SMBs To Spend $6.4bn On Telecom

Small and medium businesses in India are on track to spend more than $6.4
billion this year on telecom equipment and services, about seven percent more
than they did last year, according to a recent study by New York-based Access
Markets International (AMI) Partners, Inc.

“Spending on telecom services such as cellular services, and local and
long-distance telephony accounted for more than 90 percent of total telecom
spending last year,” said Dev Chakravarty, Senior Analyst, AMI-Partners.

Small businesses account for the bulk (about 80 percent) of the telecom
spending among Indian SMBs. This is due to their sheer numbers as SBs account
for more than 99 percent of all SMBs in India. SBs want to set-up a robust
connectivity infrastructure that enables them to interact with their business
partners and other stakeholders.

“Cellular penetration within SBs has reached near-saturation at 98
percent-almost on par with usage of local phones,” said Chakravarty.

The India telecom sector is set to move forward-the SMB sector itself speaks
of adding around 0.5 million new tele­phone lines in the next 12 months. Future
trends indicates a likely advent of

3G communications and the possible entry of foreign opera­tors into the spectrum
fray. These are likely to bring in good tidings for SMBs as these services will
bring in increased value-added services and tools for SMBs that will help them
improve their offerings to custo­mers as a part of better customer relationship
management.

India SMBs are set to adopt unified communications-which integrates multiple
communica­tion systems such as fixed and mobile voice, e-mail, instant
messaging, fax, VoIP, etc-to streamline their methods of information
dissemination and collaboration with remotely located employees. The service
sector dominates overall India SMB unified communication spending-comprising
more than four fifths of the total. Within the former, audio conferencing has a
relatively larger share of the pie; followed by other communication methods like
video, web conferencing and instant messaging. “Usage of video and web
conferencing is still at an embryonic stage within India SMBs but is anticipated
to move forward along with greater availability and affordability of bandwidth;
many ISPs are indeed striving to bring down the broadband costs.”

“SMBs are considering cutting down on business travel to bring down
costs-especially in the wake of spiraling fuel prices,” Chakravarty added.
“Other real-time communication methods like audio and video conferencing can
help them reduce the needs of business travel and face-to-face meetings.”

Among India telecom service providers, BSNL/MTNL conti­nues to be the market
leaders in terms of local and long-distance services. This is followed by Bharti
Telecom. The rest of the market is fragmented with Reliance and Tata battling
for marketshare. However, the overall market leader for telephone equipment is
Beetel-it enjoys a healthy penetration-being used by 40 percent of SMBs.

DQC News Bureau