T&M Industry in India : Visioning a new Architecture(2)

It is good to be back with our thoughts on the art and Science of visioning new architecture for the T&M industry and its markets.One of the thing being thought up is by replacing all the existing boxes and applications by PXI based modules.This itself is quite a big breakthru in a country which has very old legacy of portable installed bases.PXI internationally has been accepted in last decade or so very well and holds out promise for newer Product/Applications.The physical frame and the connectors etc are also standardised.In fact , going by todays stat the VXI seems to be yielding the space to PXI. The application layer is also expanding and standard datasheeted products are regularly hitting the market. But can it be, Should it be the prima facie architecture of choice,in India, for a lrge unwieldy and Government dominated installed base of India?

Another associated question is Should there be a new architecture ,or ANY architecture at all? Why not first try to look from the " Need behind the Need " angle? By this phrase I mean Why the instrument is needed and need to measure the parameters -like some conformance to the testing standard,or some other regulatory imposition on the applications? If we isolate all the "soft" and "hard" part from the boxes we can get the basis of practically virtualising the T&M box instrument and automating the test process,if needed externally.

What else can be the alternative architecture? Can the newer standards getting announced be applied to Indian conditions? Or should we think of absolutely brand new approach? We will discover more in our future posts,because this is critical from the growth of the market here.Watch this space! 

 

T&M Industry in India : Visioning new Architecture!

At this time of the year many of us active in the T&M industry Globally are back from the Holidays and for others it is biginning of the Financial year as well. I thought it will be in order to do just some imagineering and kite-flying on our industry.

Well our industry is fantastic no doubt, yet it will not hurt if we encounter few innovations in place both in terms of selling and supporting to newer users and applications but also defining new platformsand architecures.And these innovations need to be relevant to Indian conditions and the needs of the user Industry here,which is being served by our Professionals. Towards that I seek our being able to reach out Global Standards of Modulars,a new methodology of common platform of testing across frequencies and may be a new indigeneously developed integration of hardware and software/services.

We in India are somehow stuck in old portable mentality and all technology based new announcements are going waste.We are just commoditising more and more and in the bargain we are losing price-realisation and not moving up the value chain of technology/integration or applications.In any industry with time,the Services oriented Architecture drives the total revenues.And the paradigm thinks bigger and bigger envelope of Hardware plus Services.So,in that respect we need to think beyond the box,and outside the box simultaneously.

For an immediate thought I propose we start replacing and substituting portable instruments by modular instruments (may be PXI architecture) to leverage maximum work being done Globally.This will have twin advantage of using standardised modular instrument and also encourage us to think "systemic" by using packaged software and other data sheeted services from T&M companies.The functionality of test will improve and ultimately the user will gain in terms of Quality,Productivity and Profitability. The possibility for T&M will be incremental business for hardware and services finely tuned for the user.

I will discuss these thoughts and road maps in future Blog Posts. Trust you are off to a good start in 2013 ! 

T&M Industry in India :Economic Linkges with Macros !

As the new year takes off,and we are past one fortnight some indications of the Government mood looks to be distinctly changing for the better.There is little bit economic pragmatism shown and the major part related to T&M industry is the signals of halving the CDMA spectrum price for next round of option.Supreme Court also lets the licenses continue till the March First week,enabling prominent players in CDMA taking part in the option. I think Government is finally realising the market call on selling Spectrum.It augurs well for Capex once these players are motivated to deploy network.

Likewise,there seems to be lot of customer churn and infact decline in number of subscribers and count among top ranked operators and only small hinterland based operators are gaining traction due to both focus and lower base effects.This is really giving a fillip to OSS/BSS activity and keeping tight grip on the Quality Management of Network.Its outfall can be positive to the T&M industry uptake. The sale of Smartphones catering to lower value segments is being upped by proper promotions as well. T&M may see some growth in maintaining wide customers devices there.

There is a little bit of talk on cutting back by 10% the Defense Budget of Rs 193000 Cr to address the current account deficit staring the Government finances ( Subsidy on Food,Fuel,Fertilisers).But its effect on ultimate T&M purchases will not be significant due to little size in comparison to overall pie.I think large scale deals of T&M through the DGS&D and otherwise direct from the users labs and field organisations should come through in this JFM period.As far as the smaller T&M players below the Top deck are concerned,they seem to be on good growth traction this year.So,overall the FY13 should exit with a small but sort of positive growth tone.We are expected to hold up to the overall revenue. More to come.

Happy new year. 2013 definitely hold HOPE and positivism ahead!

 

T&M Industry in India : Review as the year winds down!

As we enter the years last week,it is worthwhile to review how the year is going to be for various big T&M companies.Although different companies have different fiscal years ranging from October to March,we can get some idea how the industry overall is tending.Particularly the trend post 2008 is very significant as the industry overall went down.Also the year 2011-12 was tough due to turmoil in the Communications Services industry (service providers in particular) and resultant pushbacks on purchases.Off course,there look to be some sort of greenshoots,as the policy related terms are better.

Let us be optimistic for the next year ahead. We find the leader of the industry looked to have had a tepid last year,and around  60 M $ clocking of revenue. There is some growth in the business of the second ranked player,but increment of 2 to 3 percent is hardly big.Let us find how others (in 20M range) companies are doing? Their performances are also not enthralling!

So,overall we find the industry is still in the throes of recession of 2008 times.It is still to get on traction of new chapter of growth and in the meantime there are significant M&As in the industry which are putting its own impact on respective India operations.Likewise the Defense related procurements have not met with complete closures.These deals may impact Jan-March 13 quarter and so the figures for FY13 may be significantly different than the trend so far.

Therefore we need to go a little deeper in the T&M industry.Some major indigeneous deals are also
going to close shortly. Let us watch closely that too.This will be our last post of 2012 and let us move into new year and smoothly and positivism should help ahead. Merry  Christmas and happy new year! 

T&M In India : Midway things look even keel in FY13

This fiscal had been going very well for the industry so far.Although there are no closures of major deals pertaining to LTE,or LTE Adv because of so much uncertainity around the sector,there have been small businesses in Telecom non-core area. The DGS&D business remained dominated by Tek and now some inroads being made by R&S too. This segment continued to attract the smaller indigeneous companies.Some local solutions created by a few companies are standardised by the Education sectors and that scaled this year too.

The most important business off course came from the Defense Sector.Buoyed by big Defence Budget overall (200,000 cr approx) this continued to be bullish.Here again lot of portable deals were coming from the regional field units and the Supply units.Many new products got approval and certification from the Quality organisations of Navy and army as well.

I think next three months will see the closure activity really picking the pace.Scientists in the Defense Labs are also raising the indents and taking the procurement action.This activity will lead to fair amount of supplies to various DRDO and field labs.Naturally the instruments reaching the labs will further project completion and in turn progress this.

In the major program of Telecomm R&D activity with the incumbent operator,the lab for approvals and security compliance has not been completed.Not sure if the major portion of Rs 60 cr will be spent this fiscal,eventhough lot of pre procurement activity is on.Let us hope at least few procurements of NOFN instruments will happen in FY13. Business results from Top three T&M vendors for FY13 so far has been soft and lower YOY. This is not encouraging,but I think the smaller niche players will put up better results.We keep our hopes on.Keep watching this space.

T&M Industry in India: Sentiments Perking up !

There seems to be a little bit of sentiment change for the better,as the so called policy paralysis on the part of the Government has ebbed. Two to three announcements by the Govt did improve the expectations and even ever sceptical critics of the Govt are having a second thought on total write-off  on the growth front. There is change in the climate (literally) as weather turns cooler in the Capital ,and welcoming!

Even in the absence of large scale T&M purchases by the big operators,there is clear search for new customers in the economy. There is a lot of recruitment noise for IT integration activity and public sector utilities like Railways. At least there is activity and overtime these should convert to closures of deals. Some deals have been closed at the DGS&D as well.

At Macro level November does give indication of different consolidations at the private equity levels too.As the calender year races towards close,the mood of winding up happens at the Foreign western shores. But so far there is no indication that Europe is out of travel and besides the US ,no other region seems prepared to offset western slide.Asiapac will not definitely be silent though.India should therefore be logical beneficiary of this partly.US policies look to continue to support creating jobs at home!

T&M Industry in India : Is there a created Pessimism?

We are seeing a fair amount of percieved pessimism and despondency in Business and Political Press writings! This is definitely true on the external sectors of the Economy.The reasons are very obvious.The western disturbance due to delays in opening retail,insurance and other vital sectors to FDI and struggling Capital Markets can be very well understood. Even our Economist PM has got a new tag of "Underachiever" by the General Media Moghul.

In India hoever if we look inwards, things are really "Business as usual" . The Economy is moving at a rate of 6-5% or so . Consumers are buying what they used to.People are still cursing the politicians and yet queing up for the Friday releases and brands are doing reasonably ok, if not as heady as in 2007 pre-Lehman Brothers! The UNO report still says India is the third most sought after investment destination. So where is the disconnect between "our right to grow at 9%' and the Ground Reality?

My view is very simple here as the T&M business person. The T&M industry growth is largely driven by the growth in industries it tends to serve.We saw a one-way steep growth in the late 90s (during Narasimha Rao Govt) ,and 2002-08 when we had NDA
and UPA1  at the helm. Personally I think  our industry grows when Defense,Telecom and the Government Sectors tend to spend the alloted money,irrespective of which party really is at the Center.The underlying thing is combination of our preparedness and Contracting Parties spending.Inspite of deregulation and privatisation, it is the linkages to PSU, the Govt and the DGS&D who finally give ACTUAL businesses to the T&M vendors.

And this group is not going to be affected by the GDP number being this or that much.As the macro figures of Budgets to all major depts of the Govt, and the PSUs under them is rising steepily.Yes there is a little pause, but I think the slowdown to our business is overplayed as the media overanxious. I think India has enough resilience at work to ride over this time,while keeping Super Cycle in mind.