Mumbai, Oct 4 (KNN) Tata Teleservices Ltd which provides services under the Tata DoCoMo brand, is betting big on the small and medium size enterprise (SME) business.
Last fiscal, the company’s SME business achieved a 20 per cent growth as against the industry growth of 8 per cent. This year they are targeting a 20 per cent revenue growth and a revenue market share in excess of 10 per cent.
President - SME Business, Tata Teleservices Ltd, Prateek Pashine spoke to KNN on his plans for SMEs and the challenges faced in retaining them.
What are the services you offer for the SMEs?
Tata Docomo is a leading provider of comprehensive end to end telecom services and cloud-based services to SMEs in India. These services can be categorized into the following product clusters: Enterprise data (which includes Wireless Data, Broadband, Internet Leased Lines, etc); Enterprise voice (GSM, CDMA, 3G, Wire line Voice, IP voice); and Managed services (including Managed Hosting, Managed Networks, Co-location, InstaCompute, CDN, Managed Security and other services such as M2M, Audio Conferencing, Enterprise Mobility & Collaboration).
Why is Tata Teleservices focusing on SME businesses?
Among Indian small and medium enterprises, 'going mobile, going virtual and going global' have been the key drivers of ICT demand. Telecom revenues from the SME segment continue to show robust growth in FY13 and are expected to grow at 10 per cent CAGR over the next 5 years- making it an attractive market for us. We have been consistently delivering substantial value to our SME customers through customized products and processes, innovative delivery models that leverage our wide network footprint and strong customer service support. Today, the company has a strong base of SME customers with large number of resources deployed in the field and over 1200 channel partners.
How do you see the business prospects of Tata Teleservices with SMEs?
Buoyed by the response in the recent past, we are betting big on the SME business by offering a diversified product portfolio and acting as a one-stop-shop for SMEs. Out of our total capital expenditure, we will invest close to 40 per cent in network expansion for the SME business. Having already identified 75 clusters, we are in the process of identifying more clusters to roll out the network for SMEs.
What do you think are the growth areas for SMEs?
Like I said, data is poised to emerge as the key growth driver in this segment. Wireless Data service too is a high growth area for SMEs and is expected to grow at a CAGR of 16 per cent whereas SME Wireline Data market is expected to grow at a CAGR of 14 per cent from FY13- FY18. The SME Wireless Voice market too is expected to grow at a CAGR of 9 per cent in the same period.
What are your targets for the current fiscal year?
In 2012-13, Tata Docomo's SME business achieved a year-on-year growth of about 15 per cent, as against the industry's growth of 10 per cent. In the current fiscal, we are targeting a 20 per cent revenue growth; which double the industry growth.
Are you happy with the 20 per cent growth achieved by the SME business against industry growth of 10 per cent?
In the current context of a slowdown in the economy we believe this target is a realistic number for us to aim at.
“Retaining small and medium size enterprises for long is very difficult,” What according to you is the reason behind this?
This has been taken out of context. What I had said was that one of the biggest reasons customers churn is not because they seek alternate service providers but because they shut operations. Mortality rate of SMEs is the biggest reason for churn. We are otherwise able to retain and in fact grow our business from existing customers by offering a comprehensive product suite backed by a very customer centric delivery and service model.
What do you think are the opportunities for start-ups to capitalize in the Indian internet and mobile market?
Despite the current economic scenario there are clearly opportunities in key segments that SMEs can captalise on- for example exports, IT and ITES and BFSI where we believe there are significant growth opportunities for ICT products and services.