Dial IT For Growth

The impact of globalization led to the liberalization of the Indian economy
and, subsequently, to the near extinction of the license raj. The most visible
impact of this has been on the telecom sector-even a decade back the good old
P&T telephone was the object of all sorts of ridicule and lampooning as the
tele density hovered at less than 1%. Contrast this with 2005: forget landline
telephones, all kinds of sleek mobile handsets are available with a large
section of the people, as the tele density has shot up manifold to over 8%. And,
irrespective of the Indian Left resisting the FDI hike in telecom to 74% as an
anti-poor move, the fact is that this is one revolution that has not left the
lower middle class and even the rural junta untouched.

In fact, this increasing penetration of both mobile and landline phones in
remote rural interiors of the country, is calling for more and more IT usage.
And, with the 74% FDI now cleared by the government, most telecom service
providers would now have the financial muscle power to go for adoption of new
innovative applications. Typically, IT usage by telecos happens in three phases-while
for most Indian players the first phase has already happened, the second is well
on the way and the third has just taken off the ground.

To elucidate, the first phase involves the IT applications required to
support the entire telecom network infrastructure. It was in the late 90s that
telcos like Hutch and Bharti started setting up these infrastructures. Once WLL
was legalized, Reliance changed the entire ball game with a quick fire
installation, followed by the Tatas. As BSNL/MTNL were corporatized, they too
went for massive refurbishing of their telecom network. Though this phase can
never be completely over, at least the initial spurt has now slowed down.

The second phase at its peak now is the adoption of different OSS/BSS
applications by the telcos. Not only that, they are going in for a host of
applications like CRM with BI, data warehousing or even billing applications
that would integrate with the OSS/BSS. With customer base for each telco
assuming significant proportions, not only billing, even applications like churn
management and fraud management among others, are becoming popular.

The third area where IT usage is on the upswing is the maintenance of data
centers for almost every telco. With customer bases gradually reaching a
plateau, most service providers are looking at offering value-added services to
retain customers. To support multiple such functions, most service providers
like Reliance or Tatas have impressive data centers, which are basically run
through IT only.

One interesting event in 2004 was Bharti outsourcing nearly all its IT
requirements to IBM. It had already outsourced its network maintenance to
Ericsson-in effect then, Bharti is today just a sales and marketing company.
While other telcos are yet to follow this trend, watch out for further
developments on these lines.