Convergence Plus Journal

Mr. Debdeep Sengupta, Vice President – Enterprise Sales, SAP India

With industry expertise of more than 30 years, SAP is catering to various industries with its wide range of product offerings, with key contributions towards the telecommunications industry as well.

SAP is serving as the enterprise back bone for telecom operators in India. SAP helps enterprises by providing end-to-end solution that integrates their entire business on a coherent platform, streamlining existing operations and also introduces efficient, future-proof e-business functionality.

Convergence Plus Spoke with Mr. Debdeep Sengupta, Vice President – Enterprise Sales, SAP India regarding the trends and challenges faced by the telecom sector. Few excerpts…

1. Give a brief overview of the Telecommunications market in India and what are the growth opportunities and market potential in India?

The Indian telecom market has gained recognition as one of the most lucrative markets globally. The industry witnessed consistent growth during the last year, with the successful conclusion of the 3G and BWA auctions, roll-out of 3G services across major towns and cities and an increased operator focus on mobile internet VAS. According to TRAI the number of telephone subscribers in the country reached 806.13 million at the end of January 2011 from 787.28 million in December 2010, thereby registering a growth rate of 2.39%. The wireless subscriber base has increased to 771.18 million at the end of January 2011 from 752.19 million in December 2010, registering a growth of 2.52%.

With an ever growing customer base, the sector will witness up to US$ 55.95 billion investments and the market will cross the US$ 100 billion mark in 5 years (BCG study).

According to “India Telecom 2010” report by KPMG published in Dec 2010, the VAS market is worth INR 110-120 billion, which translates into approximately 10 percent of wireless industry revenues. The share of VAS in wireless revenue is likely to increase to 12-13 percent by 20118. This growth would be driven by increased operator focus on VAS due to continuous fall in voice tariffs, increasing penetration of feature rich handsets, availability of vernacular content and increased user adoption of VAS applications.

We foresee tremendous opportunities in this sector. According to McKinsey Quarterly (Feb 2011), India could become the world’s first truly mobile digital society. With the arrival of 3G, various operators in India are particular about providing faster and more robust Internet, better access of data services including e-commerce, social networking, audio-video conferencing, and many other broadband applications at high speed. The deployment of 3G services is likely to help the emergence of new VAS and the demand for VAS is likely to surge as ‘Gen Y’ are more inclined to use Smartphones and adopt VAS services.

2. What is the road ahead for Telecommunications in India in 2011?

With the urban teledensity crossing 100 percent, the market has been showing signs of maturity, especially in case of the uptake of voice-based services. The aggressive growth observed by mobile services is yet to be replicated in case of broadband services, the broadband sector can expect tremendous growth in the future, considering that there are more than 650 million potential customers waiting to be tapped.

The successfully concluded auction of the BWA and 3G spectrum will enhance the wireless broadband penetration across the country and help connect the remotest locations across India. Also, VAS is expected to be the next growth driver for telecom companies. The mobile entertainment industry in India is also witnessing significant growth and a latest research forecasts this market to reach $4.9 billion in 2015 from $1.2 billion in 2009, growing at a CAGR of 26% in the period 2009-2015. The next wave of growth for the telecom sector is going to come out of mobilizing enterprise applications.

3. Outline SAP’s increasing footprints in the Telecommunications market in India?

SAP is serving as the enterprise back bone for telecom operators in India. In last couple of years, we have seen an increased adoption of SAP in core Business support systems (BSS) areas. In addition, SAP recently announced its entry in core Operations Support Systems (OSS) area with the launch of “SAP Billing for Telecommunication”, and SAP is primarily positioning this solution for VAS sector in India. With significant projected growth for mobile entertainment industry, content monetizing and partner settlement will be the focus for SAP going forward. With SYBASE acquisition by SAP, Enterprise Mobility is a key differentiator for SAP in telecommunications industry along with Business Analytics which is another key differentiator for SAP in telecommunications.

4. How does SAP’s solutions for Telecommunications catering to the need of enterprises? Will it also serve the SMEs and How?

SAP Mobility solutions allows enterprises to connect business processes to mobile workers on any type of devices. SAP not only provides applications like “Sybase Mobile Workflow for Business Suite” to allow mobile workers to carry out workflow transactions, but also provides a framework that allows enterprise developers to create their own mobile applications for enterprise. Mobility Solutions from SAP allows companies to manage and secure the entire device lifecycle from provisioning to production to de-commissioning. Enterprise Mobility as a service by telecom operators in partnership with SAP would be an opportunity for SMEs to enable mobile access to their SAP environment.