Falling revenues from voice & data businesses force telcos to look for new sources of income

Leaders of the Indian telecom industry such as Bharti Airtel, Vodafone India and Idea Cellular have registered a fall in their revenues from their voice and data businesses. This has forced them to look for new revenue streams in the government's smart cities initiative, home automation, healthcare and cloud and energy management services.

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The fall in revenues is credited to the entry of Reliance Jio, which, with its freebies and slashed prices, has proved to be back breaking for these companies.

Other than being service oriented, the highly competitive enterprise market also requires high level service commitments and robust infrastructure. These enterprises are now looking towards telcos, because of their ability to provide end-to-end solutions.

"As businesses get more complex, operators need to look into enterprise solutions like healthcare services, cloud services, energy management, analytics and Internet of Things (IoT)," said Bharat Bhargava, partner, telecom advisory for EY. "Selling solutions will help them improve margins and increase customer connect. In times of price wars, these are also new sources of revenue," he told ET.

Globally, the telecom enterprise communications business will exceed $200 billion by 2020, with the Asia Pacific countries including India overtaking North America to become the biggest revenue generator in enterprise mobility by 2017, says data from ABI Research data.

The global enterprise segment, which India is a part of, is showing an annual growth rate of 13.7%, with Airtel, Idea and Vodafone being the top players.

"We are growing faster than the market, led by strong growth in fixed line and in small medium enterprise (SME) business," said Nick Gliddon, Director at Vodafone Business Services. "We are making a strong foray into Internet of Things (IoT) solutions and investing in cloud Infrastructure."

Idea Cellular, owned by Kumar Mangalam Birla and India’s third largest telco, has seen an almost 100% on-year growth in its enterprise business.

"Idea is particularly focusing on fixed line connectivity, location based services and cloud based voice and application services to meet the customer requirement. We see huge opportunity around home automation, connected cars, location based services, and mobile health which will further fuel this growth" said Idea officials.

Other than the incumbent telcos, newcomer Reliance Jio, owned by Mukesh Ambani, has also formed a team that would look at getting more and more projects from this segment.

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