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India undertaking one of the fastest and largest 5G infrastructure rollouts

The next couple of years are very exciting for the Indian telecom equipment industry. All the four telcos are looking at placing huge orders for 4G expansion and 5G rollouts, and with the dominant, competitively-priced Huawei ostracized, the vendors are looking at massive deployments.

Worldwide, the telecom service providers’ CapEx is estimated at USD 329.5 billion for the period of 12 months, ending June 2022, taking the CapEx intensity (ratio of CapEx to revenues) to 17.8 percent, the highest in the last 10 years. This may be attributed to release of pent-up demand because of slow deployment during Covid, 5G picking upstream around the world, and demand for fiber to the home. This trend is expected to continue despite some of the current economic headwinds.

Strong investment momentum is continuing across these four levers – 5G, fiber-to-the-home, ready fiber-to-the-x (FTTX), datacenters as well as Citizen Networks. 5G is becoming clearly the fastest-growing technology in the world. Operators are expected to invest more than USD 500 billion in 5G between 2022 and 2025. In addition to that, FTTX is becoming all pervasive, particularly fiber to the home, fiber to the enterprise, fiber to small cell, and fiber for smart city applications.

On the Citizen Networks side, the US bipartisan infrastructure deal will deliver USD 65 billion to ensure that every American has access to reliable high-speed Internet through a historic investment in broadband infrastructure deployment. Similarly, the United Kingdom has a program to connect nationwide by 2030, and in the next three years India plans to connect 600,000 villages on BharatNet.

With demand for rural connectivity surging, both for residential and for modern agricultural and Industry 4.0 applications in rural areas, the business case for deploying fiber to rural communities is increasingly attractive, with the added benefit that the first operator to invest closes the door on competitors.

The key question today for rural broadband deployment is whether to use Gigabit Passive Optical Network (GPON) or XGS-PON technology, which delivers 10 Gb/s. A converged approach seems the future for fiber broadband networks, as fiber-to-the-home networks become fiber for everything, connecting homes, businesses, industries, smart cities, and mobile cells.

Recent technology advances help. Multi-PON, for example, is a universal fiber solution that is seeing exponential growth. Every port on a Multi-PON blade can work in GPON mode, XGS-PON mode, both GPON and XGS-PON simultaneously, or 25G PON enabling operators to start with the most cost-optimized solution and still be able to boost the speeds when and where needed with minimal incremental investment.

For example, they can start with lower-cost GPON, which can still deliver very competitive speeds, and then introduce XGS-PON for power users like factories, or even 25G PON. This is a huge advantage for deployments because it gives operators flexibility and choice, applying each technology where it makes sense, and having a seamless, future-proof upgrade path.

In H1 2022, the worldwide aggregate telecom equipment market revenue increased 3 percent year-over-year as against 7 percent increase in 2021, according to market research firm Dell’Oro Group.

Issues such as component shortages, the strengthening of the US dollar against other currencies, suppliers exiting the Russian market, uncertainty in the 5G market, and slower wireless activity in Japan and India combined to limit the growth opportunities in the first half.

For the full year of 2022, the research firm expects equipment revenues to increase about 4 percent, as segments that still have room to grow particularly broadband access equipment, and also 5G will continue to make up for sluggishness in other sectors.

Meanwhile, supply constraints and rising inflation have not had a negative effect on the size of orders network operators are placing with their vendors.

“We are not seeing order sizes decrease and, in some cases, orders have been increased so that operators can be assured of having equipment once lead times finally shrink,” Jeff Heynen, vice president, Dell’Oro Group commented. “I am seeing this in the case of FTTH equipment, particularly ONTs, as well as residential gateways with Wi-Fi 6 and 6E. If operators are in the process of building out fiber infrastructure now, they certainly do not want to be in the position of telling customers who sign up for service that they cannot be connected due to a lack of ONTs.”

Spending on cable, DSL, fixed wireless CPE, and PON was USD 8.5 billion in the first half of 2022, and the market has yet to see the bulk of spending that could be driven by government funding programs.

“At this point, the bulk of the subsidies through RDOF, BEAD, and other national initiatives have not flown through to the equipment vendors yet,” Heynen added. “That money will really start to make an impact beginning next year through 2026. However, the pending distribution of subsidies is forcing other ISPs, including cable operators, to accelerate their network upgrade plans to stay ahead of any expansion projects. So right now, there is more of an indirect acceleration of demand rather than direct increase due specifically to funding.”

On a regional basis, the total market was stronger in North America, where equipment revenue increased at a double-digit rate in the first half of 2022, compared to last year, and in China, which showed a high single-digit increase. Europe, after two straight years of health growth in telecom equipment revenues, witnessed a decline, with the drive downward helped by the exits of players, such as Nokia and Ericsson from Russia, as well as the stronger US dollar.

Absent of a market surge, there has not been much movement in market share worldwide among the top seven vendors between 2021 and the first half of 2022. Huawei retained the top position by a wide margin, with Nokia just ahead of Ericsson as companies continued in a fight for second place that has remained very tight since 2020. They were followed in order by ZTE, Cisco, Samsung, and Ciena, with the latter two continuing their own neck-and-neck race for the sixth place.

In 2021, the overall telecom equipment market advanced 7 percent, recording a fourth consecutive year of growth, underpinned by surging wireless revenues and healthy demand for wireline-related equipment, spurred on by double-digit growth both in RAN and Broadband Access. Total worldwide telecom equipment revenues approached USD 100 billion, up more than 20 percent since 2017.

The collective global share of the leading suppliers remained relatively stable between 2020 and 2021, with the top seven vendors comprising around 80 percent of the total market.

Ongoing efforts by the US government to curb the use of Huawei’s equipment is impacting the company’s position outside of China. Even so, Huawei continued to lead the global market, underscoring its grip on the Chinese market, depth of its telecom portfolio, and resiliency with the existing footprints.

Outside of China, Ericsson and Nokia essentially tied at 20 percent and Huawei accounting for around 18 percent of the market.

With the two Nordic vendors planning to fully exit the Russian market by the end of 2022, the market will likely shift all of Russia’s future wireless networking needs to Chinese vendors, Huawei and ZTE.

Nokia counted about 2000 employees in Russia prior to the Ukraine invasion. Ericsson counted 400 employees in Russia and will take a USD 95-million financial impairment due to the move. Currently, the combined share of Huawei and ZTE in Russia’s market for radio access network (RAN) products, for instance, is about 50 percent.

Once the telecom equipment term is widened, and it includes network communication equipment, mobile communication devices and optical communication equipment, the market is estimated at USD 538.9 billion in 2021, poised at a 6.9 percent CAGR to reach USD 967.9 billion in 2030, estimates Maximise Market Research Pvt. Limited.

Apart from Huawei, Nokia, and Ericsson, this includes equipment from Cisco Systems Inc., Barcodes Inc., Samsung Electronics, Fujitsu Limited, Juniper Networks, Ciena Corporation, FiberHome Telecom, ZTE Corporation, Qualcomm Technologies, and Ribbon Communications, among a few others.

More companies are investing capital in data hardware, such as cell towers, satellite communication, and broadband spectrum. All these factors have led to more sales of telecom equipment, such as micro receivers, phones, and Ethernet cables. In areas, such as banking, transport, education, healthcare, shopping, and personal data analysis, the use of the internet has increased. Rising digital transformation is expected to provide lucrative opportunities for the market to grow over a period of time.

The Indian telecom equipment market is dominated by Nokia, Ericsson, Huawei, and Samsung. Huawei continues to face massive headwinds in India, with no new network contracts likely to come its way. The Chinese multinational so far has not been granted the mandatory trusted sources tag, thus excluding it from any further possibility of 4G expansion and 5G network rollout. Samsung, Ciena, Mavenir, among others, are heading to gain share. Having said this, while telcos are finding it feasible to phase out Huawei’s core, it would be a much costlier job to replace Huawei’s 4G radios.

Indigenous manufacturers as Tejas Networks are seeing success, and moving forward are poised for large orders. Tata Consultancy Services has set up a consortium in partnership with Tejas and C-DoT. It has carried out a proof-of-concept for BSNL and by end-December seems likely to land a contract of ₹27,000 crore for the supply of 100,000 towers, paving the telco’s way to launch 4G services in India. Tejas Network will manufacture the equipment locally for BSNL. In October, TCS said it would provide the core equipment within 12 months of the order. Radio equipment would be provided within 24 months of receiving the order. Tejas had recently also received an order for ₹128 crore for the augmentation of PGCIL’s pan-India telecom backbone and access networks.

Tata is not the only conglomerate with vendor ambitions, though. Jio Platforms has also been developing its own 5G stack, which it plans to sell globally after deployment in India. Both companies will undoubtedly target the space left vacant by Huawei.

With the Made in India push from the Indian government, there will be new entrants in the market for Open RAN architecture too that provides opportunity for new players to enter the market.

The government has extended the production-linked incentives (PLI) scheme to the telecom equipment sector to boost domestic manufacturing and attract investments. In February 2021, the DoT had announced the PLI scheme for telecom and networking products, with a budget outlay of ₹12,000 crore to be disbursed for a period of five years. The PLI scheme was amended in April this year to introduce 5G design-led manufacturing criteria with an additional incentive of 1 percent over the existing rates of incentive.

Currently, 42 companies, including 28 micro, small, and medium enterprises have been selected as beneficiaries by the Department of Telecommunications. Altogether, the selected companies have committed to invest ₹4000 crore. Of these, 17 companies, including Nokia, Jabil, and Tejas, have applied for an additional 1 percent incentive under the PLI criteria introduced for 5G design-led manufacturing.

India is keen to upgrade its telecom services to 5G standard and selected telecom equipment makers have reportedly increased their investment under the PLI scheme by more than ₹500 crore.

Overall, the government estimates the telecom PLI scheme to generate additional sales worth ₹2.45 lakh crore (USD 29.99 billion) and create more than 44,000 jobs. The PLI scheme has the potential to reduce the share of telecom imports in overall demand to under 50 percent (from 75–85 percent). However, it can be constrained by low cap on R&D investments, and pricing pressure in the telecom industry.

The fledgling domestic equipment industry missed the last wireless CapEx boom over fiscals 2016–2021, which saw telcos pump ₹3 lakh crore to strengthen their 4G networks, as they were largely dependent on global vendors for their core, radio, and transport network rollouts.

5G networks, however, are expected to see significantly higher investments as they entail at least 70-percent tower fiberization levels (30–35 percent presently), and 4–20 times higher radio site deployments compared with 4G. This would lead to higher investments in optical and radio networks, respectively. With PLIs covering major telecom equipment, except optical fiber, domestic gear manufacturers can leverage a ₹50,000-crore market opportunity, which is expected to double by fiscal 2025.

Additionally, the advent of open RAN, which seeks to end the proprietary RAN set -up, will result in the disaggregation of hardware and software at radio sites, allowing domestic gear makers to manufacture and innovate in individual modules, such as antennas and remote radio heads, or more contemporary forms of radio nodes, such as small cells.

The Indian telcos are expected to invest ₹4 lakh crore in the next 5 years. While Airtel is introducing Samsung as an entirely new supplier, it is also sticking with the Nordic vendors it used previously. If the reports are accurate, Jio will also continue to rely on Samsung as an existing vendor, besides giving some work to Ericsson and Nokia. This all holds out the possibility of 4G swaps – perhaps, in Airtel’s case, to remove Huawei. But it was never likely that operators would switch to new vendors across their entire estate.

In FY22, the global chip shortage emerged as a key challenge for the entire telecom equipment industry. Since component shortages and supply chain disruption is likely to continue over the next two years, vendors have taken advance inventory ordering actions to fulfil their strong order book. The Indian vendors needing huge volumes does give an edge over some other buyers and they often receive priority in component allocation in the current constrained environment.

Globally, the 5G cycle may be longer than previous technology cycles; however, the two Indian telcos, Reliance Jio and Bharti Airtel are moving at breakneck speed, undertaking one of the fastest global roll-outs of 5G services in any country.

Nokia creates technology that helps the world act together. Connectivity and digitalization play a critical role in helping to solve many of the world’s greatest challenges. The company’s sustainability strategy is focused on the areas that will have the greatest impact on sustainable development and its profitability: climate, integrity and culture.

Of Nokia Corporation’s total net sales of € 6241 million, Nokia India constituted € 281 million (₹2250 crore) in Q3 2022, and of total global sales of €5399 million, Nokia India constituted € 250 million (₹2156 crore) in Q3 2021. The India net sales in Q1-Q3 2022 was € 722 million (₹5780 crore), compared to € million 787 million (₹6785 crore), in Q1-Q3 2021, an 8 percent YoY decline.

Share of net sales of Nokia India in the overall sales declined from 4.98 percent in Q1-Q3 2021 to 4.13 percent in Q1-Q3 2022 and to 4.5 percent in Q3 2022 from 4.63 percent in Q3 2021.

There was a slight decline in net sales in Q3 2022 related to Mobile Networks, due to the timing of 5G licenses in India. It is expected to ramp up over the coming quarters.

In 2021, Nokia India had seen a 9 percent increase over 2020, from € 954 million (₹8514 crore), in 2020 to €1039 million (₹8751 crore), in 2021.

Nokia India has increased their inventory for upcoming deployments. The global company’s increase in inventories amounted to €480 million in Q3.

Nokia India has 12,000 net m2 productive capacity in Chennai and manufactures base stations, radio controllers and transmission systems. The company has about ~ 17000 employees.

The group subsidiaries in India include Nokia India Private Limited and Comptel Communications India Pvt Ltd.

Nokia India

Net sales in (€ mn)

Period Nokia India Nokia Corporation
Jan-Sept 2022 722 17,462
Jan-Sept 2021 787 15,788
July-Sept 2022 281 6241
July-Sept 2021 250 5399
Jan-Dec 2021 1039 22,202
Jan-Dec 2020 954 21,582

Net revenue to external customers

2021 2020
Nokia India 1039 954
Nokia Corporation 22,202 21,852

Pekka Lundmark
President and CEO,

“Our third quarter performance demonstrates we are delivering on our ambition to accelerate growth.

This did include some catch up sales as supply chain constraints eased. However, we are seeing good traction in the market for our products, and in North America in particular we continued our strong performance, and we also grew in Latin America and Europe. One of the highlights of the quarter was seeing the 5G journey taking off in India, expected to ramp up strongly in 2023. Nokia secured important deals with the big players as Bharti Airtel and Reliance Jio. These deals strengthen our confidence that we are firmly on a path to grow faster than the market.

As we start to look beyond 2022, we recognize the increasing macro and geopolitical uncertainty within which we operate. While it could have an impact on some of our customers’ capex spending, we currently expect growth on a constant currency basis in our addressable markets in 2023. Considering our recent success in new 5G deals in regions like India which are expected to ramp up strongly in 2023, we believe we are firmly on a path to outperform the market and to make progress towards achieving our long-term margin targets.”

Nokia Corporation
Third quarter performance demonstrates the vendor is delivering on its ambition to accelerate growth. Net sales grew 6 percent in constant currency as supply constraints started to ease and it maintained good profitability with comparable operating margin of 10.5 percent. This was slightly down year-on-year, as improving profitability in Mobile Networks and Network Infrastructure was offset by timing effects of contract renewals in Nokia Technologies.

Mobile Networks saw a strong quarter, which grew 12 percent in constant currency as the vendor benefited from improved competitiveness and improving supply situation. Net sales growth remained robust also in Network Infrastructure at 5 percent, driven by continued strong underlying demand trends.

Cloud and Networks Services declined 3 percent as it worked to rebalance the portfolio, but with improving gross margin.

Nokia Technologies continued to deliver good progress in its patent licensing growth areas, such as automotive and consumer electronics. These areas, which were negligible in 2018, now contribute over €100 million in net sales in the past 12 months.

Enterprise net sales growth accelerated to 22 percent in constant currency. The vendor has strong momentum in Enterprise, including adding 30 new private wireless customers in the quarter and a further new IP Routing customer in webscale. With this momentum, Enterprise is expected to remain the fastest growing customer segment.

Nokia Corporation

Financial Highlights

 Profit and loss statement (€ mn)

Item Q1-Q3’22 Q1-Q3’21 2021
Net sales 17,462 15,788 22,202
Gross margin % 40.30 39.90 39.80
R&D expenses (3328) (3096) (4214)
Selling, general and administrative expenses (2174) (2034) (2792)
Operating profit 1436 1418 2158
Operating margin % 8.20 9 9.70
Profit for the period 1107 965 1654
EPS, diluted 0.19 0.17 0.29

Nokia expects:

  • To deliver a largely stable operating profit performance in 2022 (assuming the conclusion of some outstanding deals) and over the longer term;
  • The net negative impact of Group Common and Other to be € 250 million in 2022 and over the longer term;
  • In full year 2022, Nokia expects the free cash flow performance of Nokia Technologies to be approximately € 450 million lower than its operating profit, primarily due to prepayments received from certain licensees in previous years;
  • Comparable financial income and expenses are now expected to be an expense of approximately € 50–150 million in full year 2022 and over the longer term. There is currently greater uncertainty due to the foreign exchange volatility and associated impacts;
  • Comparable income tax expenses are expected to be approximately € 450 million in full year 2022 and over the longer term;
  • Cash outflows related to income taxes are expected to be approximately € 400 million in full year 2022 and over the longer term; and
  • Capital expenditures are expected to be approximately € 600 million in full year 2022 and around € 600 million over the longer term with some variation year-to-year.

Mobile Networks
Mobile Networks provides products and services for radio access networks covering technologies from 2G to 5G, and microwave radio links for transport networks.

Segment net sales (€ mn)

Segment operating margin (%)

Outlook. As Nokia starts to look beyond 2022, the vendor recognizes the increasing macro and geopolitical uncertainty within which it operates. While it could have an impact on some of its customers’ CapEx spending, it currently expects growth on a constant-currency basis in its addressable markets in 2023. Considering recent success in new 5G deals in India, which are expected to ramp up strongly in 2023, Nokia believes it is firmly on a path to outperform the market and to make progress toward achieving its long-term margin targets.

Network infrastructure
Network infrastructure provides fiber, copper, fixed wireless access technologies, IP routing, data center, subsea and terrestrial optical networks – along with related services – to customers including communications service providers, webscales (including hyperscalers), digital industries and governments.

Outlook – 2022 (€ mn)

Segment Total addressable market Assumptions
Mobile Networks 52 6.5 to 9.5%
Network Infrastructure 48 9.5 to 12.5%
Cloud & Network Services 28 4 to 7%
Nokia Technologies >75%
Nokia total addressable market 127

Nokia Corporation’s long-term targets remain its responsibility to enable digitalization. It partners with its customers so that its technology can help meet some of the most pressing challenges the world faces such as climate change, the digital divide and stalling productivity growth. The company has significantly reduced the carbon footprint of its products, which in turn reduces the ecological impact of customers. Through technology leadership and trusted partnerships Nokia Corporation is making a difference in the world.

Cloud and Network Services
Cloud and Network Services enables CSPs and enterprises to deploy and monetize 5G, cloud-native software and as-a-service delivery models.

Segment net sales (€ mn)

Segment operating margin (%)

Nokia Technologies
Nokia Technologies is responsible for managing Nokia’s patent portfolio and monetizing Nokia’s intellectual property including patents, technologies and the Nokia brand.

Ericsson’s strategy is to create long-term value through technology leadership. We aim to address long-term opportunities that present clear advantages of scale and new, profitable revenue streams. The company’s ambition is to grow faster than the market through organic growth and acquisitions, with a focused approach.

Q3 2022. Ericsson Group net sales in the quarter grew by 3 percent organically, driven by strong performance from Networks. EBITA of SEK 7.7 billion corresponded to a margin of 11.3 percent, where higher gross income from business growth was offset by increased technology investments and the consolidation of Vonage with acquisition accounting and one-time acquisition costs.

The Networks business saw strong organic sales growth of 7 percent excluding IPR (4 percent including IPR), with growth driven by market-leading portfolio, primarily in North America, where operators continue to forcefully drive 5G deployment. After expected record operator CapEx in 2022 in North America, the vendor anticipates RAN CapEx to hold up well in 2023, albeit at a lower level than this year. Ericsson continues to further strengthen its position by increasing global footprint, which will lead to overall growth in 2023.

In the Enterprise Wireless Solutions business, the vendor has almost doubled sales in Q3 2022 compared with Q3 2021.

In the new Cloud Software & Services segment, revenues were impacted by lower Managed Services sales and IPR revenues. Gross income was stable after offsetting ongoing 5G Core deployment costs, the ambition being to unleash the great potential present in this business. Its new management team is taking further actions to turn around the business and establish a satisfactory profitability. This includes strong focus on driving down costs, including realizing synergies from combining two business areas, while solidifying its technology and market leadership position. Improvements in performance will be gradual.

In the current inflationary environment, pricing adjustments as well as leveraging product substitution to manage margins are being made. Operations across the company are being simplified, and it will continue to be proactive in reviewing options to reduce costs, whilst continuing to develop best-in-class products and services. Fundamentally, cost competitiveness through an intense focus on internal end-to-end efficiency gains and structural costs is being strengthened. Ericsson is dedicated to the long-term target of EBITA margin of 15–18 percent no later than 2024, and will take out costs to secure delivery of this target. In order to deliver on the cost reductions, it expects restructure costs to increase and be more in line with the long-term guidance of 1 percent of net sales, albeit varying by quarter. Cost efficiency is also crucial to allow investments in technology leadership and to strengthen resilience in an uncertain market.

During 2021, Ericsson capitalized on the strength of its core infrastructure business and continued to build a foundation for growth that takes advantage of new opportunities in enterprise digitization. The vendor expanded its market share and improved gross margins.

Borje Ekholm
President and CEO ,

“We see robust underlying performance and strong momentum in the business as we continue to execute on our strategy. This includes leadership in mobile networks by growing market share. Since 2017, we have increased RAN market share, excluding Mainland China, from 33 percent to 39 percent, and we have had multiple contractual wins across geographies in this quarter. We continue to solidify our strong position in 5G to capture the considerable opportunities presented by the fastest-scaling mobile generation. Our expansion into the exciting high-growth Enterprise space is gaining momentum with the acquisition of Vonage, providing us with access to a powerful range of cloud communication services.”

In addition to growing its core business, the vendor pursued opportunities in the enterprise space – leveraging the strength of its mobile technology. These included dedicated networks, wireless WAN, and IoT connectivity.

Ericsson India Global Services Private Limited

Standalone profit and loss statement (₹ crore)
Particulars FY22 FY21
Revenue from operations 10,939.00 10,779.30
Other Income 142.80 437.90
Total revenue 11,081.80 11,217.20
Total expenses 9964.50 9911.30
Net profit after tax 801.00 878.90
EPS-diluted 274.88 301.62

Ericsson acquired Vonage, a global provider of cloud-based communications, with over 120,000 enterprise customers and more than one million registered developers. Through Vonage, it offers unified communication and contact center platforms to its existing customer base. Vonage is being run as a new business area. This follows the same integration approach taken with Cradlepoint, which is performing well, in line with its acquisition plans, despite a delayed uptake of 5G devices.

Balance sheet  (₹ crore)

Particulars FY22 FY21
Current assets 5774.30 5663.30
Non-current assets 1012.10 1102.20
Total assets 6786.40 6765.50
Total equity 3155.80 3004.50
Total liabilities 3630.60 3761.00
Total equity and liabilities 6786.40 6765.50

Business performance. In 2021, Ericsson continued its strategy execution and cemented its position as a global 5G leader. Its strong product portfolio and deep R&D capabilities supported market share gains despite considerably lower sales volumes in Mainland China. By year-end, Ericsson supplied 108 out of 200 live 5G networks.

Sales in 2021 remained stable at SEK 232.3 billion, impacted by reduced market share in Mainland China and currency. Organic sales growth excluding the impact from market share loss in Mainland China was 8 percent. Gross margin, excluding restructuring charges, amounted to 43.5 percent, an increase from 40.6 percent in 2020, driven by operational leverage and improved competitiveness. EBIT margin, excluding restructuring charges, amounted to 13.9 percent, up from 12.5 percent as a result of improved gross income, primarily driven by Networks.

Ericsson offers telecom operators a comprehensive portfolio, incrementally evolving operators’ long-term opportunities in 5G and beyond, with cost-efficient communications solutions.

Profit and loss statement (SEK bn)

Particulars Jan-Sep 2022 Jan-Sep 2021 YoY change
Net Sales 185.6 161.0 15%
Gross income 77.7 69.9 7%
Gross margin (%) 41.9 43.4
R&D expenses (34.1) (30.2)
Selling and administravive expenses (23.9) (19.3)
Important losses on trade receivables (0.1) (0.1)
Other operating income and expenses (0.4) (0.1)
EBIT 19.2 19.9 (4)%

         of which Networks

26.1 25.5 26%

         of which Cloud Software

         and Services

(2.4) (2.8)
      of which Enterprise (3.3) (2.2)

      of which Other

(1.2) (0.6)
Net Income 12.9 12.8 1%
EPS-diluted, SEK 3.80 3.79 0%

Networks offers multi-technology-capable radio access network (RAN) solutions for all spectrum bands. Networks’ largest addressable market is the RAN market, which according to Dell’Oro amounted to around USD 42 billion in 2021. Driven primarily by 5G rollout, the RAN market grew by 12 percent in 2021, and is expected to grow by 5 percent in 2022. Through technology leadership and leveraging the competitive 5G portfolio, Ericsson’s market share increased to around 39 percent, excluding Mainland China, in 2021.

Sales by region (SEK bn)

Segment Jan-Sep 2022 Jan-Sep 2021
North America 70.1 55.2
Europe and Latin America 45.9 41.0
South East Asia, Oceania, and India 21.7 20.2
North East Asia 18.3 19.3
Middle East and Africa 15.2 13.8
Others 14.3 11.4
Total 185.6 161.0

Some 80 percent of the 20 largest telecom operators, by revenue, have chosen Ericsson for standalone core (5GC), a solid base to build on when the more than 250 remaining existing customers are to make their vendor choices. All of Digital Services’ portfolio areas contribute to the 5G business and technology shift and 5GC serves as a beachhead to attach sales from other parts of the portfolio.

Sales by segment (SEK bn)

Segment Jan-Sep 2022 Jan-Sep 2021 YoY change
Networks 134.8 116.7 16%
Cloud Software & Services 40.3 38.3 5%
Entreprise 8.8 4.4 98%
Other 1.6 1.5 5%
Total 185.6 161.0 15%

Globally, the core networks market is dominated by a handful of vendors. Ericsson is the second largest. Most of the markets for the other parts of the Digital Services portfolio are much more fragmented, where the market leaders are estimated to have 7–15 percent market share.

Ericsson is a leader in Managed Services, managing networks for approximately 200 customers, together serving more than one billion subscriptions. Out of these customers, 20 – representing more than 500 million subscriptions – have transformed to the Ericsson Operations Engine in 2021, from 10 in 2020, 11 of which are running live 5G networks.

The addressable market for Managed Services was USD 34 billion in 2021, and is expected to grow with a 3–5 percent CAGR between 2021 and 2023. The addressable market represents 27 percent of the telecom operators’ total Network, IT, and NDO-related operating expenditures. The balance is covered by the telecom operators’ in-house activities. Demand for Managed Services is mainly driven by increased complexity in the customers operating environment due to the continued adoption of 5G and virtualized networks.

Ericsson addresses Enterprise segment with a growth rate of 20–30 percent CAGR, with an increasing need for wireless, reliable and secure connectivity, and where there are opportunities for platform economics. The total addressable market in Enterprise for Ericsson is worth an estimated USD 15–25 billion by 2025. Its private 5G networks, Cradle-point Wireless WAN solutions and the IoT Accelerator platform, make it possible for enterprises to use technologies like AR/VR at scale to process large sets of data, support autonomous operations in factories and at logistical sites, and use real-time analytics to manage drones and other moving objects.

Consolidated profit and loss statement (SEK mn)

Particulars 2021 2020
Net sales 232,314 232,390
Cost of sales (131,565) (138,666)
Gross income 100,749 93,724
Operating expenses (69,071) (66,280)
EBIT 31,780 27,808
Net income 22,980 17,623
EPS (SEK) 6.81 5.26

2021 was a year marked by global challenges, including geopolitical ones, which required a lot from the Ericsson organization. We also saw a continuation of the pandemic and the difficulties it caused, such as global supply chain issues and economic disruptions. Ericsson demonstrated its ability to adapt to demanding realities by strengthening supply chain resilience and by working remotely.

Consolidated balance sheet (SEK mn)

Particulars 2021 2020
Current assets 174,805 149,795
Non-current assets 130,809 121,736
Total assets 305,614 271,530
Total equity 107,099 85,177
Current liabilities 126,952 114,320
Non-current liabilities 71,563 72,033
Total equity and liabilities 305,614 271,530

By leveraging its competitive 5G portfolio, Ericsson continued to build on the strong foundation of its core business and increased its overall footprint across the market, despite a major drawback in Mainland China.

Ericsson’s ambition is to continue to grow and develop its core mobile infrastructure business, based on market growth and market share gains. With the investments made in enterprise, through pre-packaged wireless solutions and global network platform, the vendor is putting its company on a higher growth trajectory. Even though investments outside its core business may hurt profitability short term, the pace has been accelerated toward reaching the long-term target of an EBITA margin (excluding restructuring charges) of 15–18 percent. After delivering an EBITA margin (excluding restructuring charges) of 14.6 percent in 2021, the ambition is to reach the long-term target no later than in 2 to 3 years.

Huawei Telecommunications India Private Limited
Huawei once looked unstoppable. Having gained share in the Indian telecom gear market since 2017, the vendor’s revenue in India increased from ₹6430.20 crore in FY17, to ₹8282.10 crore in FY18, peaking to ₹12884.10 crore in FY19, it dropped drastically to ₹6658.90 crore in FY20, further dipping to ₹3703.60 crore in FY21. The vendor has not yet filed its annual results for FY22 with the Ministry of Corporate Affairs, Government of India.

Huawei continues to face massive headwinds in India, with no new network contracts likely to come its way. The Chinese multinational so far has not been granted the mandatory trusted sources tag, thus excluding it from any further possibility of 4G expansions and 5G network rollout.

At present, Vodafone Idea has the maximum number of Huawei network sites, followed by Airtel, which has Huawei networks in Karnataka. In February 2022, Bharti Airtel awarded a ₹300-crore order to Huawei to upgrade and expand its national long-distance (NLD) network, which is currently run by the Chinese vendor. This is part of an ongoing Airtel process; the telco had in 2021 awarded a similar contract to Huawei worth ₹300 crore.

On February 15, 2022, the income tax department accused Huawei of irregularities in declarations made. Search and seizure operations were conducted on Huawei India offices spread across Delhi, Gurugram, and Bengaluru, and the residential premises of the key office bearers. Investigations are in progress.

The vendor has also been facing challenges to continue R&D activities in particular, as several ministries including home ministry, education ministry, and others have informally placed restrictions on any collaborations with the company. Huawei’s troubles are further exacerbated by the denial of visas to its product and technology experts from China.

Regardless, Huawei has displayed a positive stance. “India market is very complex with many challenges. Recent developments in India have undoubtedly been a test for Huawei. Just as our customers in India have overcome their many challenges to find solutions, we are confident that issues here will also be addressed similarly. Our relationship with our customers across enterprise and telecom has been built over decades, powered by our core value of customer-centricity. We will continue to be rooted in India and serve our customers well,” said a Huawei senior spokesperson.

Huawei Investment & Holding Co., Ltd.
On the global front too, Huawei continues to wrestle with US regulator claims about fears the Chinese government would be able to monitor communications and spy on customers, and it has been forced to exit the US market in recent years. While US regulators do not have any proof about this claim, Huawei has not been successful countering it either. This has been holding up the company’s activities over the last decade.

Huawei Investment & Holding Co., Ltd.

Consolidated income statement (CNY million)

Particulars 2021 2020 YoY
Revenue 636,807 891,368 (28.6)%
Gross profit 307,442 327,132 (6)%
           Gross profit margin (%) 48.3 36.7 11.6%
Total operating expenses (246,827) (255,323) (3.3)%
           as % of revenue 38.8 28.6 10.2%
Other net income 60,797 692 8685.7%
Operating profit 121,412 72,501 67.5%
           as % of revenue 19.1 8.1 11.1%
Net finance income 493 (367) (234.3)%
Income tax (8227) (7655) 7.5%
Net profit 1,113,718 64,649 75.9%

Most cripplingly, USA it used export controls to starve the company of American technology and products, including computer chips, on which many manufacturers rely.

Consolidated balance sheet (CNY million)

Particulars 2021 2020
Current assets 769,378 691,394
Non-current assets 213,593 185,460
Total assets 982,971 876,854
Total equity 414,652 330,408
Non-current liabilities 175,864 154,114
Current liabilities 392,455 392,332
Total equity and liabilities 982,971 876,854

Xu Zhijun
Rotating Chairman,

“The overall operating results are in line with the expectations. The downward trend of the terminal business continues to slow down and the ICT infrastructure business maintains a stable growth. Huawei will continue to attract outstanding talents, constantly invest in research and development, continuously improve product competitiveness for customers, and create value for society”

In October 2022, US Department of Justice (DoJ) arrested two Chinese citizens who work for the company in the US, and filed 13 charges in three separate cases. DoJ maintained that the Chinese intelligence agents, put together a scheme to steal files and other information from the US attorney’s office for the Eastern District of New York, which is also conducting the ongoing investigation into Huawei.

Huawei Investment & Holding Co., Ltd.

Revenue (CNY million)

By segment

Particulars 2021 2020
Carrier business 281,469 302,621
Enterprise business 102,444 100,339
Consumer business 243,431 482,916
Others 9463 5492
Total 636,807 891,368

In the latest blow, on December 1, 2022 the Biden administration banned the sale or import of new telecommunications equipment from China’s Huawei Technologies (and ZTE). “China will adopt necessary measures to safeguard the legitimate rights of domestic firms,” responded Chinese commerce ministry spokesperson, Shu Jueting, urging the United States to correct the wrongdoing and stop politicizing and weaponizing economic and trade issues.

As the US urged allies to drop the vendor from their 5G mobile networks, Canada, UK, Sweden, France, Australia, and New Zealand banned the Chinese vendor. The constant risk of fresh restrictions has led many customers in places without bans to steer clear of Huawei. This has already happened in Italy and Portugal. However, it has not always been a win-win for the US in the war against Huawei. The company is involved in 5G networks in NATO members, Hungary, Iceland, the Netherlands, and Turkey. Likewise, some of the US’ closest partners in the Middle East, including Saudi Arabia and the United Arab Emirates, are also using Huawei. Some countries as Vietnam and Japan have taken a cautious approach. Huawei executives boast of more than 5000 commercial 5G contracts globally, ranging from full deployment of 5G networks for national carriers to upgrading networks at ports.

Overall, outside China, Huawei is in a survival mode. Founder Ren Zhengfei has said that Huawei would be shutting down marginal business units.

Huawei Investment and Holding Co. Ltd. revealed a deepening decline in earnings since 2021. If only three vendors, Ericsson, Nokia, and Huawei are considered, the global market share of the Chinese MNC in 2017 was 64 percent, 68 percent in 2018, 70.9 percent in 2019, 71.3 percent in 2020, and 66.2 percent in 2021. However, Huawei continues to retain its top position worldwide by a wide margin.

Huawei Investment & Holding Co., Ltd.

(CNY mn)

Region 2021 2020
China 413,299 597,983
EMEA 131,467 180,819
Asia Pacific 53,675 64,466
Americas 29,225 39,664
Others 9141 8436
Total 636,807 891,368

In the first three quarters of 2022, the vendor gained a total revenue of 441.141 billion yuan (USD 60.41 billion), resulting in a net profit of 23.927 billion yuan (USD 3.15 billion). While Huawei’s device business was heavily impacted, the ICT infrastructure business maintained steady growth.

Xu Zhijun, Rotating Chairman, acknowledged in a couple of interviews that Huawei faced challenging times, but stated it continues “to believe deeply in the power of digital technology to provide fresh solutions to the problems the world is facing right now.”

Ren Zhengfei, founder and CEO, Huawei Technologies, is hell-bent on transforming the company from one laser-focused on a few core telecoms products to a provider of tech and services to a variety of industries, from car making to agri business.

He wants Huawei to become a purveyor of technology to a wide spectrum of industries. It has already sold 300 million devices running on Harmony, including laptops and wearables, such as smart watches and app-controlled home appliances. It is now attempting to re-launch the production of 5G phones, using less advanced chips.

It is also expanding its enterprise division. The unit is building data centers and cloud-computing businesses around the world. Its prospects look strong in China, where the chief source of demand over the next decade will be the government and state-owned firms.

Huawei does not enjoy a technical advantage in such infrastructure-as-a-service (IaaS) over giant local rivals like Alibaba and Tencent.

But it has the government connections needed to win the juiciest contracts, says Yi Zhang of Canalys. In just a few years, this has helped Huawei become the second-largest cloud provider in China, behind Alibaba. Many Chinese firms are tossing out Oracle databases and asking Chinese companies to build local ones. Huawei is scooping up this business. As revenues from devices tumbled in the first half of 2022, its overall sales from the enterprise division surged by 28 percent to 55 bn yuan (USD 7.6 bn), or about 18 percent of total revenues. Gartner reckons that Huawei has become the world’s fifth-largest IaaS provider. However, barriers to entry in such businesses are high even in places that welcome Huawei.

Taken together, the changes amount to a revolution in how Huawei functions as a business. Its one-way end-to-end system is being replaced by a more open, two-way model, where Huawei develops products in partnership with its growing array of client industries.

With his company’s 100,000 engineers having an enviable record of inventiveness, Ren could yet pull off the transformation!

Ciena Corporation
For fiscal year 2022 (November 2021–October 2022), Ciena reported revenue of USD 3.63 billion, as compared to USD 3.62 billion for fiscal year 2021. For fiscal fourth quarter 2022, Ciena reported revenue of USD 971.0 million as compared to USD 1.04 billion for the fiscal fourth quarter 2021.

Ciena’s GAAP net income for fiscal year 2022 was USD 152.9 million as compared to GAAP net income of USD 500.2 million for fiscal year 2021. Ciena’s adjusted (non-GAAP) net income for the fiscal year 2022 was USD 288.9 million as compared to adjusted (non-GAAP) net income of USD 456.5 million for fiscal year 2021.

Two customers each represented 10 percent-plus of revenue for the fiscal fourth quarter and fiscal year 2022, combining for a total of 25.6 percent of revenue for the fiscal fourth quarter and 23 percent of revenue for the fiscal year 2022.

Ciena India Private Limited

Standalone profit and loss statement (₹ crore)

Particulars FY22 FY21
Revenue from operations 763.84 626.99
Other Income 6.68 3.64
Total revenue 770.52 630.62
Total expenses 679.77 562.52
PAT 69.51 49.21
EPS (diluted) (₹) 34.96 24.86

Inventories totalled USD 946.7 million, including USD 664.9 million of raw materials, USD 18.2 million of work in process, and USD 258.6 million for finished goods and Deferred cost of sales amounted to USD 41.1 million. Ciena Corporation currently has 8079 employees.

Balance sheet (₹ crore)

Particulars FY22 FY21
Current assets 428.43 321.32
Non-current assets 230.31 274.69
Total assets 658.74 596.01
Total equity 422.76 357.48
Total liabilities 235.98 238.53
Total equity and liabilities 658.74 596.01

In the routing and switching portfolio, quarterly revenue was up nearly 40 percent year-over-year in Q4 as Ciena Corporation benefited from the addition of the Vyatta Solutions and organic portfolio enhancements.

Ciena Corporation

GAAP-Unaudited (USD mn)

Particulars 2022 2021 YoY*
Revenue 3632.7 3620.7 0.3%
Gross margin (%) 43.0 47.6 (4.6)%
Operating expense 1337.5 1226.6 9.0%
Operating margin (%) 6.1 13.7 (7.6)%
Adjusted EBITDA 502.4 702.8 (28.5)%

*Denotes % change, or in the case of margin, absolute change

During Q4, the company reached a milestone of more than 200 Adaptive IP customers, fuelled by momentum in coherent routing, metro aggregation, PON, and high-speed business services. And it continues to invest in its next-gen metro and edge strategy, particularly in its routing and switching portfolio.

Ciena Corporation recently closed the acquisition of Benu Networks, and announced that plans to acquire Tibit Communications, which is expected to close in Q1’23. These acquisitions will enable the company to build upon its existing strategic investments in fiber broadband access and pursue a larger set of opportunities in this market segment.

Statement of operations (USD mn)

Particulars 2022 2021
          Products 2888.85 2932.60
          Services 743.81 688.08
Total revenue 3632.66 3620.68
Cost of goods sold
          Products 1699.63 1545.27
          Services 372.69 353.44
Total cost of goods sold 2072.32 1898.70
Gross profit 1560.34 1721.98
Net income 152.90 500.20

Specifically, the addition of advanced subscriber management and next-generation PON technologies will advance its ability to address fast-growing applications, including residential broadband, enterprise business services, and fixed-wireless access. This also represents a significant addressable market expansion for Ciena, and is expected to be a considerable investment area for many of its customers.

Consolidated unaudited balance sheet (USD mn)

Particulars 2022 2021
Total assets 5069.63 4865.23
Total liabilities and stockholders’ equity 5069.63 4865.23

In optical, Ciena added 15 new customers for WaveLogic 5e in Q4, bringing the total global customer count to more than 200 with more than 50,000 WaveLogic 5e modems shipped to date. In Blue Planet, the company won several new logos during the year, while expanding its presence at a number of Tier-I service providers.

Ciena Corporation

Revenue by region (Unaudited) (USD mn)

Particulars 2022 2021
Americas 2636.9 2525.6
Europe, Middle East, and Africa 555.2 670.5
Asia Pacific 440.6 424.6
Total 3632.7 3620.7

Additionally, the strategic win at DISH has now gone live with both its inventory and service order orchestration solutions. And, the network transformation services grew 50 percent year-over-year, reflecting the increased demand from customers to move from legacy to next-generation networks. And, with respect to diversification, its non-telco revenue was approximately 40 percent for the year. And, within that, 4 of the top 10 customers were major web scalers. And, like last year, the company had more than USD 1 billion in orders from web-scale customers in FY’22, once again demonstrating continued strong demand from this key customer segment.

Gary Smith
CEO, President & Director,
“Our strong fiscal fourth quarter financial results were better than expected as we benefited from some favorable supply chain developments in the second half of the quarter.

Looking ahead, we expect to deliver outsized revenue growth in fiscal 2023 given our significant backlog and continued signs of gradual supply improvement. And, we remain confident that the durability of secular demand drivers and our strategic investments to expand our addressable market position us to deliver strong revenue growth over the next several years.”

Revenue by segment (Unaudited)
Particulars 2022 2021
Networking Platforms
          Converged Packet                      Optical 2380.0 2553.5
          Routing and Switching 398.4 271.8
          Total Networking                       Platforms 2778.4 2825.3
          Platform Software and              Services 277.2 229.6
          Blue Planet Automation            Software and Services 76.6 77.2
Global Services
          Maintenance Support                and Training 292.4 283.4
          Installation and                          Deployment 157.4 171.5
          Consulting and Network           Design 50.7 33.7
Total 3632.7 3620.7

Samsung India Electronics Limited’s network equipment business in 2021-22 is estimated at ₹4359.8 crore, having contributed 5.3 percent to its overall revenue. Profit before tax of the Networks segment decreased from ₹484.3 crore in FY21 to ₹462.4 crore in FY21, albeit its share increased from 9.38 percent to 10.21 percent in the overall profit.

With Chinese companies, Huawei and ZTE excluded from participating in the 5G rollout in India, it is perhaps Samsung India that stands to benefit the most. The timing seems just right for Samsung, as its exclusive partnership of 2016 for Reliance Jio’s pan-India 4G network has ended in 2020, following the telco’s decision to build everything related to 5G on its own, and no commitment made for future network-related requirements. Samsung completed the last of its deliveries to RJio in 2021-22.

Samsung has since then been in dialogue to secure new network business from the Indian telcos, Bharti Airtel, Vodafone Idea, and BSNL.

In August 2022, Samsung Electronics was awarded an order estimated at ₹19,750 crore from Bharti Airtel. The vendor is providing its 5G radio units, including Massive MIMO radios, in addition to deployment, optimization, and maintenance services. This marked Samsung’s first 5G network agreement in India, as Airtel has a long-standing partnership with Ericsson and Nokia.

The situation seems to be somewhat changing with RJio and Samsung may continue to be a major part of its telecom story. For, at RJio’s AGM 2022, Mukesh Ambani, CMD, Reliance Industries Ltd. announced that RJio had partnered with Samsung, among other networking brands, for its 5G network rollout. While it is unclear which Samsung products RJio is using in its 5G network, it could be radios, core, or 5G vRAN, RJio has undertaken trials with Samsung in Mumbai.

Samsung had earlier also announced that it will not apply for India’s production-linked incentive (PLI) scheme for telecom equipment. The greenfield facility would have involved around ₹800–1000 crore investment, which it considered extremely high in India, at that juncture.

Samsung had explained to the Department of Telecommunications that its plants in Vietnam, South Korea, and China had sufficient capacity, and that it had been importing the equipment duty-free through the free trade agreement (FTA) route from South Korea and Vietnam.

Later, in August 2022, the company applied for the ₹12,195-crore scheme to benefit by locally manufacturing 4G and 5G gear and other equipment. By then the scheme had also been amended in April 2022; to facilitate design-led manufacturing the government had set aside ₹4000 crore. Samsung is now one of the key players to be leveraging the PLI scheme for mobile phones. It was the only company to have achieved investment and output targets under the scheme in the last fiscal year. In July 2021, it had relocated its mobile and IT display production unit from China to its factory in Uttar Pradesh and invested ₹4825 crore.

Samsung Electronics Co. Ltd. has pioneered the successful delivery of 5G end-to-end solutions, including chipsets, radios, and core. Through ongoing research and development, Samsung drives the industry to advance 5G networks with its market-leading product portfolio from RAN and Core to private network solutions and AI-powered automation tools. The company is currently providing network solutions to mobile operators.

Samsung Electronics Co. Ltd.

Profit and loss statement (Korean won mn)

Particulars Jan-Sep 2022 Jan-Sep 2021
Revenue  231,766,785  203,039,275
Cost of sales  141,414,042  121,464,787
Gross profit  90,352,743  81,574,488
Selling and administrative expenses  51,282,244  43,807,344
Operating profit  39,070,499  37,767,144
Net profit after tax (PAT)  31,812,631  29,069,502
EPS (diluted)  4597  4211

Samsung’s Networks Business in Q3’22 saw an improvement in earnings, led by overseas businesses, including securing a deal with Comcast in Q3’22 and with DISH in Q2’22.

Samsung India Electronics Private Limited

Standalone profit and loss statement (₹ crore)

Particulars FY22 FY21
Revenue from operations  82,451.60  75,886.30
Other Income  2873.20  1615.10
Total revenue  85,324.80  77,501.40
Total expenses  79,758.30  71,898.70
Net profit after tax (PAT)  3844.90  4040.90
EPS (diluted) [INR/shares]  177.36  186.40

In fact, the company has seen an increase in revenue every quarter. It plans to sustain revenue growth by expanding both in domestic and exploring new business opportunities in overseas markets, including in North America, Europe, and Japan. At the same time, the company will further improve its in-house 5G chip and solidify foundations for growth and reinforcing technology leadership in vRAN solutions.

Samsung India Electronics Private Limited

Revenue from external customers (₹ crore)

Segment FY22
Audio Visual (AV) 6250.3
Home Appliances (HA) 9981.2
Hand Held Phones (HHP) 55,201.6
Software Development and Export (SDE) 1321.7
Networks 4359.8
All other segments 5337.0
Total 82,451.6

Tejas Networks
FY2021-22 was a landmark year for Tejas Networks, during which the company became a part of the Tata Group. Tata Sons Private Limited, through its wholly-owned subsidiary Panatone Finvest Limited, acquired a majority stake in Tejas Networks. With this move the vendor now has the requisite resources, a trusted brand, and capabilities to truly realize the vision of building a top-tier global telecom equipment company from India, a world class telecom OEM, capitalizing on the end-to-end group capabilities in software and system integration, design and manufacturing of electronic sub-systems and telecom equipment, in which the company will serve as the centerpiece.

As a part of the strategy to build a competitive end-to-end portfolio of products, Tejas Networks has entered the wireless product segment in addition to the wireline segment, which has been its strength thus far. As a part of this initiative, the company demonstrated 4G/5G network and applications on an end-to-end indigenous network, using its designed-and made in India hardware and software products at India Mobile Congress 2022, held recently in the Capital. The management expects large-scale wins starting from India.

This strategy is further strengthened by the acquisition of Saankhya Labs Pvt. Ltd., which enables the company to be a strong player in the broadcast domain and become an active player for wireless, broadband, and broadcast segments, as the industry enters the convergence era. Tejas Networks acquired 64.4 percent of Saankhya Labs in July 2022 and for the balance 35.6 percent, has filed for amalgamation of Saankhya Labs and Saankhya Strategic with Tejas through the NCLT process as on September 30, 2022. Saankhya Labs is synergistic to its business and expands the offering in 5G Open RAN, 5G broadcast, and satellite applications. Saankhya also has strong chip design expertise and has developed its own chip, which is used for satellite and wireless equipment. The wireless product development efforts have been strengthened with the addition of over 250 highly skilled R&D engineers from Saankhya, having experience in wireless system design, hardware, software, as well as chip design. Saankhya’s 73 patents, coupled with their in-house hardware and software IPR, will also enhance the IPR portfolio. And some of the IP that Saankhya has been creating is going into a 6G standard.

On May 18, 2022, N. Ganapathy Subramaniam was appointed as the new Non-Executive Chairman of the Board, succeeding Balakrishnan V, who decided to step down.

For H1 FY23, consolidated net revenue was ₹345.7 crore, a YoY increase of 9 percent, resulting in a loss before tax of ₹2.1 crore as compared to a profit of ₹11.7 crore for the corresponding previous period. Loss after tax was ₹5.6 crore as compared to a profit of ₹11.2 crore for the corresponding previous period.

Order book at the end of September 2022 has increased to ₹1455 crore, which is an all-time high for the company, including ₹481 crore worth of new order wins across optical products, both in India and outside of India. The India contribution is ₹1268 crore. And there remains a backlog of ₹187 crore on the international front.

Sanjay Nayak
Managing Director & CEO,
Tejas Networks

“We continue to see strong order inflow for our optical products, resulting in all-time high order book of Rs 1455 crore. We have been re-engineering our supply chain processes, and have made substantial improvements during Q2, which will yield better results in the coming quarters. With the launch of our 4G and 5G products, we are well positioned to scale our wireless business in addition to our existing optical business. The integration of Saankhya Labs is progressing well and this has strengthened our R&D investments for 5G development.”

The vendor’s game plan in wireless is to make sure that initially it gets a very large beachhead account for 4G. And then 5G will be a seamless upgrade on the existing product architecture. From a customer experience, migration then becomes very easy. The vendor gets the maturity of technology, the products, which have been field-hardened for 15 years, running the same software core base. In fact, the use case for 5G around the world is using 4G as an anchor. The networks, which have done that, use 4G as anchor, put 5G on top, look at the markets where 5G has the highest potential, look at the bands where 5G will give maximum bang for the buck, and upgrade those networks seamlessly on a pay-as-you-grow basis since its product architecture allows it.

The vendor’s existing customer base continues to do well. That is the reason the run rate, accounting from various international geographies like Africa and Southeast Asia, continue to give good revenues, but developing Europe and US, which can give significantly larger revenues, will take a little more time. And given the amount of opportunities available, starting from India and larger deals, a good balance needs to be there, so that the home market that is very valuable is not ignored.

The game plan for Tejas Networks is in the next 15 months, i.e. till December 2023 is to focus more on building this 4G anchor base in India, upgrade it to 5G; it may be in multiple accounts, and start engaging during the middle of the year with international customers. The vendor has many inbound inquiries from customers in Europe, in particular, who are looking to find an alternative to some of the incumbent suppliers from certain countries, whom they would like to replace with new suppliers.

The vacuum in certain markets, with the vendors’ ability to scale up and engage with them and be able to supply equipment in their labs is providing good opportunity. Taking a step-by-step approach, maturing the products in India, getting the supply chain up, the products into right shape, size, and competitiveness and then tapping the overseas markets should work well.

Declared eligible under the PLI scheme as well as the Trusted Sources mandate in the last fiscal, would go a long way to help Tejas Networks in growth in domestic market share in both public and private sector procurements. Under the design-led PLI incentive scheme, launched during Q2 FY23 by the government, all the investments that are made in R&D, which are capital in nature, including salaries and manpower cost, are considered as eligible investments for the PLI policy, and being an R&D-led company gives the vendor 1 percent extra incentive.

All the wireline and optical products, encompassing the DWDM category; the broadband access, which is the GPON portfolio; and its flagship product, the ultra-converged broadband access, the same product that earlier used for other applications and now being used as a 4G and 5G base station is the product that has been trialing in various networks continues to do extremely well.

Also, the 4G radio product; 5G product, which is both O-RAN as well as normal 3GPP compliant; the products from the satellite IoT and direct-to-mobile broadcasting, which come from the Saankhya Labs portfolio; along with the software-defined radio chipsets make it possible for the vendor to offer richness of a product portfolio, from radio to wireless to optical. Moving forward, the challenge is to continue to invest and ensure that these products are technically world-class.

Last part of its technology is the secured Ethernet switches, used in smart cities, safe city, and other applications, and which again is a part of the business, a fragmented business in terms of distribution, but it is starting to aggregate and become a reasonably meaningful business mostly from the Indian customers, who are non-telco customers within the country.

Tejas Networks is looking at being a 25–30-percent margin company, making it among the better-run telecom equipment companies in the world over the next couple of years, once it gets the requisite scale. As it lines up for executing at a much larger scale, it finds that the chip suppliers are also giving strategic pricing, strategic delivery timelines, in spite of being handicapped by their supply chain shortages in terms of fab capacity, etc. It expects the top line situation will continue to improve over the next few quarters. And as scale catches up, it should start getting better control on margin and pricing too.

During FY2021-22, while Tejas Networks witnessed a strong demand for its products and solutions in the form of new order wins, revenue growth was relatively modest due to global chip shortages that impacted manufacturing operations. The shortfall in revenues, in turn adversely impacted profitability.

Technology and products. Being in the technology business, the vendor continued to maintain focus on R&D and innovation, while ensuring that investment continued to build globally competitive products. During the year, 24 percent of the revenues (on fully expensed basis) were invested on R&D, making it one of the top spenders of R&D amongst listed companies in India. In the wireline segment, in order to cater to the ever-increasing demand for carrying high-speed data, it strengthened its optical transport portfolio with 400G/600G speed interfaces, which enabled customers to build multi-terabit backbone networks. To cater to the demand for high-speed home broadband, it enhanced its FTTX (fiber-to-the-home) products, based on GPON and XGS-PON technologies, both for the OLT as well as the ONT devices. It continued to invest in building secured switches for applications, such as smart cities, safe cities, and other critical infrastructure.

On the wireless side, Tejas Networks upgraded its 4G LTE Radio Access Network (RAN) base station product to meet the technical requirements of a large pan-India mobile operator in India, and successfully completed the proof-of-concept (PoC), and are now well positioned to win large orders in the coming years.

India business. In FY22, business from Indian customers, including both government and private sector clients, contributed 64 percent of net revenues compared to 60 percent in FY21. India-government business grew 8.7 percent year-on-year (YoY) and contributed 17 percent of net revenues, of which business from BSNL/MTNL constituted 5 percent while critical infrastructure business remaining 12 percent. In FY22, Tejas Networks had multiple tender wins in BSNL and MTNL for wireline products, DWDM, and GPON. It successfully completed 4G RAN proof-of-concept (POC) testing for BSNL’s 4G tender, where it participated as a consortium partner along with TCS and C-DoT. The vendor continued to maintain strong momentum in critical infrastructure segment with multiple new orders from power, railways, oil, and gas sectors.

Tejas Networks Limited and subsidiaries

Consolidated profit and loss statement (₹ crore)

Particulars Q2 FY23 Q1 FY23 Q2 FY22 H1 FY23 H1 FY22 FY22
Revenue from operations 219.94 125.76 172.78 345.7 317.03 550.59
Other income 20.05 18.69 4.17 38.74 12.55 43.3
Total income 239.99 144.45 176.95 384.44 329.58 593.89
Total expenses 229.09 157.39 173.62 386.48 317.91 711.02
Profit/ (loss) before tax 10.9 (12.94) 3.33 (2.04) 11.67 (117.13)
Profit/ (loss) after tax 1.07 (6.64) 3.66 (5.57) 11.21 (62.71)
Total comprehensive income/(loss) (1.37) (6.47) 2.54 (7.84) 10.14 (63.90)
EPS diluted 0.07 (0.45) 0.3 (0.37) 0.93 (5.97)

In FY22, India-private business contributed 47 percent of net revenues with a YoY growth of 14.9 percent. Being an incumbent supplier to all major telcos in India, it is expecting to see an uptick in FY23 business, based on wins in new applications areas, such as FTTX, OTN/DWDM, and PTN. In FY22, Tejas Networks was selected by Airtel as a DWDM equipment supplier for their backhaul capacity upgrades as they prepared for 5G rollouts and as a GPON equipment supplier for their fiber broadband deployments. It also registered several wins with system integration partners for Ethernet switches in smart/safe cities, campus network, and bank-connectivity opportunities.

With 5G spectrum auctions completed during H1 2022, a multi-year CapEx spend cycle for building both wireline and wireless infrastructure, and deployments of next-generation radio products, 5G will also require significant increase in cell-site fiberization and augmentation of optical backbone capacities, augur well for the business.

International business. On a YoY basis, international business declined marginally and contributed 36 percent of net revenues in FY22, compared to 40 percent in FY21. Broadly speaking, international sales are generated from four regions – Africa and Middle East, South and South-East Asia, Europe, and Americas. The telecom network requirements of service providers in the developing economies of Asia and Africa closely mirror those of Indian telcos, thus enabling the vendor to leverage success in the Indian market to expand in these regions.

In FY22, it continued to gain traction in DWDM, OTN, and FTTX segments in Africa and Middle East region, which is witnessing strong investment activity in broadband networks and large-scale build-outs by web-scale companies. Besides winning large business from a single pan-Africa Carrier of Carriers, the company also signed-up multiple customers in the West Africa region including a new Tier-I operator in Nigeria. The FY22 revenues from the South and South-East Asia region declined on account of weak order flow as multiple RFPs got pushed out to the next fiscal year. In FY23, it found itself well positioned for expansion opportunities in existing accounts for its wireless and optical products. Sales activity in the Americas is mainly focused on USA and Mexico. There was an uptick in the USA business as it signed up a large Tier-I OEM for its MSPP products while Mexico saw reduced order flow. In Europe, it registered its first multi-million dollar win for its DWDM and FTTX products. The vendor has multiple ongoing customer engagements in Europe, primarily targeting high-speed broadband rollouts and a growing demand for trusted telecom equipment in certain countries.

Tejas Networks Limited and subsidiaries

Consolidated balance sheet (₹ crore)

As of
Particulars September 30 ,2022 March 31, 2022
Assets  3136.23  2110.12
         Non-current assets 822.54 360.39
         Current assets  2313.69  1749.73
Total equity and liabilities 3136.23 2110.12
Equity 2648.18 1930.25
         Total non current liablities 201.25 12.44
         Total current liabilities 286.8 167.43
Cash and cash equivalents  1402.15 1102.18

In the backdrop of recent geo-political developments post-Covid, Tejas Networks is increasingly being seen as a competitive and trusted alternative for providing world-class telecom equipment to customers. Going forward in FY23, the company plans to further build on this momentum by leveraging its reference customer base, Tata brand, and a stronger balance sheet to win larger deals.

Sterlite Technologies Limited
STL is all set to play a pivotal role in this decade of network creation. The company recently shared its ambition of becoming one of the top 3 optical players globally.

In Q2 FY23, STL reported profitable growth with revenues of ₹1768 crore, up by 12-percent QoQ and 17-percent YoY. Nearly 70 percent of revenue came from Americas and Europe.

STL is exhibiting global growth and consistently gaining market share in its key markets., STL now holds 11 percent of the global OFC market share (ex-China). Also, STL’s traction on the Optical Interconnect business has increased. The Optical Interconnect attach rate (the attach rate is the number of dollars of the Optical Interconnect sold, for every dollar of cable sold) has increased from 3 percent in FY21 to 11 percent in FY22, and the target is to increase it further

5G, FTTH and data center rollouts are picking up pace globally and optical demand is on a strong upward trajectory, with the optical fiber cable market size expected to reach USD 10 billion by 2024. India’s much awaited 5G rollout has started and will strongly hinge on fiber with telcos planning to lay ~2,00,000 cable kilometers and spend between USD 1.5 billion to USD 2.5 billion on fiber roll-out in next 2 to 3 years. STL has already made strategic investments for this demand cycle and is playing a pivotal role in this ongoing decade of network creation, both in India and internationally.

At the recently held India Mobile Congress 2022 in New Delhi, India, STL announced a breakthrough innovation in the optical fiber developed at the STL Center of Excellence, India’s first multicore fiber and cable. The multicore fiber has 4 times the transmission capacity than a normal fiber, with essentially the same diameter and other parameters. This optical fiber reduces cable surface area by 75 percent in plastic and the plastic in the ground by around 10 percent. STL launched the Gram Galaxy solution too, that will enable faster, and highly scalable rural network buildouts. The vendor also unveiled 5G Cosmos, an optical solution for towers and small cells that lends speed to the 5G rollout.

Ankit Agarwal
Managing Director,
The world has now recognised broadband as a basic necessity. 5G, FTTH, and rural connectivity efforts are all coinciding to connect the remaining 40 percent of the world. Fiberisation is going to be front and centre in this decade of network creation and STL is fully prepared to meet this demand with global capacities, great talent and technology-led solutions. We are constantly innovating to build these networks fast and in the most sustainable way.

We hold our purpose of transforming billions of lives very close to our hearts and are very excited about this opportunity to connect the unconnected. This quarter saw one of the highest order intakes of ₹3,200 crore. I really want to congratulate the entire team for delivering such a strong performance in a complex operating environment. There is good traction for our solutions, and we believe that our focused efforts will create stakeholder value and bring us closer to being amongst the top 3 optical players globally.

In the Global Services business, STL is building a profitable order book by picking projects in its focus segments. And the company has secured a good order book in India and UK and increased its execution pace. In Q2 FY23, STL delivered revenue of ₹463 crore, which is 11-percent higher quarter-on-quarter.

In terms of production facilities overseas, the one in the US that has come up now, is poised to be a world class optical fiber cable facility. Similarly, in China, the company is restarting operations and plans to scale these up, reaching full capacity utilization by Q1 FY24.

In line with the strategy to focus on selective segments, STL has divested the IDS business in Q2 FY23 and sold its stake to Hexatronic Group.

In terms of capital allocation, the priority is investments in the optical business. STL is investing in OFC capacity expansion, Optical Interconnect expansion and new product development. It has improved margins and working capital cycle in the optical business.

STL’s financials continue to improve. Its open order book at end of Q2 FY23 has gone up to ₹11,697 crore, having secured a new order book close to ₹3200 crore in the quarter, the highest order intake in the last 3.5 years. Its revenue mix is shifting to customer segments of priority, with the share in telco and cloud segment increasing.

In terms of notable wins in Q2 FY23, apart from the multimillion dollar contract of cables in Americas and for Optical Interconnect in Europe, STL has also secured multiple other new orders. In the European market, new orders for the Optical Interconnect solutions from an alternate player have been secured. The company is collaborating with Vocus Group in Australia to provide optical fiber cables.

STL has started building new capability to pivot from network software to digital business. The company expects the operating profit to improve by ₹40-50 crore in this segment by Q4 FY23. In Q2 FY23, the revenue for this unit stood at ₹40 crore in Q2 FY23, the combined operating loss for this segment was ₹102 crore for the quarter attributable to higher initial manpower cost in the digital business.

In terms of cash flow, the net debt has gone up by about ₹457 crore in H1 FY23, mostly due to increase in contract assets of ongoing projects in the services business. The cash generated from operations and net investment inflow helped in payment of CapEx and dividends. Optical business has funded its growth itself by improving margins and working capital days.

Moving forward, the vendor is working to release cash from working capital, particularly from services business. With the completion of large existing public projects like T-Fiber and collection of completed projects coming through, this can be achieved. The target is to reduce net debt to EBITDA by Q4 FY23. Also, as production in the US and China is ramped up, the management does not see any significant debt increase from these levels. In terms of credit rating, STL has a stable credit rating at AA.

HFCL Limited
The global macro environment continues to be challenging and dynamic. However, with the advent of 5G, the opportunity landscape for manufacturers in the telecom and technology industry looks promising, and has grown manifold. It has also given rise to a spike in demand for optical fiber cables and telecom and networking products. The deployment of a robust 5G infrastructure in the next couple of quarters will enable enterprises to embark on the digital transformation journey across sectors.

The development of revolutionary yet indigenous technology and products has positioned HFCL in the forefront of global technology leadership. The company has strong footprint in 30-plus countries, serving 80-plus clients globally in optical fiber cables and telecom products.

For HFCL, Q2 FY23 has been promising. The company was able to continue its sustainable growth path, which was fuelled by some key product launches.

As a technology-driven enterprise, there is a significant thrust on innovating futuristic 5G products. This will create huge opportunities for its new products based on 5G technologies like 5G-8T8R macro radio unit, 5G indoor and outdoor small cell development and 5G mm wave fixed wireless access customer premise equipment products in the domestic and global markets.

The other strategic priority during this quarter was on expansion in key global markets, including the United States and Europe to further support its strategic direction to become a product-led global player in optical fiber cables and telecom products and solutions space. By winning key orders from Reliance Retail, BSNL, and RailTel, HFCL closed Q2 FY23 with an order book of more than ₹5200 crore.

Over the next 3 years, HFCL aims to build upon global customer relations and export footprints expeditiously, and emerge as a large global player in this space. Its export revenue has grown by 88 percent in Q2 FY23 on a year-on-year basis. In H1 FY23, export revenue stood at ₹376 crore, compared to ₹171 crore in H1 FY22, an increase of 120 percent. The manufacturer plans to double the export revenue during the current financial year. This trend is expected to continue in coming years as well.

On August 8, 2022 HFCL also entered into a crucial partnership with Qualcomm for design and development of 5G millimeter wave fixed wireless access customer premise products. In continuation with its 5G product strategy, HFCL is expanding its 5G product portfolio by launching product development of 5G mmWave FWA CPE products for India and global markets.

At the India Mobile Congress 2022, held recently in the Capital, HFCL took the opportunity to launch some significant new offerings, including world’s first open source Wi-Fi 7 access points, designed to deliver extremely high throughput, generating a speed of more than 10 giga bits per second. With a strong background of R&D, its line of Wi-Fi 7 products is bound to enable telecom operators to deliver better user experience than earlier, bringing them a step closer to Metaverse.

Mahendra Nahata
Managing Director,

“In the backdrop of easing supply chain disruptions and improvement in input costs, we have been able to demonstrate healthy growth in our revenue and margins over the last quarter (for the quarter ended on June 30, 2022). With the leap in technology, higher backward integration, capacity expansion in OFC business, production of next-gen equipment, and expanding global footprints, we are well on our mission to transform as a technology-driven enterprise that innovates and manufactures for both domestic and global markets with an aim to become a product-led global player in optic fiber cables and telecom equipment and solutions.

We have further strengthened our R&D initiatives and 5G product portfolio and launched the world’s first open standard Wi-Fi 7 access points, 8T8R macro radio units, and 5G lab-as-a-service. Backed by our portfolio of indigenous futuristic products and solutions, our share of exports to revenues has improved to 16.38 percent in Q2 FY23 as compared to 9.08 percent in Q2 FY22. We continue to see strong response in key global markets like Europe, Africa, and Middle East, thereby making us optimistic about doubling our exports to ₹750 crore by the end of FY23. We have also committed an investment of ₹425 crore on R&D and creation of facilities to manufacture telecom equipment under the government’s PLI/DLI scheme.”

At IMC 2022, HFCL also launched the first product from its 5G product family, the 5G 8T8R macro radio unit, which is modular in design, and can be easily customized to support any Sub-6 GHz frequency band to address the global markets. Its next-generation radio unit combines the power of vRAN, based on open standards to accelerate 5G deployment.

HFCL is one of the few companies in the country to have launched 5G lab-as-a-service.

HFCL will provide an automated test environment for the private sector, academia, and government to work together on product innovations from concept to reality, thereby accelerating the rollout of 5G solutions and services, both in India and globally.

Having been successful in Q2 FY23, with healthy growth in revenue and margins over the last quarter, the management believes that revenue and margins will continue to grow with all the initiatives taken in the last few quarters. HFCL has committed a sum of Rs. 425 crore over a period of four years for the design-linked incentive scheme for telecom and networking products.

In FY22, HFCL reported consolidated revenue of ₹4727 crore, an increase of ~7 percent from ₹4423 crore in FY21. EBIDTA for the year was ₹693 crore, up 18 percent from ₹584 crore in the previous year. Profit before tax increased by 31 percent to ₹442 crore from ₹337 crore in FY21, while profit after tax increased by 33 percent to ₹326 crore from ₹246 crore in FY21.

The company has increased its product revenue to 43 percent in FY22, up from 27 percent in the previous fiscal year, which helped it register better margins. In addition, export revenue increased to ₹363 crore in FY22 from ₹201 crore in the previous year. With sustained growth and fiscal consolidation, CARE Ratings upgraded its credit rating to A with stable outlook.

To drive sustainable and profitable growth, HFCL has prioritized four strategic focus areas – continued capacity expansion and setting up new facilities, product innovation, expanded global footprint, and strategic partnerships. These measures are transforming HFCL into a technology-driven global enterprise.

Financial highlights

Consolidated, unaudited (₹ crore)

Profit and loss statement

Particulars H1 FY23 H1 FY22
Total income 2252.99 2338.26
Total expenses 2067.28 2098.88
EBIDTA 304.35 364.74
EBIDTA margins (%) 13.51 15.60
PAT 137.40 176.63
EPS Diluted ₹ 0.97 1.32

Capacity expansion. HFCL is in the process of increasing its optical fiber manufacturing capacity equivalent to 22 million fiber kilometers and optical fiber cable to 34.75 million fiber kilometers per annum. These expansions are likely to be completed by FY24. This will help bridge the gap between the growing fiber demand and cable capacity. It will also strengthen the supply chain and increase the company’s margins.

Balance sheet

Particulars H1 FY23 H1 FY22
Current assets 3726.77 3743.28
Non-current assets 1567.09 1124.08
Total assets 5293.86 4867.36
Total equity 2932.36 2087.44
Total liabilities 2361.50 2779.92
Total equity and liabilities 5293.86 4867.36

Product innovation. The company has made significant investments for new product developments, including Wi-Fi-7 enabled access points, point-to-point and point-to-multi-point backhaul radios and routers. These products will be compatible with 5G networks. It is also working on the development of software-defined radios, 5G radio, and transport products, and the progress made in these areas will help HFCL to enter new global markets. In addition to the prior developments, a fresh initiative has also been taken to develop new types of optical fiber cables for export markets.


Consolidated, unaudited (₹ crore)

By segment

Segment H1 FY23 H1 FY22
Telecom products 1291.14 958.02
Turnkey contracts and services 933.34 1370.9
Revenue from operations 2224.48 2328.92

Global market expansion. HFCL has formed two new wholly-owned subsidiaries in Texas, USA and Amsterdam, Netherlands to meet the global demand for the company’s products and to expand its business operations and activities overseas. Both wholly-owned subsidiaries propose to trade in optical fiber, optical fiber cables, telecom and networking products, as well as conduct related research and development.

Financial highlights

Consolidated, audited (₹ crore)

Profit and loss statement

Particulars FY 2021-22 FY 2020-21
Revenue from operations 4727.11 4422.96
Other income 42.91 34.76
Total revenue 4770.02 4457.72
Profit/(Loss) before tax 442.12 336.86
Net profit after tax 325.87 246.24
EPS Diluted ₹ 2.38 1.87

Strategic partnerships. HFCL formed several strategic alliances and associations in FY22, enabling faster development of products. The company joined the O-RAN alliance, a global community of mobile network operators, vendors, and research and academic institutions in the radio access network industry, working together to build much more intelligent, open, virtualized, and fully interoperable mobile networks. HFCL aims to integrate and validate its 5G products and solutions with other members and contributors to the O-RAN alliance. In addition, it has partnered with WIPRO to co-develop various 5G transport products that will enable communication service providers (CSPs) to modernize their backhaul networks and make them ready for 5G services. The vendor has also tied up with other renowned technology players and start-ups, including Capgemini, NXP, IP Infusion, and Metanoia to develop various 5G communication products. The company has engaged CommAgility as a critical technology partner in the development of a comprehensive portfolio of 5G radio access and transport network products.

Balance sheet

Segment revenue FY 2021-22 FY 2020-21
Telecom products 2055.16 1205.46
Turnkey contracts and services 2671.74 3217.50
Others 0.21 0
Revenue from operations 4727.11 4422.96

Outlook. With a major focus on the 5G revolution, HFCL is witnessing a transformation toward emerging as a high-tech global enterprise and integrated next-gen network solution provider. Witnessing a strong demand for its 5G products, optical fiber cables, and integrated network solutions, both in India and globally, the management is committed to continue to leverage its capabilities and continue with its strategy of tapping new customers, new geographies, and new products.

Consolidated audited balance sheet

(₹ crore)

Particulars FY 2021-22 FY 2020-21
Current assets 3819.29 4149.83
Non-current assets 1352.17 1065.98
Total assets 5171.46 5215.81
Total equity 2818.37 1923.47
Total liabilities 2353.09 3292.33
Total equity and liabilities 5171.46 5215.8

MP Birla Group
Flagship companies of the MP Birla group, Vindhya Telelinks Limited and Birla Cables Limited cater to the telecom industry.

Vindhya Telelinks Limited
In 2021-22, the revenue from operations decreased by 11.86 percent to ₹1323.95 crore, as compared to ₹1502.06 crore in the previous year. The company achieved profit before interest, depreciation/amortization and tax of ₹186.10 crore during the year 2021-22, as compared to ₹224.99 crore in the previous year. Profit before depreciation and tax during the year 2021-22 stood at ₹134.20 crore, as against ₹155.83 crore in the previous year.

Vindhya Telelinks Limited
Unaudited consolidated profit and loss statement (₹ crore)

Particulars H1 FY23 H1 FY22
Revenue from operations 886.91 663.94
Other income 11.45 11.35
Total income 898.36 675.29
Total expenses 837.47 615.52
Profit for the period 55.73 102.84
Total comprehensive income (59.91) 125.00
EPS (₹) 47.02 86.78

The company’s revenue from operations on account of sale of products, comprising of telecommunication cables, other wires and cables, FRP rod/glass roving, and traded goods increased from ₹481.93 crore in the previous year to ₹560.25 crore. This reasonable increase in the revenue was achieved despite the pandemic-related disruptions in normal operations during the beginning of the financial year under review, and also due to customer-retention measures adopted by the company and reaching out for new customer acquisition, which paved the way for this improved performance even during the challenging period for the industry as a whole.

Vindhya Telelinks Limited

Unaudited consolidated balance sheet (₹ crore)

Particulars H1 FY23 H1 FY22
Current assets 2085.63 1866.20
Non-current assets 3227.97 3165.11
Total assets 5313.60 5031.31
Total equity 3220.79 3096.91
Total liabilities 2092.81 1934.40
Total equity and liabilities 5313.60 5031.31

The company’s revenue from Engineering, Procurment, and Construction (EPC) contracting/turnkey services in the EPC business segment has decreased to ₹859.41 crore, as compared to ₹1103.48 crore in the previous year, mainly due to low order booking in the first half of the financial year.

Vindhya Telelinks Limited

Consolidated profit and loss statement (₹ crore)

Particulars FY22 FY21
Revenue from operations 1323.95 1502.06
Other income 31.01 55.31
Total income 1354.96 1557.37
Total expenses 1242.95 1394.30
Profit for the period 193.28 270.08
Total comprehensive income 367.57 481.24
EPS (₹) 163.09 227.90

Its IP-1 performance during the year was muted due to temporary slowdown in capital expenditure by TSPs. Further, the company’s IP-1 business model has delivered tremendous value to all the telecom operators, who are its esteemed customers, deriving greater benefits out of the network built by the company, thereby offering latest digital services to the subscribers with ultimate customer delight.

Vindhya Telelinks Limited

Consolidated balance sheet (₹ crore)

Particulars FY22 FY21
Current assets 1757.28 2082.055
Non-current assets 3277.13 2939.305
Total assets 5034.40 5021.360
Total equity 3236.82 2880.920
Total liabilities 1797.58 2140.444
Total equity and liabilities 5034.40 5021.364

The company continued its focus on judicious capital allocation, and incurred a capital expenditure aggregating to Rs 8.22 crore, consisting of addition to buildings, plant and equipment, and other fixed assets for further capacity expansion/augmentation.

Birla Cable Limited
The revenue from operations increased by 62.99 percent to ₹535.45 crore during the financial year 2021-22, as compared to ₹328.52 crore during the previous year, primarily due to reasonable increase in order flow, especially from the long-term customers. The profit after tax for the year under review stood at ₹21.74 crore, as compared to ₹8.20 crore in the year 2020-21.

Vindhya Telelinks Limited
Revenue by segment (₹ crore)

Unaudited Unaudited Audited
Particulars H1 FY23 H1 FY22 FY22
Cables 378.31 312.73 560.25
EPC 606.94 431.30 859.41
Total 985.25 744.04 1419.66

There is a good increase in OFC business, which reached the level of ₹258.04 crore during the financial year 2021-22 as compared to ₹165.10 crore in the previous year. The company’s sales turnover from copper cables and structured cables witnessed phenomenal increase during the financial year 2021-22. The sales increased to ₹260.93 crore, as compared to ₹152.80 crore in the previous year.

Birla Cable Limited

 Unaudited consolidated profit and loss statement (₹ crore)

Particulars H1 FY23
Revenue from operations  347.19
Other Income  1.55
Total income  348.74
Total expenses  332.97
Profit for the year  12.01
Total comprehensive income  17.47
EPS (₹)  4.00

The company continued its focus on judicious capital allocation, and incurred capital expenditure aggregating to ₹6.62 crore, consisting of addition to buildings, plant and equipment, and other fixed assets for further capacity expansion/augmentation.

Birla Cable Limited

 Unaudited consolidated balance sheet (₹ crore)

Particulars H1 FY23
Current assets 332.59
Non-current assets 107.73
Total assets 440.32
Total equity 199.51
Total liabilities 240.81
Total equity and liabilities 440.32

At present, India continues to be highly under-fiberized with the fiber deployment to population ratio standing at 0.09 km, which is one-tenth of the global average of 0.9 km. Further, the levels of tower fiberization will have to increase from one-third at present to two-third. In fact, the current data usage is growing at a faster pace, creating a critical need for robust fiberized backhaul.

Birla Cable Limited

Consolidated profit and loss statement (₹ crore)

Particulars FY22 FY21
Revenue from operations  535.45  328.52
Other income  2.70  1.83
Total income  538.14  330.36
Total expenses  508.90  319.40
Profit for the year  21.74  8.20
Total comprehensive income  21.23  12.52
EPS (₹)  7.25  2.73

Large scale fiberization is also key to the success of government-driven programs, such as Digital India, the National Broadband Mission, and the Smart Cities Mission, and for meeting the set targets under the National Digital Communication Policy 2018.

Birla Cable Limited

Consolidated balance sheet (₹ crore)

Particulars FY22 FY21
Current assets  253.69  219.86
Non-current assets  92.27  96.79
Total assets  345.96  316.66
Total equity  186.54  168.31
Total liabilities  159.43  148.37
Total equity and liabilities  345.96  316.68

Ultimately, the importance of digital connectivity was very well felt during the Covid-19 pandemic, and in fact the need has surged in a big way. Owing to this, there is a need already arisen to strengthen the optical fiber cable network across the country, and a greater urge to connect the rural masses deep inside the country.

These emerging opportunities for optical fiber cables infrastructure including the impending introduction of 5G technology in the mobile communication networks augur well for both Cable and EPC business segments. Government-driven BharatNet project envisages the deployment of optical fiber cables in large quantity across the country, which may lead to optimum capacity utilization in cables manufacturing set-up, besides bringing enormous opportunity for the EPC division with large-scale cable deployment opportunities.

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