IT spending of Indian telecom vertical grew 14.3% in FY12

Cos adopt new avenues like mVAS, cloud, datacenter services which in turn are providing ample opportunities to IT companies

The Indian telecommunication companies which are feeling the heat due to the drop in there average revenue per user (ARPU) is exploring new ways to increase the wallet share. The companies are adopting new avenues like mobile Value Added Services (mVAS), cloud and datacenter services which in turn are providing ample opportunities to IT companies.

The Indian telecom sector has witnessed a significant growth in the last three years and the wireless subscriber market stands at 933.7 million subscribers while the wireline stands at 31.4 million said a study by Bangalore-based Zinnov. The company also said that the wireless segment is dominated by Bharti while wireline is dominated by BSNL

 

The report titled ‘Indian Telecom Market Overview 2012’ covers the overall industry growth, key technology trends and government regulations that have shaped the growth of the Indian telecom sector.

Presently, the data center market and capacity in India is valued at over $4 billion and is expected to reach at approximately $6 billion by 2014. According to Zinnov; nearly 1/5th of this segment is governed by third party while the rest is captive and lack of in-house skills, high investments, and long gestation periods pose challenges for captive data centers in India.

Praveen Bhadada, Director-Market Expansion, Zinnov Management Consulting, said, “IT spending in the telecom vertical is mature and has grown at a rate of 14.3 percent in FY 12 and has reached $2.4 billion out of which  the maximum spending takes place in hardware followed by services and BPOs. Focus on 3G and LTE has forced many telcos to re-look at modernizing their IT systems.”

The declining revenue share from the voice business have prompted many players to focus on MVAS opportunities. Indian MVAS market is expected to move from the traditional SMS based services to internet based and application based services. Presently valued over $5 billion, the Indian MVAS industry is expected to reach well over $6 billion by 2013, Zinnov said..

Some of the emerging MVAS categories in the country is M- Health, M- Governance, M-Education, M- Commerce, M- Agriculture, M-Infotainment. Telecom companies are facing some challenges in IT adoption like lack of clarity on consumer preferences, uncertain government regulations, predictability of future IT requirements is difficult, falling ARPUs affecting profit margins, management issues in PSUs, high operation costs in remote areas, it added.