The Hindu Business Line : Small, medium cos to spend $8b on telecom equipment

Indian small and medium businesses (SMBs) will spend $8.73 billion on telecom equipment and services in 2006, according to a survey conducted by the New York-based Access Markets International (AMI) Partners Inc.

The study states that the expenditure on telecom services account for about 95 per cent of the total investment on telecom by SMBs. It states that as Indian SMBs - with employee strength in the range one-999 - become part of the global economy, interaction with business partners and associates has become imperative for these businesses.

This assumes significance in view of the fact that Indian SMBs prefer a personal touch in their interactions with their business partners. As such, their primary method of interaction with the clients and suppliers/vendors is through telephone calls and in-person visits.

Landlines rule

According to the study, local telephony continues to remain the main driver of telecom spending accounting for 55 per cent of all telecom spending. Despite increased penetration of cellular phones, landlines continue to function as an important business tool. They average 2.21 lines per small business and 20 lines per medium business.

Interestingly, thanks to falling cellular phone tariffs, usage of mobile telephony has been on the rise and is expected to reach saturation point within the next 12 months. Mobile telephony has emerged as an important method of communication, ranking third in SMBs' communication preferences, after fixed telephony and in-person visits.

Customer satisfaction

For them, expenditure on mobile telephony account for one-third of their total telecom services spending. Although, less than one-tenth of medium businesses access the Internet via their mobile devices, this service is expected to grow in the days ahead.

Technology adoption among medium businesses is being driven by the challenges of increased competition and globalisation. Consequently, as customer satisfaction assumes greater importance, medium businesses will increasingly embrace the benefits of mobile telephony in order to be constantly accessible, the AMI Partners study stated.

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