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Global Players: Regaining lost ground

September 30, 2011
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Following a dismal 2009 when overall test and measurement (T&M) revenue declined by more than 18 per cent, six of the top 10 publicly held multinational test companies recorded revenue gains of more than 25 per cent in 2010. These include Danaher (holding company of Tektronix, Fluke and Keithley Instruments), Agilent Technologies, Teradyne, Advantest, National Instruments, JDSU, Anritsu, Verigy, Spirent Communications and Yokogawa.

As most of the T&M companies regained lost ground after a tough 2009, those with strong balance sheets began to take advantage of opportunities, mostly via acquisitions. There were several noteworthy transactions in this space in 2010. For instance, in February 2010, JDSU signed an agreement to acquire Agilent’s communications test business, including the unit’s innovative long term evolution (LTE), network verification and deployment products for $165 million in cash.

Key players

The T&M sector has been critical to the growth of the telecom industry, enabling precision measurement and quality control. As the telecom sector focuses more on quality products and services, the role of manufacturers in the T&M space has become significant in ensuring that quality and reliable products reach the sector.

tele.net takes a look at some of the major players in the telecom T&M market...

Agilent Technologies

An industry leader in the T&M market, Agilent has three main areas of operation – electronic measurement, life sciences and chemical analysis. Of these, electronic measurement remains Agilent’s largest business segment, with a revenue contribution of over 50 per cent. Driven by the growing demand for smartphone technology, its latest products and an expanding geographic reach, the company has registered strong revenue growth in recent quarters.

For the quarter ended July 2011, the company reported a profit of $330 million, up from the previous year’s $205 million. Excluding acquisition-related costs, write-downs and other impacts, its earning per share rose from 54 cents to 77 cents as revenue increased by 22 per cent to $1.69 billion. Revenue from the electronic measurement business, its largest by sales, increased by 24 per cent on demand from the communications, industrial, computer and semiconductor markets.

Another key reason for the sharp improvement has been the company’s $1.5 billion purchase of peer company Varian, Inc. in 2010.

Going forward, the company expects the measurement business to continue growing as wireless communication networks adopt 4G technologies. The company is already witnessing an upswing in orders for 4G base stations.

National Instruments

National Instruments is a leading global supplier of PXI modular instrumentation with over 60 per cent market share in the T&M segment. Its recent acquisition of Phase Matrix has provided competences and expertise in modular instrumentation, fast switching synthesisers and a radio frequency (RF) system design product portfolio that is highly complementary to National Instruments’ hardware and software offering. This is significant as the company continues to register growth in the RF and microwave T&M market. The acquisition has enabled National Instruments to expand the frequency range of its products to 26.5 GHz based on the PXI platform for RF that will extend the current product offering to higher frequency applications.

The company has made significant investments in R&D to fully leverage its core platforms – PXI and CompactRIO. Two of National Instruments’ key developments in PXI in 2010 were the release of the industry’s first PXI vector network analyser and new high density PXI switching platform. These investments paid off with the company recording a 29 per cent rise in revenue in 2010.

National Instruments is also positioning its PXI platform for semiconductor testing. For instance, its TriQuint Semiconductor reduced the characterisation time of its latest power amplifiers from over two weeks to about a day using a PXI solution.

Anritsu

Japan-based Anritsu registered a strong business performance in 2010, with revenue growing nearly 11 per cent to 53,463 million yen (19 per cent in dollar terms). Its operating income stood at ¥5,051 million, a 124.3 per cent increase over the previous fiscal year, as the mobile market gained traction.

The company’s top performing test products are related to the mobile communications segment and include conformance test systems, signalling testers and field measuring instruments.

Anritsu’s T&M segment provides solutions in all areas from core networks to metro networks and mobile backhaul. It provides T&M solutions in Japan, the Americas, Europe, the Middle East, Africa and Asia.

The company’s new MT8220C radio communications analyser can evaluate and measure 2G, 3G and 3.5G mobile terminals as well as LTE devices. A key product launched is the MW8219A PIM Master, which is designed to accurately locate the source of passive intermodulation such as near base stations.

JDSU

US-based JDSU’s revenue grew by 9 per cent in 2010. The company’s recent acquisition of one of Agilent’s test units has strengthened its communications test market positioning, including the emerging market for LTE/4G solutions required by  wireless service providers and network equipment manufacturers upgrading to this next-generation technology. More than 100 wireless service providers worldwide have announced plans to deploy LTE, including companies such as AT&T, Bell Canada, China Telecom, China Mobile, T-Mobile Germany, NTT DOCOMO and Verizon Wireless. Test products are used throughout the LTE development, deployment and operational life cycle.

Over the past year, JDSU’s test and measurement solutions have been used by operators like Chunghwa Telecom, CSL, SingTel and TDC to efficiently and cost effectively deploy global LTE networks.

Recently, Frost & Sullivan conferred  the Global Market Share Leadership Award in fibre optic testing on JDSU. JDSU’s key product introductions in 2010 include access LTE, a quality assurance test solution for mobile services, and the Multi-Port Test Module for the ONT-600, which supports testing and verification for high speed network elements of 40G and 100G Ethernet.

Spirent Communications

Spirent witnessed a 13 per cent increase in revenue in 2010. This growth has been driven by the emerging market for  Ethernet, LTE, advanced GPS and data centres focusing on cloud computing. The company’s new Avalanche Virtual is the industry’s first all-in-one cloud testing solution, designed to test and measure the performance, availability, security and scalability of virtualised network infrastructures.

In 2010, Spirent also introduced new HyperMetrics modules for testing Ethernet-related network equipment for its flagship test centre.

EXFO

Canada-based EXFO has also reported strong results. In the nine months up to May 2011, its sales increased 42.4 per cent  to $205.3 million. In the quarter ended August 2011, the company expects to record an annual revenue growth of more than 30 per cent for its telecom business.

EXFO offers solutions for the development, installation, management and maintenance of converged IP fixed and mobile networks from the core to the edge. Key technologies supported include 3G, 4G/LTE, IMS, Ethernet, OTN, FTTx and various optical technologies (accounting for an estimated 35 per cent of the portable fibre optic test market). EXFO operates in 25 countries, supporting more than 2,000 telecom customers worldwide.

Rohde & Schwarz

Rohde & Schwarz is a leading electronics specialist for radio and communication technology. Established more than 75 years ago, Rohde & Schwarz has a global presence and a service network in over 70 countries. It achieved a net revenue of Euro 1.3 billion in fiscal year 2009-10 (July 2009 to June 2010).

In 2010-11, the German T&M instruments company received orders from various sectors, including defence and education, for spectrum analysers. The company also received some strategic orders in the automation and driver segment, which helped it get repeat orders worth several million euro for the coming years. The brand also received big orders from telecom MNCs for telecom protocol and RF test systems.

In May 2011, the company acquired German-based internet traffic management and monitoring specialist ipoque GmbH.

Growth drivers

In the mobile phone market, the full-scale implementation of LTE services will drive growth in demand for conformance and interoperability testing between handsets and base stations or existing network services. Demand for measuring instruments used in manufacturing handsets typified by increasingly faster and more multifunctional smartphones is also expected to rise.

In the network infrastructure market, demand will continue for measuring instruments for installation and maintenance to upgrade and expand mobile backhaul.

As operators across the world continue to invest in next-generation technologies, the T&M market will witness further growth in 2011 and in the future.

 
 
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