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Structured cabling

South East Asia

By Martin Chiesa

Report 58921/2 March 2016

A published market report

2 Structured cabling 2015 - South East Asia

Report 58921/2

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A BSRIA Published Market Report


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Contract

Date

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Issued by: BSRIA Limited Old Bracknell Lane West Bracknell Berkshire RG12 7AH United Kingdom

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mechanical including photocopying, recording or otherwise in full without the written approval of any executive director of BSRIA. This report is only

intended to be used within the context described in the text.

Report 58921/2

March 2016

A published market report

Martin Chiesa

Lone Hansen

1

Structured cabling - South East Asia

30


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Contents

Section Title Slide

1 Market summary 5

2 Market size and characteristics 7

3 Market drivers 10

4 Market forecast and trends 18

5 Market suppliers and market shares 23

6 Supply channel and key distributors and contractors 27


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Market summary

Section 1


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The data centre market in the SEA region is estimated at less than US$ 26 million (14% of the total cabling market), but with clear differences between countries.

While in Singapore DCs are estimated at 21% of the total market by value, in the Philippines and in Vietnam the value of DCs are in single figures (8%).

Singapore and Indonesia are the main geographical markets for DCs in the region

Pre-terminated fibre and copper sales continue to be low.

Around 75% of cabling products are sold via distributors in all countries in SEA. 20% are sold direct to SIs and installers and the remaining 5% are sold direct to key accounts.

The structured cabling market report for South East Asia (SEA) comprises 6 of the 10 countries that are included in the region: Singapore, Indonesia, Malaysia, Thailand, the Philippines and Vietnam.

The SEA market has expanded considerably over the last few years, and it is estimated to have reached US$ 184 million in 2015.

Growth in 2015 across the region has not been uniform, with some markets expanding (such as Singapore, Malaysia and Vietnam), while others have shown little or no growth.

BSRIA expects the market to continue to grow in the coming years, at rates between 3% and 6%, depending on the country and the year.

Singapore is the largest market in SEA, representing 26% of the total sales in the region, followed by Indonesia, Malaysia, Thailand and then the Philippines, with

Vietnam being the smallest cabling market of the six.

The copper to fibre ratio continues to be below the global average, and fibre currently accounts for 21% of the SEA market.

Around 85% of the copper cabling is unshielded and copper cabling accounts for 79% in SEA.

BSRIA expects the SEA structured cabling market to continue to grow over the coming years, reaching almost US$ 208 million by 2018 – representing growth of 4% year on year.

Less developed markets are expected to grow at slightly higher rates, albeit from a lower base.

Indonesia is expected to see its DC market growing faster than average, as a result of several future projects and Indonesia becoming a local hub for DCs.

Summary


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Market size and

characteristics

Section 2


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The structured cabling market report for South East Asia (SEA) comprises 6 of the 10 countries that are included in the region: Singapore, Indonesia, Malaysia, Thailand , the Philippines and Vietnam. Our regional report provides a top line view of the markets, as opposed to the more thorough and in-depth analysis of our country reports.

The SEA market has expanded considerably over the last years, and it is estimated to have reached US$ 184 million in 2015. Part of the growth might also be attributable to new market entrants and part may be owing to some underestimation of some players’ sales in the past.

Growth in 2015 across the region has not been uniform, with some markets expanding (such as Singapore, Malaysia and Vietnam), while others have shown little or no growth.

BSRIA expects the market to continue to grow in the coming years, at rates between 3% and 6%, depending on the country and the year.

As opposed to the other SEA markets, Singapore is a highly developed economy and market, with a high level of investment in structured cabling per capita, although BSRIA expects a gradual narrowing of the gap over the coming decade. The same applies to the DC market.

Singapore is the largest market in SEA, representing 26% of the total sales in the region, followed by Indonesia, Malaysia, Thailand and then the Philippines, with Vietnam being the smallest cabling market of the six.

Market size

Total structured cabling market by value, US$ million, 2012-2018

Source: BSRIA

Source: BSRIA

Total structured cabling market by country, 2015


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Singapore is the most advanced cabling market in the region, and fully comparable with other developed markets, both in terms of its per capita expenditure on cabling and in terms of the share of higher category cabling, with a data centre market accounting for 21% of the total cabling sales, a relatively high update of Cat 6A cabling (25% by volume in 2015) and a higher fibre to copper ratio than for the other countries in the region.

Malaysia and Thailand (to a lesser extent) are tier-two cabling markets in the region, in terms of per capita cabling expenditure and the uptake of higher category cabling.

Indonesia, the Philippines and Vietnam are the least developed cabling markets in the region as they have a much lower per capita expenditure in structured cabling and a lower uptake of higher category cabling.

Some price erosion was found, resulting from lower copper prices, which affected cables more than

connectivity.

The fibre to copper ratio continues to be below the global average, but fibre has certainly gained weight in the region, and currently accounts for 21% of the SEA market. Most of the fibre is installed in LAN in the backbone and some in campus applications, as the DC market is still relatively small (with the exception of Singapore).

As seen in other Asian markets, cable has a higher share of the copper mix than in other parts of the world, with the average node being around 70m (60m in the case of Singapore). This fact gives copper cable a higher share of the copper cabling market, despite having seen a bigger price reduction over the last two years.

Around 85% of the copper cabling is unshielded and copper cabling accounts for 79% in SEA.

Market characteristics

Copper vs fibre market split, 2015

Cable vs components split, 2015

Source: BSRIA


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Market drivers

Section 3


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Economy

The South East Asia (SEA) region has

emerged from a struggling economic

region, hit hard by the Asian Financial

Crisis (AFC) in 1997, to an emerging

economic powerhouse in Asia Pacific,

attracting huge amounts of foreign

investment.

The region, that seen tremendous change

within the last 20 years, comprises 10

nations: Brunei, Cambodia, Indonesia,

Laos, Malaysia, Myanmar, the Philippines,

Singapore, Thailand and Vietnam.

All of these countries form a very diverse

amalgam in terms of size, culture, religion,

language, demographics and their

economy, ranging from the small city-state

of Singapore, with a population of 5.5

million, to a country such as Indonesia,

which is home to 46 times that amount of

people. The population pyramid is also

very different across the region, with Laos

having a 22 year old population or

Philippines with 23 years on average, while

Singapore and Thailand almost double that

figure at more than 38 and 37 years,

respectively.

Urbanisation rates across SEA also vary

significantly, with Singapore at 100%,

Malaysia at74%, while in Indonesia and

Thailand around 50% of the population live

in cities. The overall urbanisation rate in

SEA is still very low (47%), although 8

million people per year are expected to

move to cities over the 2015 – 2020 period.

Urbanisation is strongly related to

structural economic change and increasing

wealth levels. The current middle income

population in SEA is estimated to total 125

million, roughly equivalent to the population

of Japan. But SEA’s middle class is

expected to grow by another 70 million by

2020 (with Indonesia accounting for about

one-half of it).

Higher urbanisation rates translate into

higher share of infrastructure, services and

a larger economy.

Agriculture, construction and mining

activities are the main economic activities

in the area, with the exception of

Singapore, which is driven by financial

services and international trade.

The South East Asia (SEA) region has emerged from being an economically struggling region, hit hard by the Asian Financial Crisis (AFC) in 1997, to become an emerging economic powerhouse in Asia Pacific, attracting huge amounts of foreign investment.

The region, which has seen tremendous change within the last 20 years, comprises 10 nations: Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.

Together these countries form a very diverse amalgam in terms of size, culture, religion, language, demographics and the state of their economy, ranging from the small city-state of Singapore, with a population of 5.5 million, to a country such as Indonesia, which is home to 46 times that number of people. The population pyramid is also very different across the region, with Laos having, on average, a 22 year old population or the Philippines with 23 years on average, while Singapore and Thailand almost double that figure at more than 38 and 37 years, respectively.

Urbanisation rates across SEA also vary significantly, with Singapore at 100%, Malaysia at 74%, while in Indonesia and Thailand around 50% of the population live in cities. The overall urbanisation rate in SEA is still very low (47%), although 8 million people per year are expected to move to cities over the 2015 – 2020 period.

Urbanisation is strongly related to structural economic change and increasing wealth levels. The current middle income population in SEA is estimated to total 125 million, roughly equivalent to the population of Japan. But SEA’s middle class is expected to grow by another 70 million by 2020 (with Indonesia accounting for about one-half of this).

Higher urbanisation rates translate into a higher share of infrastructure, services and a larger economy.

Agriculture, construction and mining activities are the main economic activities in the region, with the exception of Singapore, which is driven by financial services and international trade.

The establishment of the ASEAN Economic Community (AEC) in 2015 was a major milestone in the regional economic integration agenda in ASEAN, offering opportunities in the form of a huge integrated market of US$2.6 trillion and over 622 million people. In 2014, AEC was collectively the third largest economy in Asia and the seventh largest in the world.

The establishment of a single market supporting free flow of goods and services, including labour will boost the regional economy. Once fully implemented and operational, the AEC has the potential to create 14 million new jobs from 2015 to 2025 and increase the annual growth rate in the region to 7.1% in 2025, from the average growth of 5.1% between 2007 and 2013, according to the report by the International Labour Organization and the Asian Development Bank. The AEC will be a major driver for growth in the region. In fact the SAEC is already translating into significant opportunities through increased inter- and intra-regional trade, regional and domestic tourism, expanded financial and insurance

services, and higher demand for logistics services.

There are several divers for growth in the SEA region, namely:

A young and growing population

Increasing urbanisation rates

A growing services sector

Rising middle income (middle income population has doubled over the last 10 years – from 60 to 125 million, and is expected to reach 195 million by 2020)

Competitive labour costs compared to China

Increasing Foreign Direct Investment (FDI); which in 2014 in the ASEAN-5 (Indonesia, Malaysia, the Philippines, Singapore and Thailand) grew by 7%, while in China FDI fell by 3% during the same period, according to Bank of America Merrill Lynch.

Improving competitiveness (Singapore, Malaysia and Thailand are among the top 10 most competitive economies in Asia Pacific, with Singapore ranking 2nd worldwide), according to the World Economic Forum).


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Economy (II)

Singapore GDP (cp), inflation & unemployment, 2010-2015

Indonesia GDP (cp) US$ billion, unemployment and inflation

Source: National statistical authority







investment.



















respectively.

















one-half of it).



a larger economy.






The region will need to sort out some of its problems in order to grow to its full potential. These include:

• Political risk and corruption

• Weak public infrastructure

• Shortcomings in education and innovation

• Immature financial markets

• Huge disparities between the AEC nations

Singapore

Singapore saw a relatively muted GDP growth of 2% year on year (YoY at 2010 prices) in 2015, down from 3,3% in 2014. The slowdown and rebalancing of the Chinese economy, lower commodity and oil prices, and falling global demand, precipitated a significant dampening of business confidence in the last few months of 2015, resulting in the economy expanding by just 1.8% YoY in the last quarter of the year.

According to the latest survey carried out by the Singapore Commercial Credit Bureau, the Business Optimism Index fell into negative territory for the first time in three years, whilst there was

also a slowdown in hiring activity.

The manufacturing PMI worsened and hit a 40-month low in March 2016.

Inflation has decreased sharply since 2012 and was negative in 2015 (-0.5%), while unemployment remained low (2%).

Economic growth is expected to weaken in 2016, expanding less than 2% and to increasing to 2.3% in 2017.

The government will increase public expenditure in order to counteract the negative economic trend, which will most probably push the 105% public debt to GDP to an even higher level.

Indonesia

Indonesia’s economy expanded 4.8% in 2015 (2014: 5.0%). The government introduced a series of stimulus measures in September and October designed to boos t economic growth. Government consumption expanded a significant 7.3% annually. Fixed investment also gained traction, expanding 6.9%, while private consumption grew 4.9%.



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Economy (III)

Malaysia GDP (cp), inflation & unemployment, 2010-2015








investment.



















respectively.

















one-half of it).



a larger economy.






Indonesia (continuation)

The manufacturing PMI edged down and consumer confidence decreased in February 2016.

Looking forward, low-oil-prices will continue to weigh on government revenues, and might affect the government’s stimulus plans, while the tax amnesty bill that was supposed to boost government revenue by over USD 4 billion has been delayed in Parliament.

The external sector continued to suffer the effects of sluggish global demand and falling commodity prices. Exports contracted a significant 6.4% in Q4. Imports plummeted by 8.1%, reducing considerably the external sector’s net contribution to overall growth. The economy is expected to expand 5.1% in 2016, and 5.3% in 2017. Inflation and unemployment remained relatively stable at 6% and 5%, respectively.

Malaysia

Malaysia’s GDP expanded 5% in 2015. The stronger-than-expected performance occurred in spite of a series of negative factors, including currency depreciation, concerns about political instability, and unfavourable conditions for investment and consumption, as well as a collapse of revenues related to the oil and gas sectors.

Growth was partly driven by strong growth in consumption , in spite of the implementation of the Goods and Services Tax (GST) in April 2015. Government consumption slowed down slightly, while fixed investment deteriorated substantially in Q4 2015, resulting in a 4.8% annual increase.

Although public investment and private investment in the oil and natural gas sector fell substantially, private investment in manufacturing and services remained robust, showing the country’s economy to be less reliant on the oil and gas sector.


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Economy (IV)

The Philippines GDP (cp), inflation & unemployment, 2010-2015








investment.



















respectively.

















one-half of it).



a larger economy.






Malaysia (continuation)

Malaysia is a key exporter of petroleum and liquefied gas and has seen uninterrupted export contractions in USD terms since October 2014, as prices for petroleum products and palm oils remain stuck at historical lows. Despite this, the country has a current account surplus, as the country’s export sector continues to be buoyed by electrical and manufacturing products for US and China. Exports grew 3.7% YoY in 2015.

In spite of political instability and uncertainty surrounding the replacement of Central Bank Governor Zeti Akhtar Aziz at the end of April 2016, Malaysia’s economy is well diversified and looks to be able to hold up during the current period of heightened financial volatility.

The government projects GDP growth of 4.0%–4.5% for 2016, while experts anticipate a 4.7% economic expansion for 2017.

The Philippines

The Philippines’ macroeconomic performance improved significantly under President Benigno Aquino III. His term, which started in 2010, has been characterized by strong GDP growth, an anti-corruption drive, increased foreign investment, fiscal stabilisation, infrastructure development as well as strong performance in the manufacturing, agriculture and business-outsourcing sectors.

In the full year 2015, the Philippines economy grew 5.1.

Consumption rose by 7.5% year-on-year, marking the largest gain in over three years. Public spending recorded a buoyant 17.4% increase, the fastest expansion in nearly four years. Private consumption accelerated slightly, reaching the fastest pace of growth since Q3 2012. Fixed investment also rose sharply, to a five year record high.

In the external sector, exports of goods and services expanded 7.1% over the previous year (up from the 6.5%). Conversely, imports decelerated slightly (13.3% YoY increase, resulting in the external sector’s making net contribution to overall economic growth in the region of 1.9 percentage points.

Inflation has dropped significantly, to just over 1% (down from 4,5% in 2014).

FocusEconomics Consensus expect the economy to expand 5.9% in 2016 and the same for 2017.


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Economy (V)

Thailand GDP (cp), inflation & unemployment, 2010-2015


Thailand

Thailand has a growth model that is trade oriented. Exports of goods and services account for about 74% of GDP, representing one of the biggest GDP shares in the region.

In addition, imports account for around 70% of GDP. Thailand’s external position is strongly subject to price volatility as the economy is heavily dependent on trade.

The structure of Thailand’s economy means that it mainly on services and manufacturing. The services sector accounts for around 45% of total GDP. The most important contributors are tourism, retail sales, transportation, as well as banking and finance. Tourism is one of the biggest contributors to the sector, while its own share of total GDP is around 10%. Industry accounts for 42% of Thailand’s total production the main component being manufacturing. The country’s top manufacturing products include automobiles, hard disk drives, natural and synthetic rubber,

textiles, etc. A significant share of these products is exported.

Agriculture contributes the remaining share of total GDP.

Measured at current prices, the Thai economy expanded 3.1% in 2015, (up from 2014’s 1.8%) The result broadly reflected an increase in government spending and strong domestic demand, while the external sector continued to drag on growth (-3.5% YoY.

In 2015 the economy benefited from an accommodative monetary policy and a calmer political situation, following the military coup in 2014.

The expansion was underpinned by the military government’s stimulus measures. Last year, budget spending accelerated in an effort to help both businesses, and fixed investment in 2015 grew 9.4%

According to FocusEconomics , the economy in Thailand will grow 2.6% in 2016, and 3.3% in 2017.

Vietnam

In 2015 GDP expanded 6.7%, according to data released by the General Statistics Office (GSO) of Vietnam.

2015 exceeded the government’s growth expectations of 6.2%, and marked an improvement over 2014’s 6.0% growth.

By sector, agricultural production slowed down, from

3.4% in 2014 to 2.4% in 2015, while growth services edged up from 6.0% to 6.3%. The industrial sector saw a sharp expansion of 9.6%, the best rate ever recorded.

The government expects the economy to grow again in 2016 by 6.7%. Experts anticipate the same level of expansion for 2017.


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Construction

Source: Savills World Research

Singapore

In Singapore leasing activity fell 2.6% in Q42015. This is the second consecutive quarter of decline and landlords have begun to focus their efforts into tenant retention. On the other hand, occupiers are cutting expenditure and sub-letting space not used.

Despite this, the market still witnessed sizable new leases and expansions, albeit at a slower pace. For example, IBM took over 75,000sq ft. of office space to relocate their Asian headquarters from Shanghai, while LinkedIn leased an entire extra floor.

Future releases are being partially rented (such as the case of the Guoco Tower, with 890,000 square feet of office space expected to be available by mid-2016), but at lower pace.

Sluggish sales of office properties continued into the last three months of 2015.

The average vacancy rate of CBD

Grade A offices increased to 4.8%.

The full-year absorption ended at around 596,800 sq ft., a decrease of 14.9% compared to 2014 (the lowest on records since 2009)

With the 942,000 sq ft. of net new supply in 2015, the vacancy rate for CBD Grade A offices increased 1.1 percentage points (from 3.7% as at the end of 2014)

Average monthly rents of CBD Grade A offices. Declined 5.7% YoY, with premium locations having sharper declines (12%) as banks reduce their expenditure.

Prolonged weak demand, protracted “wait-and-see” attitudes adopted by occupiers, imminent substantial future supply with low pre-commitment levels, and continued shedding of excess space by existing tenants (particularly from the financial and energy industries) will continue over the next two years, depressing rental prices by around 10% in 2016, increasing vacancy rates and most probably delaying some projects.

Bangkok, Thailand

Net absorption in 4Q2015 totalled 12,800 square meters (sqm). Many tenants left their class B buildings and moved into class A offices (including the emblematic Bhiraj Tower).

Grade A office stock in the CBA increased to 1.84 million sqm.

Gross rents rose 2.4% in a quarter and values rose 4%, driving

rental yields down slightly (to 6.7%)

Net absorption is forecast to reach 60,000 sqm in 2016, yet vacancy rates, currently at 9%, will rise on the short term, as a result of new completions (which will be gradually absorbed). Rents are likely to increase due to a low supply of class A office space in CBA.

.

Singapore net demand and supply, vacancy rate CBD A grade offices,

2006-2015


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Construction (II)







investment.



















respectively.

















one-half of it).



a larger economy.






Jakarta, Indonesia

Low commodity prices and the depreciation of the rupiah impacted on demand for office space in 2015. A number of smaller oil & gas firms either downsized or closed down, and performance in other sectors was mixed. Payment methods and infrastructure hamper e-commerce in Jakarta, although some international firms have invested in Jakarta and others may follow suit.

Vacancy rates reached double digit figures (14%, from 3% in 2014) due to a handful of completions (large projects), and further completions will push vacancy rates higher.

Rent prices fall for two consecutive quarters (1.9%). However, international firms considering Jakarta might reduce downward pressure on rent prices in the near future.

As long as oil prices remain low, demand will be weak, which will keep vacancy rates in double digit figures and put pressure on rents.

Kuala Lumpur, Malaysia

Continued political and economic uncertainty, affecting commodity prices and the oil and gas sector, has weakened the Malaysian ringgit and dampened office leasing activity in Kuala Lumpur.

In 4Q,2015 74,000 sqm were added to the office stock (Damansara City Towers 1 and 2), but new supply will be low until 2018.

Rents continued to decline on the back of a subdued leasing market, as landlords agree to lower rental prices in order to retain their tenants. Investment yields held stable as values moved in tandem with rental prices.

Vacancy rates currently at 13.5% will continue to rise while yields should remain flat.

Manila, Philippines

Strong demand for new completions keeps net absorption relatively high, and vacancy rates low (4.6%), on the back of high pre-commitment to developments completed in 4Q,2015.

Rents inched up by 0.9% quarter on quarter (2.9% during 2015), due to continuous demand from offshore outsourcing firms. Prices rose slightly less over the last quarter (0.7%).

Investors are monitoring the US Fed’s decisions in terms of increasing interest rates, as that would affect the economy of the Philippines.

A total of 278,000 sqm of office space will be made available in the first six months of 2016, from 8 office developments, which will most likely push vacancy rates up in the short term, but demand is expected to continue to grow, driven by the outsourcing and offshoring (O&O) industry, as shared services operations continue to expand in the country, which will drive rental prices up.


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Market forecast and trends

Section 4


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Total market

Total structured cabling market by country, US$ million, 2012-

2018

Source: BSRIA

BSRIA expects the SEA structured cabling market to continue to grow over the coming years, to reach almost US$ 208 million by 2018.

Less developed markets are expected to grow at slightly higher rates, albeit from a lower base.

The market for structured cabling is expected to grow over the forecast period by just over 4% on average, and to expand faster in 2017 and 2018 than in 2016, due to the situation of the global economy. Growth is also expected to be higher in the DC market segment than in the Local Area Network (LAN) market.

In addition to the well established DC market in Singapore, Indonesia is expected to see its DC market growing faster than average, as a result of several future projects and of Indonesia becoming a local hub for DCs.

Singapore, being a mature market, will have the smallest growth over the 2015-2018 period, expanding at a compound annual growth rate (CAGR) of just 2.2% year on year. The health sector will be the main vertical driving growth in Singapore, as heavy investments will continue to take place (the largest in 2015 was Sengkang Hospital with 40k ports 7A by Nexans), and transport with the cabling of the downtown line (stations, convergence and campus) and the future Airport Terminal 4 with just under 200k square metres, while the financial sector, one of the main verticals in the country, is expected to reduce investment levels.

Collocation DCs have plenty of available space, so no large projects are anticipated in this market either.


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Copper and fibre cable market by value, US$ million, 2012-2018

Total market

Source: BSRIA

In Singapore convergence of building services is generating demand of structured cabling with projects in the transport vertical (37 train stations and a new airport terminal).

Indonesia will be the best performing market in the region, with hospitality, the financial sector and the DC segment as main drivers for growth. Indonesia will grow more than 6% in the 2015-2018 period.

Malaysia’s cabling market is expected to have a CAGR of 5% over the foreseeable future, as many projects are in the pipeline. Oil and Gas will be one of the main sources for cabling demand in 2016-2017.

Thailand will see growth from the DC segment, as Telecoms and collocation services will invest in the country. The market in Thailand is expected to expand around 3% year-on-year, between 2015 and

2018. Growth could be even higher if the political situation in the country improves.

Vietnam and the Philippines will both grow at 4.3% and 4.5% year-on-year respectively, although these are the smallest cabling markets out of the six included in this study.

For the Philippines the main verticals will be casinos (most of them awarded to Panduit) and call centres.

In the case of Vietnam, the Oil and Gas vertical will be the main driver for growth.


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The characteristics of a more advanced market are clear, in the case of Singapore, being the market with a higher share of Cat 6 (60% by volume), and Cat 6A and above categories (estimated at 27% by volume). Singapore is the only market where there are any sales of Cat 7/7A (2% by volume).

The other markets have a much smaller share of higher categories (in single-digit figures), with the market being a combination of Cat 6 (the main category) and high volumes of Cat 5e cabling (around 40% or higher), depending on the country - with the Philippines being the country with the highest share of Cat 5e.

SEA is chiefly an unshielded region, where UTP copper cabling is estimated at 85%, by value. Singapore is the country with the highest share of shielded cabling (24%), mostly for Cat 6A and above categories and in DC applications.

Malaysia and Indonesia have a slightly higher share of shielded cabling than Thailand, Vietnam and the Philippines.

Overall, the trend is towards growing amounts of Cat 6, as prices are expected to remain low due to international copper prices, and the gap between both categories narrows.

The main market for Low Smoke Zero Halogen cable jacket is Singapore, although the lack of regulations keeps the level of LSZH sales subdued. The main vertical for LSZH cable in Singapore is the public sector and European companies with policies favouring the use of LSZH cable. Around 90% of the copper cables installed in 2015 were PVC.

Market segmentation by category

Market segmentation by category, by volume, 2012-2018

Source: BSRIA


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The data centre market in the SEA region is estimated at less than US$ 26 million (14% of the total cabling market), but with clear differences between countries. While in Singapore DCs are estimated at 21% of the total market by value, in the Philippines and in Vietnam the value of DCs is in single figures (8%). Singapore and Indonesia are the main geographical markets for DCs in the region. Nexans, Panduit, TE Connectivity, R&M and CommScope are the main players in the DC arena. Pre-terminated fibre and copper sales continue to be low. Installers see them as a threat to their income and labour costs are low (with the exception of Singapore). For this reason, fibre has only a slightly higher share than copper in the DC market segment (around 60%), far from the 80% or 90% seen in other markets.

In Singapore, the real estate developer Kingsland Development has invested more than S$100 million developing a six-storey wholesale data centre in Jurong (finished in October 2015). Telcos, e-commerce firms and banks are among the main clients. Telin - telecom - is currently building a DC mainly for collocation services too in Singapore. Google is planning to build a second DC in Singapore. As mentioned before, Indonesia is the second largest DC market in the region and will continue to grow. The other 4 countries in SEA have small DC markets. Out of these 4, Malaysia is the only country in which DC market penetration is above 10% at 13%.

Data centres

DC market by country, US$ million, 2012 - 2018

Source: BSRIA

Regional market, US$ million, 2012 - 2018


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The SEA market leader continues to be TE Connectivity, with an aggregated market share of 28% taking into account both copper and fibre cabling products.

TE is market leader in 4 of the 6 markets considered (Indonesia, Malaysia, Thailand and Vietnam), and it is the second largest player in Singapore, after Nexans.

Panduit is the second largest player in the region and is the market leader in the Philippines.

CommScope, Prysmian, Nexans,

Belden, Datwyler, R&M, Schneider Electric and Siemon complete the top 10 ranking, but there are several other players in the market (FibreFab, Belden, Interlink

Corning, LS Systems, LAPP Group,

Alantech, CAE, Furukawa and DtC, among others).

The Prysmian Group (through the Draka UC brand) has seen remarkable growth over the past two years, after

launching copper and fibre connectivity solutions for copper and fibre products in 2013.

The company has production facilities in Singapore.

Nexans’ share across the region is estimated at 7%, being market leader in the main SEA market and the second largest player in Vietnam.

Datwyler’s main market is Singapore, where it is also a local manufacturer. The company is focused on the LAN market and has been awarded with several hospital projects in 2015.

R&M continued to grow in the region and has gained market share in Singapore, Indonesia and Malaysia.

Singapore

Singapore is the largest market, estimated at under US$ 48 million. Nexans is the market leader in Singapore, followed by TE Connectivity, Prysmian and Datwyler.

CommScope, R&M, Corning and Panduit are the next tier of players with 6%-9% of the market share each.

Total market

Regional market shares for structured cabling products, 2015

Market shares for cabling products Singapore, 2015

Source: BSRIA


Report 58921/2

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Indonesia

Indonesia is a small market compared to the country’s population and GDP. The developing economy and high rates of rural population have hampered a faster evolution of the cabling market, but the situation is expected to change over time, as we anticipate high growth rates over the coming years. TE Connectivity is the market leader in Indonesia, followed by Belden and Panduit.

CommScope, Prysmian and Corning are the next tier players.

As in the other SEA markets, there are a number of players holding a relatively small share of the market (1% - 4%), including LAAP Group , LS System and Schneider Electric. Malaysia Malaysia’s structured cabling market is above US$32 million, being the second market in the region in terms of per capita investment. TE Connectivity is the clear market leader in Malaysia,

followed by Panduit, CommScope and Schneider Electric. Malaysia is one of the markets in the SEA region that is expected to grow above average over the coming years.

Total market

Market shares for cabling products Indonesia, 2015

Market shares for cabling products Malaysia, 2015

Source: BSRIA


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Thailand Thailand ‘s cabling market is estimated at US$ 29 million, which is small in relation to the country’s population. The political situation has affected the market and it is expected to grow at a fast pace once the situation normalises. TE Dominates the market, followed by Interlink, with a combined share of 65%. The Philippines The cabling market in Philippines is

assessed at under US$ 22 million, despite the country’s population (100 million inhabitants). Panduit is, by far, the market leader in the country, with TE Connectivity and CommScope as tier 2 players. Vietnam Vietnam is the smallest market of the six analysed in this report, at US$ 17 million. TE Connectivity holds more than half of the market share, with the remaining portion of the market being very fragmented.

Total Market

Market shares for cabling products Thailand, 2015

Market shares for cabling products Vietnam, 2015

Source: BSRIA

Market shares for cabling products The Philippines, 2015


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Most of the cabling products in South East Asia are sold via distributors, although there are some exceptions (by country and brand). Some brands sell exclusively to system integrators / authorised installers, while others combined both channels (several brands reported 50%-50% sales). Some installers buy directly from Chinese factories and bypass local distributors. Some global key accounts have products shipped directly from the suppliers in Asia. Some key accounts specify the products in the US, and use US distributors to ship the products. Around 75% of cabling products are sold via distributors in all countries in SEA, with the exception of the Philippines where distributors account for 100%. Around 20% are

sold direct to SIs and installers and the remaining 5% are sold direct to key accounts in Singapore, Malaysia, Thailand, Indonesia and Vietnam. Lantrovision & Xin Networks are the largest system installers in the region.

Supply channel

5% 20% 75 %

Direct Installers/VARs Distributors

End User /

Building Owner

Cable and Component

Suppliers

Structured cabling supply channel

Source: BSRIA


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BSRIA © Page 29

Key distributors

Key distributors in SEA, 2015 (in alphabetical order)

Source: BSRIA

Singapore Indonesia Malaysia

ADV

Asia Wiring Systems

GEIC

LKH

NCS

Teck Seng

Unicom

PT Data Global

PT Netcom

PT Optiviel

PT Piramida

PT Unikom

ACE

Anixter

Asia Wiring System

E PLUS

FPS

VNET

Thailand Philippines Vietnam

Avantgarde (Royal Tech Group)

Big Paisan

GNet Solutions

Interlink

Narong

Nine Distribution

Asia Wiring Systems

CYO

Digicom

LANCO International

MEC Networks

TL

Asia Wiring System

Quang Dung (QD Tek)

U&ME


Report 58921/2

BSRIA © Page 30

[ Old Bracknell Lane West, Bracknell, Berkshire RG12 7AH United Kingdom

T: +44 (0) 1344 465 600 | F: +44 (0) 1344 465 626

E: [email protected] | W: www.bsria.co.uk

BSRIA’s Worldwide Market Intelligence division is a globally recognised source of strategic market intelligence and

consultancy in the building services industry

Reports available for: Air Conditioning, Heating, Renewable Technology, Energy, Smart Homes, Cabling and

Building Controls

[ Old Bracknell Lane West, Bracknell, Berkshire RG12 7AH United Kingdom

T: +44 (0) 1344 465 600 | F: +44 (0) 1344 465 626

E: [email protected] | W: www.bsria.co.uk

BSRIA’s Worldwide Market Intelligence division is a globally recognised source of strategic market intelligence and

consultancy in the building services industry

Reports available for: Air Conditioning, Heating, Renewable Technology, Energy, Smart Homes, Cabling and

Building Controls

South East Asia - Draka UC · ng Structured cabling South East Asia By Martin Chiesa Report 58921/2...

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