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This blog post was originally published in Telecom & Networking Communications Today.
The Indian market for LAN cabling systems is about 30 years old now and is perhaps among the top five markets in the world. It is a well-segmented market of about US$150 million in sales based on OEM shipments in 2014. Information Technology (IT), IT Enabled Services (ITES) and the banking, financial services and insurance industries primarily drive demand in the enterprise segment. Manufacturing, services (hospitality, hospitals, and education) and the government drive mid-market vertical segments and to some extent the enterprise vertical as a whole.
In terms of LAN cabling products, the market is primarily driven by Category 6 copper and laser optimized OM3 multimode fiber optic cabling systems, standards that were ratified almost a decade ago. Some believe that LAN cabling products are basically the same, with no noticeable differences among competitive models. However, the Indian market is entering a phase of consolidation. OEMs as well as cabling integrators who lack differentiated solutions, customer support and/or services are facing severe headwinds and challenges in staying afloat. I expect this trend to drive a hardening of prices that leads to clear market segmentation among vendors.
Premium, “Grade A” office space is the best proxy for gauging demand in India for LAN cabling systems, and totals about 36 million square feet per annum according to a recent CBRE report. The report also mentions that leading international architects are increasingly working with realtors in India to develop investment-grade buildings with large floor plates and international specifications. Workspaces in such offices are increasingly divided into formal and informal, collaborative work areas. Building sensors are being used for effective utilization of workspace, thus saving on operating expenditures and improving office productivity.
Also, a large number of customers are consolidating their offices in cities, leading to renewed investments into cabling systems. Such new investments are being made with an eye toward supporting emerging networking technologies - IEEE 802.11ac WiFi, 10G to desk, 40G/100G in data centers and riser backbones, and IEEE 802.3bt Power over Ethernet (PoE).
E-commerce, retail spaces, large warehousing and logistics, auto, hypermarkets and fashion brands are new verticals driving demand for Grade A office space.
The smart cities initiative of the government, as outlined in “Smart City: Mission Transform-Nation,” is driving the need to premium LAN cabling systems. The Indian government plans to develop 100 smart cities based on the guidelines and procedures, which state, “The application of Smart Solutions will involve the use of technology, information and data to make infrastructure and services better.”
The coming year will be exciting time for India with the convergence of global trends and regional initiatives creating new opportunities in the market.