Tata Docomo is gearing up to increase presence in the Indian SME (small and medium enterprises) market.
The telecom service provider will focus on expanding its channel presence, geographical reach, addition of new products, etc.
The SME market size for telecom services — wireline voice (Rs 3,500 crore), wireline data (Rs 2,500 crore), mobile voice (Rs 3,200), mobile data (Rs 300 crore) and managed services business (Rs 1,000 crore) — is around Rs 10,500 crore, growing at 8 percent.
The industry’s wireline voice, dominated by BSNL, is growing at around 1 percent. But Tata Docomo growth is around 15 percent. The industry growth of wireline data is around 14 percent and growth of Tata Docomo is 28 percent. Tata Docomo is the market leader in wireline data for SMEs. Growth of Tata Docomo and the industry in mobile voice space is around 9 percent. Managed service for SME is growing at around 25 percent.
Though Tata Docomo is said to be the market leader in the overall enterprise telecom market, it faces tough competition from BSNL, Reliance Communications, Bharti Airtel, Vodafone, etc.
Recently, Vodafone India said its enterprise business (including SME) contributes around 10 percent revenue to income from mobile services. Airtel’s enterprise business contributes around 7 percent revenue to mobile services income.
Tata Docomo generates around 30 percent revenue from non-mobility business. This is significant for a new telecom operator.
However, Tata Docomo, a brand of Tata Teleservices, has several challenges since several enterprise offerings are becoming commodity products. “We look at adding value to a product before selling. That’s why Tata Docomo is getting repeat orders from 70 percent of its SME customers,” said Tata Teleservices (TTSL) president – SME Prateek Pashine.
Plus, the churn is around 2 percent. The churn is primarily because SMEs are going out of business or stopping a particular project. “We do not miss customers due to price or quality,” Prateek, who has been with the Tata group for more than 10 years.
His confidence in the SME business stems from the fact that Tata Docomo has a head and 1,000 plus strong team to look after SME space and address customer concerns in India. Several telecom service providers do not have this kind of focus. “Many SMEs do not understand IT. We are the advisors to Indian SMEs to offer customized solutions,” Prateek said.
Against an industry growth of 9 percent last year, Tata Docomo’s SME business rose 15 percent last year. The target this year is to achieve 20 percent. Tata Docomo is doing a 12-city SME engagement program to boost the revenue from 35 cities in 9 regions across its 22 telecom circles.
Currently, Delhi NCR region is the largest SME market, which is home to 10 percent companies and 16 percent spending. Mumbai is the second largest SME market in India. Mumbai is home to 13 percent SMEs and 17 percent SEM spending on telecom related sourcing.
Tata Docomo claims that it can compete with companies such as Google and a host of web-based solution providers because it provides local billing in local currency, low latency, local support and assistance of 1,200 channel partners (around 350 in Delhi alone).