“Covid has forced businesses to go digital and there is a huge demand for telcos to provide with the network and cloud related support. The improved fibre connectivity has also added to their advantage,” said Rohan Dhamija, partner and head, India and the Middle East, Analysys Mason.
Dhamija added that while operators in developed countries see 20-25% of their revenue come in from enterprise, in India it is less than 10%. Most of the revenue comes from the consumer business. “Less than 10% of the telcos’ revenue comes from enterprise and this can grow to 20-30% in the coming few years,” said Dhamija.
In a recent analyst call, Bharti Airtel India chief executive Gopal Vittal said that the enterprise business has grown in double digits over the last few years. “…we have also consistently grown market share and are outperforming other listed players in the last few quarters. Our business model is also extremely efficient as reflected in our industry leading margins of 38.7%,” said Vittal.
The second largest telco has noted that a large chunk of its business comes from the top 20% of its customers and therefore it aims to revamp its go to market strategy and give emphasis “both to hunting and farming”.
According to analysts, the pandemic has spurred the opportunity for India’s telcos to focus on their enterprise business to garner more revenue than would have otherwise not been possible.
Jio’s parent company Reliance Industries in its quarterly earnings had chalked out that the telco’s growth will come from a subscriber ramp up, enterprise solutions, narrow band IoT and scaling up of digital platforms. It has bundled digital solution packs which includes advisory services, digital management and aims to become the one stop shop for businesses.
Take the case of Vodafone Idea (Vi) which said in its post earnings call that its enterprise revenue was growing at a faster rate than its consumer revenue.
According to telecom consultant Rajiv Sharma, businesses which had expected to go digital in two-three years had to do it over the last six-seven months. And this is the window that the operators have spotted since they are now trying to be a telecom operator with IT capabilities.
The advent of 5G in India will also work for the telco which has built strong enterprise capability. “5G is not so much about B2C but will bring in automation, robotics that will spur B2B growth. Hence telcos are gearing up for that segment,” said Sharma.
Today, all three telcos have said they are 5G ready.