The AMI-Partners Blog

With worsening economic condition, negative sentiments, cutbacks in expenses, and climbing lay-offs, SMBs* are looking at various ways to keep their businesses up and running. Everyone is cutting back on costs: even individuals are reprioritizing their needs. While companies have put the brakes on expenses, there is still opportunity for the Telecommunication Service Providers to smile.

Need for Speed
No, I am not talking about the car racing computer game but referring to the need of SMBs for a better internet connectivity as they look to use audio & video conferencing, live presentations and other business application software to remain connected to their customers, real-time keeping a check on their travel expenses. This opens up numerous opportunities for the Indian Telecommunication Services Providers.

Not only the SMBs, but large businesses also prefer to reach out to their clients with various means offered by these service providers, helping them save time and cost on travel. Wireless data & smart phones, live presentation, audio conferencing, video conferencing, and other collaborative tools which help them connect with their clients in real-time with no time lag.

One of the key strategic IT focuses for SMBs emerged during the Q2 survey of Q-Pulse from AMI: Improving Internet/ networking bandwidth speed to use web‐based applications and deploying automated CRM capabilities to improve customer relationship.

The Future of Telecom Spending and Mobility
AMI’s Quarterly Tracker (Q-Pulse) for Q2 reveals that Q3 is expected to have an increase of 6.6% in the ICT spending in comparison to the last quarter, which will make India one of the fastest growing SMB ICT market. The Indian SMB telecom market was approximately $6.1 billion in size in 2008; there are quite a few sub-sectors that are growing rapidly. Some of these are VoIP, WAN, conferencing, Unified Communication, IP PBX/ phones and PDAs. The market is likely to undergo significant changes with the introduction of services like 3G/ WiMax, etc. by all major players.

According to TRAI the number of mobile subscribers in India crossed the 400 million mark in April this year, and will reach its goal of 500 subscribers by the next year. Whereas the total telecom subscriber base comprising of wireless and wireline has reached 452 million till May 2009 and is expected to grow at a reasonable rate in the next few years.

Spending on telecom services will create more business opportunities, collaboration & time efficiency, and will also help businesses to reduce expenses. During this critical phase and limited spending by the businesses, there will be a heightened need to communicate, serve and maintain strong relationships with existing customers, their partners, and employees, and at the same time attracting new clients. Hence a possible rise is seen in the telecom spending as compared to the last year as per the recent study by AMI.

Telecom services comprise a huge majority of the overall telecom expenses (at over 90%); its share is likely to drop marginally by over two percentage points over the next 5 years. The remaining portion is made up by telecom equipment that shows a perceptible 4.5% CAGR. Within the overall SMB telecom expenditure pie, SBs account for around 80% and are likely to show a slight growth rate over the next five years.

The SMB sector will create an immense opportunity for the telecom service providers in the coming days as they gear up to provide a tailor made solution for small and mid sized companies to cater to their requirements and be pocket friendly. The most recent AMI study focuses on the critical business issues, challenges, opportunities for the telecom service providers and uncovers the facts to help businesses make more informed decisions.

“*companies with up to 999 employees.

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Jyoti Singh is Manager of Client Services at AMI-Partners.