The Indian cable market has been witnessing growth owing to the increasing subscriber base. With over 900 million users, the Indian telecom market is the second largest in the world. An expanding subscriber base and broadband growth have led to telecom operators adopting new technologies to increase the capacity of existing networks and offer improved quality of service (QoS).
Active infrastructure in a telecom network comprises components such as radio frequency (RF) feeder cables, base transceiver stations (BTSs), switches and antennas. RF feeder cables are used for connecting BTSs to antennas, and given the large number of BTSs deployed in the country, there exists a large market for this component.
In 2011, the Indian RF product market stood at Rs 3.5 billion, of which the cable segment constituted 75 per cent, while connectors (including jumpers and assemblies) comprised the remaining 25 per cent.
Current status
The Indian RF cable market comprises several major and small cable manufacturing companies. The key players in the RF product segment are CommScope, Shilpi Cables, RFS, Rosenberger, Huber and Suhner, Kavveri Telecom Products Limited, Radiall, TVS Interconnect Systems, LS Cables and Microgual Techno. Currently, CommScope dominates this market.
RF and feeder cables are typically divided into four categories – 7/8 inch, 1/2 inch, 1/4 inch and 1-5/8 inch. The 7/8 inch category has an 80 per cent share in the total market.
The market size for RF cables in India is about 70,000 km per annum. The installed capacity for RF cables stands at over 40,000 km per annum, with the remaining demand being met through imports from countries such as China and South Korea.
The demand for RF cables in India is largely driven by telecom operators, tower companies and telecom equipment manufacturers. Further, with the constant upgradation of tower sites owing to the expanding consumer base and the recent introduction of next-generation technologies, the demand for these cables is growing. Several telecom operators have major expansion plans and are increasing their RF cable deployments. Idea Cellular and Tata Teleservices Limited (TTSL) are upgrading copper-based cables which are used in their networks with RF aluminium cables. Both operators plan to use high performance RF aluminium cables for future cellular BTS roll-outs.
Given the growing infrastructure demand from telecom operators, RF cable manufacturers have made new investments in the segment. Shilpi Cables, for instance, plans to expand its business. The company launched an initial public offering worth Rs 550 million in March 2011 to fund its expansion plans. Further, it would build capacity for 20,000 km of cables and wires along with 80,000 cable assemblies at its manufacturing unit in Alwar, Rajasthan. The company is targeting a turnover of Rs 5 billion by end-2012.
Also, Kavveri Telecom Products Limited plans to raise $20 million through equity. It will use the funds to expand its manufacturing capacity and fund new acquisitions. Currently, the company has a capacity to manufacture over 100,000 antennas and 10,000 RF products each month. Kavveri Telecom provides infrastructure for enhancing indoor wireless coverage in malls, hospitals and hotels on a fixed rental basis to telecom operators. So far, the company has installed its equipment on an area of about 37 million square feet in malls, hotels and offices.
CommScope has also made significant investments in its manufacturing plant in Goa. The company has increased the supply of its 2.3 GHz product range and the facility is now equipped to support local broadband wireless access roll-out. CommScope has also introduced a 2.3 GHz product range with a very high passive inter mode (PIM) performance. With multiple frequencies in a multi-operator environment, high PIM performance is becoming an essential parameter for network optimisation and a key performance indicator, especially in higher frequencies like 2.3 GHz.
Benefits
RF cables help in improving a telecom site’s performance and are extensively used for providing in-cabinet solutions used in base station equipment, controllers, antennas and Wi-Max equipment. Other common applications of RF cables include video and cable TV distribution, RF and microwave transmission, computer and instrumentation data connections. These cables are also widely used in test and measurement industries.
RF cables minimise the footprint of the installed base station equipment and reduce RF losses along cables when distributed remote radio elements are placed close to the antennas. In RF cables, the electromagnetic field carrying the signal exists only in the space between the inner and outer conductors, which results in lower power losses as compared to other transmission lines. This provides greater protection for the signal from external electromagnetic interference.
Over the past few years, the Indian telecom industry has witnessed a shift from using RF copper cables to RF aluminium cables, which offer an improved performance over the former.Further, the use of RF aluminium cables is more economical than copper cables. The price of copper, as determined by the London Metal Exchange, has fluctuated over the years due to uncertain exchange rates. The replacement of copper with aluminium as the raw material for RF cables reduces the manufacturing cost.
Increasing demand
So far, the growth of the RF feeder cable market has been driven by strong 2G mobile telephony services across the country. Of late, next-generation technologies such as 3G and broadband wireless access have significantly contributed to the growth of this segment. The government has set a target of achieving 175 million broadband connections in India by 2017 under the National Telecom Policy (NTP), 2012. This will provide a major fillip to the RF feeder cable market. Broadband expansion in rural areas will increase the demand for RF feeder cables to provide the required internet connectivity.
Also, the adoption of emerging technologies in the infrastructure space such as in-building solutions (IBSs) will add to the demand for RF cables. In the IBS system, a small BTS is deployed to serve a localised subscriber base, leading to an improvement in the QoS.
Players in the RF cable segment also expect market growth with the expansion of 3G networks by telecom operators.
Key challenges and the way forward
Despite offering advantages such as improved efficiency and low costs, the response to the use of aluminium RF cables in the country has been mixed. There have been concerns regarding the effect of using aluminium RF cables on the stability of the telecom network.
Further, the increasing adoption of multiple input-multiple output technology is driving telecom operators to reduce the number of base station antennas on a tower by integrating multiple technologies onto a single antenna. This shift and the emergence of multi-port and multi-sector antennas are encouraging telecom operators to move to optic fibre cables. This allows them to include technologies such as CDMA, 2G, 3G, and long term evolution within a single antenna by keeping the form factor constant – at the current levels used for a single technology.
It is important for RF cable providers to offer more innovative solutions to telecom players. Manufacturers need to offer more innovative products along the lines of foam-filled cables and hybrid cables to maintain and grow their market share.
Moreover, to achieve the optimistic targets set under the NTP, 2012 and the National Optical Fibre Network project, the Indian telecom industry is likely to witness large-scale network roll-outs. Also, with major players planning to launch 4G services by end-2012 or early 2013, significant investments are expected in telecom infrastructure, which will catalyse the growth of the RF cable market.