If you cannot read this message, please click here
 
 
December 10th, 2011, Vol:1
 

Editor's Words

By Sridhar Pai, ceo, Tonse Telecom

December 10, 2011

Indian Telcos need to hurry up and follow the Cloud

Indian telcos expecting to make a successful migration to the land of enterprise and capitalize on the cloud opportunity are likely to encounter competition from a surprising entrant. It will not be the home-grown ISP s who have been offering traditional data services to enterprises for years – of course they will play but that is no surprise. The new kid on the block will be someone thus far known as a book store on the web and as a digital book reader. No prizes for guessing right – it will be Amazon Web services.

Advertisement

What started in 2006 as an infrastructure web services platform in the cloud has today hundreds of thousands of customers using the sprawling cloud infrastructure spreading over 190 countries. From governments to social gaming companies, from digital media houses to tiny Silicon valley up-starts, Amazon has become the defacto IT strategy for everyone. By allowing an out-of-sight infrastructure to offer you compute, storage, application rentals at a few Rupees per hour based on demand, the Cloud has already started changing everything for businesses the world over. And now Amazon is here in India with its Amazon Web Services.

Advertisement

But how should that bother Indian telcos? Simple – Indian telcos are at a painful transition currently growing out of the 'minutes factory' voice business migrating to juicy enterprise high-ARPU data services. While a 26 million strong micro and SME community waiting to get wired into the cyberspace or expand an already existing Internet-presence, this is the next sweet spot for the Indian telecom service providers. These telcos have so far largely limited themselves to providing a range of fat and thin data pipes topped up with basic Enterprise e-Mail, anti-virus packages and for larger multi-country corporations a range of Collaboration suites, international leased bandwidth, data centres and VPN services. With a Cloud infrastructure such as AWS, the entire compute and application infrastructure required to deliver these services moves out of the premise into an overhead cloud, gets amortized over thousands of customers from day one and converts IT capex into Opex – in other words it becomes a pay-as-you-use rental service payable monthly per workstation.

It is said-'when the going gets tough....the tough get going!' But how tough can 'tough' be? For the Indian telecom industry, it is a tough environment galore...Apart from free market competition that built up a staggering 15 odd players where predatory pricing pulled the floor off voice calls – while it seemed that tariffs would stabilize and bring sanity to the sector, the game just got tougher.

The post-scam era, opened up stringent regulatory rules such as caps on imported equipment, domestic sourcing of network gear and an unclear 3G Roaming / ICR practice.... On the Exit policy for current players there appears to be absolutely no clarity on M & A guidelines although a New Telecom Policy was unveiled in Oct 2011. What has made it worse for the immediate present is the possibility of introduction of a one-time spectrum fee for those scenarios or an additional fee to make up for improperly released spectrum in the past.

But the telecom industry has still a long way to go – it has yet to start building up momentum on creating the second revolution: data and broadband. We believe although tethered at this point, the sector will stand upright and launch itself into full orbit again...for now it needs a breather though.

This is what makes the Cloud model hugely attractive to emerging businesses, large corporations and governments. The challenge for Indian telcos appears to be couple of things – one is Speed. There is such a thing as 'time to market'. Of course the large Indian Cloud opportunity will not get captured overnight but between conceptualization, planning, alliances, infrastructure roll-out and service packaging (read Appliction eco-system) one easily consumes about a full year. On the other hand a suite such as AWS – with a full-five year maturity behind it, multiple suites of applications available to suit the needs of an array of enterprises is ready to ship now.

What might be an even greater challenge for Indian telcos is that selling Cloud services may be like nothing like they have done before. Cloud Service is not a Value Added Service and not a wholesale minutes / bandwidth game. Targeted, well-designed enterprise applications need to be packaged and delivered over the Cloud infrastructure to qualified tiers of enterprises and scaled to meet hundreds of paying customers. If done well, this can be a massive sustained opportunity which will cost less for service delivery as scale builds up and bring in more margins with every new customer. At the same time customer pays less than traditional options thus both parties win.

Cloud therefore goes far beyond telecom and can impact basic tenets of a business customer such as impacting his employee productivity, improving customer response times and increasing employee loyalty. Delivering a Ring back tone seems now like a little gimmick in the distant past of an earlier era. This requires a certain level of enterprise customer understanding, bench-marking, service packaging and marketing. If this is not targeted and executed well and early, the cloud opportunity may simply fizzle out into the well trained hands of global cloud service providers.

Sridhar Pai runs Tonse Telecom, a Bengaluru-based telecom research and consulting house that is a research partner to Light Reading India.

 

 
IBM to Acquire DemandTec to Expand Cloud-Based Analytics for Smarter Commerce, Pays More Than SAP and Oracle for Cloud Growth.
IBM to acquire DemandTec in an all cash transaction at a price of $13.20/share, or at a net price of approximately $440 million. After news earlier in December that SAP will buy cloud-player SuccessFactors for $3.4 billion at a 52% premium, In October, Oracle bought Right Now for $1.5 billion at a 19.6% premium, the only profitable company of the three, signaling that tech giants are jumping into cloud deals at increasingly higher prices. read more here & here
Will RIM Make It To 2013?
Before the global financial meltdown, RIM's stock was approaching $150 a share. Like everything else back then it took a dive, but had recovered to the $90 range by mid-2009. It hasn't been anywhere near that price since then. Monday it closed at $17.30, a price the company hasn't been at since early 2004 when it was a fast growing Wall Street darling. read more here & here
Intel, MasterCard, Motorola Mobility Put $18M In Mobile Banking Platform mFoundry
mFoundry, a company that powers mobile banking solutions for more than 500 banks and credit unions nationwide, is announcing a new round of funding, to the tune of $18 million, from MasterCard (which led the investment), Intel Capital, FIS, and Motorola Mobility. This bring's mFoundry's total funding to $40 million. more
Deutsche Telekom: No 'Plan B' in AT&T deal
There's no "Plan B" to a planned sale of Deutsche Telekom AG's T-Mobile USA unit to U.S. giant AT&T Inc, the German company said Thursday as speculation rose the two firms are already looking at alternative ways to cooperate such as a network joint venture. more
Everything Everywhere announced a £1.5 billion network evolution plan
Will see the further integration of the T-Mobile and Orange mobile networks and deployment of "4G-ready" (LTE) technology.The investment will be made over a three-year period, with the company planning "double digit" growth in its 2012 network investment compared to 2011. more
 
For Advertisement or to send us product/ technical release please click here

About Tonse Telecom

Tonse Telecom is a research, consulting and advisory services organization focusing on the India telecom sector. Tonse Telecom enables telecom equipment vendors, ISVs, infrastructure developers and investors for success in the Indian telecom marketplace.

Tonse Telecom has onboard, a team of reputed senior industry executives and consultants who provide advisory services on specific projects. Tonse covers a broad spectrum of telecom technologies that include Wi-Fi /BWA / WiMAX, IMS, FMC and Triple Play, VoIP, Mobile VAS, End-device Applications and Mobile Content.

home  |  wimax eco-system  |  consulting  |  Reports  | case studypress release  |  downloads
©2010 Tonse Telecom. All rights reserved. Read our legal terms and disclaimers.
 
Subscribe Unsubscribe