August 11, 2008
AMI-Partners: Telecom Spending Among India SMBs Set to Cross US$6.4B in 2008
Small and medium businesses (SMBs or companies with up to 999 employees) in India are on track to spend more than US$6.4 billion this year on telecom equipment and services, about 7% 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% of total telecom spending last year," says Dev Chakravarty, Senior Analyst at AMI-Partners.
"Cellular penetration within SBs has reached near-saturation at 98%--almost on par with usage of local phones," Mr. Chakravarty says.
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 indicate 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 services 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," Mr. Chakravarty says. "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 leader 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 market share. However, the overall market leader for telephone equipment is Beetel--it enjoys a healthy penetration--being used by 40% of SMBs.
AMI's 2007 India Small Business Overview and Comprehensive Market Opportunity Assessment and 2007 India Medium Business Overview and Comprehensive Market Opportunity Assessment studies highlight these and other major trends in the context of current/planned IT, Internet and communications usage and spending. Products and services covered include established and emerging hardware, software, applications and business process solutions. Based on AMI's annual surveys of SMBs in India, the studies track a broad spectrum of issues pertaining to budgets, purchase behaviors, decision influencers, channel preferences, outsourcing, service and support. Also covered are detailed firmographics and critically important technology attitudes and strategic planning priorities. This data points to key opportunities and messaging hot buttons for vendors and service providers seeking to match their offerings to SMB market requirements.
For more information about this study, AMI-Partners, or our global SMB research, call 212-944-5100, e-mail [email protected], or visit the AMI Web site at www.ami-partners.com.
About Access Markets International (AMI) Partners, Inc.
AMI-Partners specializes in IT, Internet, telecommunications and business services strategy, venture capital, and actionable market intelligence--with a strong focus on global small and medium business (SMB) enterprises and extending into large enterprises and home-based businesses. The AMI-Partners mission is to empower clients for success with the highest quality data, business strategy perspectives and "go-to-market" solutions. Led by Andy Bose, the firm has built a world-class management team with deep experience cutting across IT, telecommunications and business services sectors in established and emerging markets.
AMI-Partners has helped shape the go-to-market SMB strategies of more than 150 leading IT, Internet, telecommunications and business services companies over the last ten years. The firm is well known for its IT and Internet adoption-based segmentation of the SMB markets, its annual retainership services based on global SMB tracking surveys in more than 25 countries, and its proprietary database of SMBs and SMB channel partners in the Americas, Europe and Asia-Pacific. The firm invests significantly in collecting survey-based information from several thousand SMBs annually, and is considered the premier source for global SMB trends and analysis.