Market estimation for data networking equipment (DNE) in India

Abstract

Abstract With the Indian government pursuing the second stage of reforms aggressively the telecom industryhas emerged as one of the fastest growing sectors in the Indian economy today. The Rs.375bn sectoris projected to grow at 35-40 % in the current year. The telecom industry can be broadly classified into Basic (fixed-line) Services Cellular Services Long Distance (NLD and ILD) Services and Internet Services . Both Internet Services Providers (ISPs) and large enterprises are buyers of Data Networking Equipment (DNE) a market we have selected for our study and estimation .In this category we have tried to cover the market for IP Routers and LAN/ WAN Switches. Among the buyers of DNE in India we have included VSAT Service providers Internet service providers and Cellular service providers. we used a combination of primary and secondary research in order to obtain reliable estimates for the market of DNE n India in the next five years. We interviewed with the top management of vendors and buyers of the equipment at their offices in Delhi and Mumbai asking them about their projections and opinions . We als o asked the buyers about their purchase process and budgets. In-depth interviews were conducted to collect information regarding the purchases process as well as furure projections from telecom services providers and a few DNE vendors . Secondary research was used to develop a model to predict the future market for DNE bsed on historical data. Our attempt was to develop a model that would give us valuable insights on the relationship between the market for DNE and the key drivers in the industry. The accuracy of the estimates that we obtained from the regression model was thus limited to some extent by the uncertainty in the regression coefficients as well as the inaccuracy in the projections of the independent variables . This we see as one of the limitaions of our study. We obtained independent estimates of the market for DNE in the next five years through primary and secondary research. We found that the projections converged within reasonable margin of error this validating our value-driver model as well as validating the primary research we conducted. The findings showed a healthy growth for the industry and confirmed the sector as an attractive investment opportunity.