Airtel Outlines Its Enterprise Strategy

The best way to deal with competition is to diversify and innovate. That's what the Indian telcos need to do to achieve sustainable growth now that their traditional voice revenues are coming down.

It is not surprising then that the country's leading operator by revenues and subscribers, Bharti Airtel Ltd. has recently decided to re-brand its B2B business as Airtel Business. The intent is to add more solutions to meet the needs of the businesses across verticals such as IT, ITES, Government, FMCG, BFSI and Media. (See Airtel Launches Brand for Enterprise.)

"There is certainly pressure on current margins. The prices to consumers are going down, but the costs [of offering those services] are not coming down, so what are the other avenues to increase the revenue? We also need to explore other horizons to improve our revenues, so these two marry well," says Najib Khan, Chief Marketing Officer (Enterprise services), Bharti Airtel.

While the company's enterprise focus is not new, Airtel says that the re-branding exercise was done to ensure a more focused approach, especially towards the small-and-medium enterprises (SMEs) and small-and-medium businesses (SMBs).

The company's SMB definition covers businesses with less than INR 5 billion (US $0.088 billion) turnover and less than 500 employees today. An SME is less than INR 1 billion (US $0.017 billion) and 100 employees.

What's the focus
Going forward, the telco says its business division will focus on delivering efficient cloud-based solutions, data-center services, managed video offerings and a whole lot of other suite of services.

"We are seeing a customer from a holistic view rather than looking at him to provide a video or data solution. We are looking at what it takes for an organization to perform well. They [the enterprises] have multiple offices, multiple applications, and use multiple devices. What is critical is to identify technologies that will enable them to work efficiently," says Khan.

The company sees cloud as a huge opportunity, especially in the SME and SMB sectors. According to Airtel, the opportunity for mail, Enterprise Resource Planning (ERP) and Customer Relationship Management (CRM) solutions for a certain set of solutions in India can be over US $100 million (INR 5.6 billion) in the next few years. At present, the company says the addressable opportunity is close to INR 2 billion (US $0.035 billion) and expanding.

Khan adds that their distribution model and the early-mover advantage for certain set of solutions will keep them ahead of competition from carriers. "We have always built on our scale. Since we have a huge distribution model in place which naturally comes from our consumer business, we know how to approach business customers. We also have a complete solution portfolio from wireless to wireline to satellite and cloud. Moreover, as a telco, we have the advantage of using our own network, data-center and even providing access from our office for 3G and 4G," says Khan.

Advantage first
Bharti Airtel claims to be the first and the earliest telco to get into the managed-video-service space, where it aims to utilize the customer endpoints, which could be a tablet, handset, desktop or a studio. As the days go by, more operators are looking at OPEX-based services.

"Videoconferencing has become a big hit. It is becoming critical for businesses to invest in face-to-face meetings, with reduced emphasis on travel...business is largely impacted by IT/ITES. SME is the fastest-growing segment where managed video conferencing is a hit. The core product is IP and NLD. The new kid on the block is MPLS. Customers are moving from the traditional leased line...that has been the strategy," adds Khan.

The company also has engagements with application service providers for whom it creates platforms utilizing the cloud to meet the needs of the enterprise customers. "While for a telco, core element is fiber, for applications part you certainly need partners. Since customers also dont know what they want and they just discover it over a period of time, a lot of customization needs to be done. We have partnership with application providers. They may not be big names but they understand the business needs," says Khan.

This is a key area where Bharti needs to give a strong push since the service is not offered directly by the company. OSS/BSS integration is another advantage that telcos can have over system integrators offering cloud solutions. "Advantage of a telco is that it has cracked the piece of billing, the OSS/BSS integration," Khan adds.

The status was further cemented by Sanchit Vir Gogia, Senior Analyst at Forrester Research Inc., who adds"One of the key advantage which a telco have while offering cloud solutions over system integrators is that the OSS/BSS integration. However, the key challenge for a teleco is to deploy the required IT systems and processes such as application service support and integrated billing mechanisms to deliver robust cloud services"

Besides Bharti, other service providers like Reliance Communications Ltd., Vodafone Indiaand Idea Cellular Ltd. have also started focusing on the enterprise space. Idea has recently formed a separate enterprise division. Vodafone also has a separate division to cater to the SMEs. (See RComm Expands Application Network Service, Vodafone Launches CEC For Enterprises and Vodafone's Enterprise Vision.)

Jatinder Singh, Principal Correspondent, Light Reading India