By Jatin Grover
As 5G marks the beginning of yet another mega capital expenditure cycle by telecom operators, equipment and services vendors such as HFCL are gearing up to tap a huge business opportunity.
“I believe our revenue should increase at a rate of 15-20% every year and the major contribution will come from optic fibre cable and telecom equipment,” Mahendra Nahata, managing director of HFCL told FE on the sidelines of India Mobile Congress.
Being a major manufacturer of optic fiber and optic fiber cables, HFCL has been trying to establish its foothold in the 5G equipment market which is dominated by the likes of companies such as Ericsson, Nokia and Samsung. In the previous financial year ended March, the company’s revenue from operations grew 4.4% on the year to `4,286 crore. As the telecom operators starts rollout of 5G services, they would require to expand or upgrade optical fibre cables, microwave radios, routers and switches, while installing new towers and large number of small cells.
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“Next financial year (FY24), I see a considerable growth in the order book with expanded capacities and new products,” Nahata said. Currently, HFCL’s order book stands at about Rs 6,000 crore, and out of that Rs 1,000 crore is related to Reliance Jio.
In a post-result conference call with analysts in July, Nahata said that the telecom companies are expected to spend about `3 trillion on 5G in the next four-to-five years.
Recently, the company has got orders worth Rs 202 crore from Reliance Retail and Reliance Projects & Property Management Services for supply of optical fibre cables.
In the next six months, HFCL is also expected to launch its new facility in Delhi-NCR for manufacturing products such as Wi-Fi Access Points, radio units, switches, and routers. “We have applied for design-linked incentive scheme for telecom and networking products and we expect to receive the approval from the government any time now,” Nahata said.
On Saturday, the company launched the world’s first open source Wi-Fi 7 Access Points, which is a next generation of Wi-Fi technology to support high internet speeds inside the buildings and crowded places.
“The Wi-Fi 7 has got a throughput of 10 GB per second which is the highest in the world,” Nahata said, adding that this would be useful in crowded places where usually there is a network connectivity problem.
With such technology and 5G-like speeds, now large number of people will be able to simultaneously use Wi-Fi and get good internet, he said.
Further, the company also launched its first 5G product which is 5G 8T8R Macro Radio Unit. The telecom companies currently use radio access networks or RAN technologies from traditional vendors such as Nokia to deploy networks.
According to experts, more open RAN technologies like this will help the companies to save on network equipment costs, as the technology supports RAN equipments from multiple vendors.
While Nahata did not mention the potential revenue from the 5G products, he said all the telecom operators have shown interest in the equipment and the company will get a good market share.
For 5G network rollouts, the telecom operators usually depend on traditional radio equipment to augment the connectivity.
Analysts believe that since open RAN is a new technology, its adoption will take time in the country. Eventually, the telecom operators will start deploying networks using the new technology to curtain their network rollout cost.