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Issue of June 2005 

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Indian SMBs spent $596 million on telecom

More than 20,500 medium businesses in India invested almost $596 million in various kinds of telecommunication-related technologies during 2004, reveals a study among 250 Indian SMBs. Local, long distance and cellular services that comprise a mammoth 73 percent dominate the overall spending.

However, overall telecom expenditure is likely to drop marginally in 2005 due to the falling tariffs of various fixed-line telecom services such as local and long-distance telephony and cellular services. Overall spending on IP-based technologies such as IP phones, IP PBX and IP Centrex is likely to rise in the next few years.

Some factors driving telecom growth are the government's plans to privatise International Long Distance telephony, legalise Internet telephony and increase the proportion of foreign direct investment in this sector.

These are likely to result in increased telecom investments, along with enhanced implementation of various communication-related technologies. India MBs are also rapidly embracing high-speed Internet with the gradual decrease in related access prices. Thus, increasing broadband usage is expected to be another important factor enhancing the use of IP-based technologies such as IP PBX, IP Centrex, VoIP and even Internet access through handhelds.

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Indian Express - Business Publications Division

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