process outsourcing firms. When broadband connectivity becomes available at cheaper rates, this would be enhanced further. Over the next two to three years, the lower-end of the structured cabling market is likely to see more movement and the industry has the potential to register a ten-fold growth," explained Mr. K. K. Shetty, Country Manager, AMP Netconnect, the networking division of Tyco Electronics.

One reason for the expected growth in the lower-end is the direct-to-home experiment (DTH), where service providers are vying to bring Internet to the end-consumer's home through television, using broadband connectivity.

A pilot project to bring DTH to over 50,000 homes is currently on in Mumbai with the participation of structured cabling vendors. If this experiment turns out successful, structured cabling vendors would have new business opportunities.

Moreover, cheaper broadband would allow vendors to explore the SME and SOHO segments in the real estate and travel industries. Broadband would enable these enterprises to connect and transact their business online based in a single location, even if the customers are located across multiple locations, according to Mr Shetty.

Tyco has cornered 40 per cent of the market share in the Indian structured cabling market. Currently, a significant portion of AMP Netconnect business comes from the information technology (IT), financial and corporate sectors.

The company expects the end-consumer, government and manufacturing sectors to offer more business over the next three years. A complete range of Ethernet switch products are also in the offing.