Story of Indian Telecom Inc & failed business model of copycat servicing!

Recently I had good lengthy discussion with leading telecom executives in Delhi. It’s offbeat time. The whole of telecom industry is at crossroads. But what failed to impress me is the real ‘knack’ from these leading personnel. It’s hardly impressive.

Why these days telecom sector service firms finding their revenues stagnating? This could also be true for telecom product manufacturers/suppliers as well.  Perhaps the decade old revenue streams of servicing/supply have started drying up. Or there’s awakening time, though little late.

Now let’s talk about Telecom Chain of Servicing inIndia. InIndia, telecom companies like Airtel, Idea, Vodafone, Reliance etc are granted licenses to operate in cellular band. They are the service providers. But interestingly, the technological backbone or simply network (telecom towers)’ is run by some different companies. This could Nokia Siemens, Ericsson or Huawei (OEM) etc. This outsourcing is based on legal & commercial contract. Now these companies, namely Nokia, Huawei etc don’t have manpower to run & maintain network of service providers in different states inIndia. (It’s not that simple to understand but manpower is simple justification) What they do is in turn outsource work to local vendors like GTL etc. This chain of network projects outsourcing continues. So the actual people providing telecom services on ground are different from what you see on daily basis. It’s completely different ballgame.

So many companies in India opened their shops in last decade to operate & maintain this backend network. They secured deals with OEMs et al & running the network. It’s happy time- little competition & good margins.

Does this scenario remain same today? I doubt! If the entire market scenario has changed, then why these companies are still doing the business on same models?

One question to all those who are thinking to fork out their existing services/supplies domain to find more revenue streams- Why do you really want to do it? It’s just revenue concerns or something else. What’s exact motivation?

Typically, I’m always discouraged by thoughts of starting new department or forking into new business, just for sake of money or sake of good potential market. And if you are really thinking about starting something new, then why telecom? Are you bringing something new on table then?

Imagine the scenario. Every year there’re thousands of new cell towers installed in India. Now, if I want to start a company who maintains these towers (provided I have some experience & knowledge of things), is this good idea? Fire the shot at person, who says, even if we get to roll out 1{af589cdba9d77786c8c861317dbad60bba1e2ebbf56e2ffab874a1b59fde9ce3} of cell towers, we will have enough. That’s ridiculous! Where do you want to see yourself in next 5 years? What’s bigger picture? 1{af589cdba9d77786c8c861317dbad60bba1e2ebbf56e2ffab874a1b59fde9ce3} means how many?

Are you talking here about gaining market share of cell tower business? That’s top-down approach. It’s just same way saying,India has population of 1 billion, so even if 1 {af589cdba9d77786c8c861317dbad60bba1e2ebbf56e2ffab874a1b59fde9ce3} of population buy our products, we could thrive. Just see, how many of them are there in industry doing same thing. There’re countless. Is there something new to gain? What’s your value add? It’s not easy to get even 1{af589cdba9d77786c8c861317dbad60bba1e2ebbf56e2ffab874a1b59fde9ce3} these days.

Probably you mightn’t get convinced by my logic. But then there’s nothing to lose too.  The era of telecom copycat service industry model has long gone. If you aren’t trying to bring best to market or if there’s little value add, you won’t go far. And if you want to remain the same you were 5 years back, happy-go-lucky, completely ignorant with changing market dynamics, then there’s little to gain.

Just answer these three questions before you move ahead:

  1. Why are we trying to fork into new services domain? Just for sake of revenue or we are going to deliver the best?
  2. Who else is there in industry & will our offerings be just the same or different?
  3. Why should someone hire our services, given that we don’t value add anything new to existing model?


Tags : EricssonHuaweiNSNTelecom Business in IndiaTelecom IndiaTelecom service IndustryTelecom Services