Indian firms increase spending on telecom: Study
By siliconindia staff writer   |   Wednesday, 13 April 2005, 19:30 IST
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KOLKATA:Medium and small sized Indian companies invested almost $596 million in various kinds of telecommunication technologies, a study by AMI Partners said. The study said the overall spending is dominated by local, long distance and cellular services that comprise a mammoth 73 percent. However, the overall telecom expenditure is likely to drop marginally in 2005 due to a rapid price decrease in various fixed-line telecom services like local and long-distance telephony as well as falling cellular tariffs. Overall spending on IP-based technologies like IP phones, IP PBX and IP Centrex display a high-anticipated rate of escalation within the next few years. Having achieved complete saturation in terms of basic telephone connectivity, Indian medium businesses (MBs) are trying to strengthen the existing infrastructure; close to a quarter of businesses plan to add a further 2.5 telephone lines per enterprise next year. An interesting observation is that mid-sized manufacturing businesses are keener to install additional lines to boost their existing communication infrastructure, the study said. AMI's survey shows that more than 40 percent of India medium businesses prefer a bundled offering of local and long-distance services along with high-speed Internet services from a single provider. Close to a quarter of businesses desire additional services like VoIP, hosted applications, etc. Businesses are generally not very prone to switching service providers frequently. "Desire to remain with a single service provider is possibly prompted by the lure of anticipated cost savings due to volume discounts and also the wish to avoid hassles in switching operators," said Dev Chakravarty, analyst at AMI-India. Cellular usage by India MBs indicates rapid growth boosted by falling tariffs, increasing options of value-added services and advent of newer operators with state-of-the-art technologies Importance of cell phones has increased significantly in recent times among India MBs since this mobile technology enables companies to keep in touch with business partners as and when required. This is especially relevant in the current business scenario when enterprises need to be accessible by customers anytime and anywhere on a 24x7 basis. Consequently, around 69 percent of India MBs use cell phones currently; this proportion will escalate rapidly next year as India MBs approach complete saturation. Today's technically advanced cell phones are capable of not only receiving and placing phone calls, but also of storing data; taking pictures; receiving and sending e-mails and voice/text messages; web browsing; accessing WAP services; and being used as walkie-talkies, to name just a few available options. With the confluence of technology trends such as better hardware, faster networks and more sophisticated software, India MBs can utilize cell phones to perform essential business applications.

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