Indian SMBs to invest $8.73 billion on telecom

KOLKATA: Indian small and medium

businesses (SMBs) to spend over $8.73 billion on telecom equipment and

services this year, according to the study by New York based AMI-Partners.

Expenditures on telecom services accounted for the bulk of all telecom

investment, comprising 95 per cent of total spending.






As


India's SMBs (with employee sizes between 1 and 999) embrace the

fast-globalizing economy, interaction with business partners has become an

important focal point for these businesses. “Indian SMBs prefer a highly

personal touch in their interactions with business partners,” says Neha Jalan,

Kolkata-based Analyst at AMI-Partners. “Their primary methods of communication

with both clients and suppliers/vendors are via telephone calls and in-person

visits.”






Local telephony remained the primary driver of telecom spending among India's
small businesses, accounting for 55 per cent of all telecom spending.






The 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.






Landlines are still 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.”






“Cell phone usage has surged significantly in the past year as a result of the
falling tariffs brought about by increased competition and the resulting price

wars,” remarked Jalan. Nine-in-ten SMBs already deploy mobile telephony and

usage of cellular phones is expected to approach saturation in the next twelve

months. Mobile telephony ranks third in their communication preferences —after

fixed telephony and in-person visits.






Cellular service expenditures form a significant proportion of medium
businesses' telecom service spending — accounting for close to a third. Less

than a tenth of medium businesses also access the internet via their mobile

devices and this service is anticipated to grow in the near future.






© CyberMedia News