For a long time, the telecom industry in India had been a typical example of the banes of plenty. Buried under the burden of regulatory compliance and fierce competition, companies in the telecom sector have been struggling to keep their heads above the water.
But things are looking up. Piggybacking on more than 868 million mobile subscriber base, and reforms introduced by TRAI and DOT, the telecom sector has got a new lease of life. As a result, since the beginning of 2013, some Indian telcos have raised tariffs by at least 30 percent either by increasing headline tariffs or reducing free minutes that will have a positive impact on the industry. "After lying low for the last two years, mobile companies will definitely start investing in 2013 to gain more subscribers and bank on the new surge of data-related services on mobiles," says Praveen Dwarkanath, director, MN World Enterprise.
That's something Gaurav Jain, associate director at IDC's India Consumer Mobility and Telecom Group, agrees with. "Regulatory authorities like TRAI and DoT have been ushering in several reforms. As security laws tighten, mobile services providers will also be forced to invest significantly in compliance-related IT infrastructure, to be able to monitor what flows in and out of their networks," he says.
This flood of data pushes the demand for technologies like business analytics, big data, and documentation automation. "One of the customers I am currently working is curious about how he can leverage customer data to gain better business insights. Organizations are re-engineering and leveraging data to increase sales," says Dwarkanath.
But investing in these technologies calls for cold hard cash. Sure, the economy is down, but telecom's coffers have reasons to rejoice. Last month, the government increased the FDI cap in telecom from 74 to 100 percent. "Steps like these will bring in some fresh investment to help telecom companies ramp up their operations and build the infrastructure to support the sector's growth," says Jain.
That, coupled with a surge of demand for data-related services, believe Jain and Dwarkanath will drive telecom operators to invest in IT. To further fuel this growth, the telecom department is trying to lower entry barriers for Internet service providers--to shore up broadband penetration levels--even as the government readies to roll out a Rs 21,000 crore national fibre optic network to take high-speed Internet to India's hinterlands.
"With new 3G auctions in the offing, and the explosive growth of data moving in and out of networks, mobile operators will have to significantly invest in storage, compute, and network capabilities to cater to the demand," says Dwarkanath.
That means more business for channel partners who are focusing on these technologies.
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