Indian SMBs to invest $8.73 billion on telecom

CYBERMEDIA NEWS

Buoyed by country's booming economy, Indian small and medium businesses (SMBs)
are on track to spend over $8.73 billion on telecom equipment and services this
year. Expenditures on telecom services accounted for the bulk of all telecom
investment, comprising 95 percent of total spending, according to the latest
study by New York-based AMI-Partners.

As India's small and medium businesses (with employee sizes between one and
999) embrace the fast-globalizing economy, interaction with business partners
has become an important focal point for these businesses. “Indian SMBs
invariably prefer a highly personal touch in their interactions with business
partners. Their primary methods of communication with both clients and
suppliers/vendors are via telephone calls and in-person visits,” said Neha
Jalan, Analyst, AMI-Partners.

Expenditures on telecom services accounted for the bulk of all telecom investment, comprising 95 percent of total spending

Local telephony remained the primary driver of telecom spending among India's
small businesses, accounting for 55 percent of all telecom spending. Majority of
India's small businesses are consumer-centric, though sales to other small
businesses also account for a significant proportion of their revenues. These
businesses prefer to partner with other local small businesses, and telephone
conversations remain their primary means of communication with business
partners.

Despite the widespread usage of cellular phones, landlines are essential to
small and medium businesses in India — they average 2.21 telephone lines per
SB, and close to 20 lines per medium business. “The state-run communications
service provider BSNL is the undisputed market leader among Indian SMBs, two
thirds of whom have BSNL connections,” noted Jalan.

“However, lately, private vendors such as Bharti, Tata Teleservices and
Reliance Telecom have been expanding their territorial reach and making inroads
in this lucrative market,” Jalan added.