India networking market registers growth despite challenges: IDC report
India’s networking market exhibited a 21.6% year-on-year growth in terms of vendor revenue for July-September 2022 (3Q22) period. The network market includes ethernet switch, router, wireless local-area network (WLAN). As per the report by research firm International Data Corporation (IDC) on the Indian Ethernet Switch market, this growth can be credited to vendors’ rush to clear backlogs before the next financial year. Despite challenges like chip shortage (which is expected to continue at least till the first half of 2023), delays in delivery, price increase, and slowing global economy, the demand for network equipment remains unscathed, the report added.
“While 2023 certainly is expected to be a challenging year for all businesses, the demand for networking equipment would pull through considering the growth trajectory of India and the criticality of networks to achieve the desired results,” said Sudharsan Raghunathan, Associate Research Manager, Enterprise Networking, IDC India.
IDC further predicts that the ethernet switch, router, and WLAN will register a single-digit growth in compound annual growth rate (CAGR) for 2021–2026. The firm also anticipates an increased adoption of emerging technologies like cloud, the internet of things, and mobility, etc., which would in turn drive incremental revenues. Large investments for 5G rollouts in the next couple of years are also expected, IDC said in a release.
Segment-wise, the switching business in India had a 30.4% year-on-year growth by vendor revenue in 3Q22; the growth for the router market and enterprise router business declined by 1.4% and 8.1% year-on-year; WLAN grew by 30.6%.
For switching business in India, the growth was driven by industries like services, telecom, finance, and manufacturing.
As for routers, the market witnessed major investments from service providers as part of the upgradation process for offering 5G-supported services; more such investments are expected to come in the next year. Business in the consumer gateway routers declined 29.2% year on year in 3Q22, as opposed to growth in 3Q21 due to Covid lockdowns. IDC predicts that the demand for consumer gateway routers will remain flat over the next year.
In the WLAN segment, top two vendors — Hewlett Packard Enterprise (HPE) and Cisco – cleared out their pent-up shipments that helped in its growth. There has been a significant uptake in cloud-managed wireless equipment and IDC expects the WLAN segment to grow further. With a 77.5% share by vendor revenue, Wi-Fi 6 (AX) continued to dominate within enterprise class WLAN.