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Broadband Spend Down in 2009

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VoicenData Bureau
New Update

The economic recession had a deep impact on IT spending of

enterprises in the country. As per V&D-IDC Enterprise Broadband Satisfaction

Survey 2009, the average spend of enterprises on broadband services has gone

down to Rs 21.60 lakh. Last year, as per the 2008 survey, the average spend on

broadband was Rs 22.81 lakh. The fall can be attributed to enterprises, across

all verticals, taking cost-cutting measures. Some even going to the extent of

reducing the number of working hours or implementing strict working hours.

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The maximum impact could be seen in ITeS and IT companies,

though their average spend was maximum among all verticals, this year as well.

The average spend of ITeS enterprise was Rs 23.81 lakh. The fall was recorded in

all verticals. The manufacturing vertical had an average spend of Rs 10.93 lakh

in 2009 (around Rs 2.5 lakh less than last year) and it recorded the lowest

among all verticals.

More than half of the enterprises, 56%, had a bandwidth

consumption of 2-4 Mbps. The highest bandwidth consumption was seen in the BFSI

vertical. As many as 30% of the BFSI enterprises have 8 Mbps or more bandwidth

consumption. It is followed by the IT sector. The minimum consumption was

recorded in the manufacturing vertical.

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3G and WiMax



The survey has a bad news for service providers who are banking on 3G and

WiMax for the coming year. As per the survey, future of WiMax and 3G is bleak

for the next two years, as enterprises are going slow in the adoption of these

technologies. It may be recalled that the government will auction 3G and WiMax

spectrum in January next year. The base price for 3G spectrum is Rs 3,500 crore

while for WiMax it is Rs 1,750 crore. Industry people believe that prices are

very high.

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Of the 146 enterprises surveyed in the study, 89% have no

definite plans to deploy WiMax is the next two years, at least. Service

providers' hopes lie with IT/ITeS vertical only. As many as 25% of the IT/ITeS

enterprises are looking forward to the adoption of WiMax in the next two years.

The study found that enterprises are showing a lack of

interest in technology, as 48% (of the total number of enterprise have not

adopted WiMax) and have no demand for large bandwidth. While 36% are not

contemplating the idea as WiMax requires heavy investment. 17% of the

organizations lack WiMax enabled devices/products.

Similarly, 92% of the enterprises have no intention for

deployment of 3G in the next two years. Only 2% have plans to go for 3G services

in the next one year. The worst is with the retail segment, with no plans for

the next two years. The 3G services have a little hope with manufacturing, BFSI,

and IT sector enterprises as 10% of the enterprises in each vertical are

contemplating adoption.

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Even the present picture for these technologies is not

bright. Only 9% of the enterprises surveyed have deployed WiMax. The maximum is

ITeS enterprises with 16% adoption, followed by 10% in retail. BFSI is the worst

with 3% adoption of WiMax. The adoption of 3G among the enterprises is as low as

47%. Enterprises in the manufacturing segment led with 14% adoption. While

verticals like ITeS and retail have not adopted any 3G technology.

Satisfaction @ Service Provider



Tata Communications as per the survey, topped not only in the overall
satisfaction but also across all parameters. The company scored 93.9 out of 100.

It is closely followed by its two competitors-Bharti Airtel and Reliance

Communications. Bharti Airtel scored 92, while Reliance Communications scored

92.3 BSNL was ranked the lowest among all the competitors with 83.7 points. MTNL,

on the other hand, bagged 91.1 points.

The enterprises were adjudged on four parameters including

maintenance support, customer care and billing (weightage of 29.1%);

implementation stage (21.6%); pre-implementation stage (23.5%); and network

quality and QoS (25.8%).

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When asked which service provider accounts for the maximum

portion on broadband services spend, the answer came as Tata Communications and

Bharti Airtel. Each was the choice of 21% enterprises surveyed. Similarly both

Reliance Communications and BSNL, were preferred by 18% of the enterprises. MTNL

was the choice of 19% while the rest of the 3% went to others such as Idea, Sify,

etc.

The choice makers give topmost preference for the ability

to take end-to-end responsibility, when it comes to selection of broadband

services provider. It is followed by network robustness, reliability and

redundancy, total ownership cost/price and understanding of business

connectivity needs. Last but not the least, is the commitment of SLAs.

Overall, ability to take end-to-end responsibility is the

most important criteria for an enterprise to select a service provider. This is

followed by network robustness, reliability and redundancy, and total cost of

ownership. Besides, understanding of an enterprise business and SLAs committed

are other factors which play a critical role in an enterprise's decision to go

in for a particular service provider. For MTNL's customers also, taking

end-to-end responsibility is the main criteria. Airtel's customers have opted

for it because of network robustness, Reliance enterprise customers believe that

the total cost of ownership is the prime criteria for opting for it. The same is

true for Tata Communications. For BSNL customers, network robustness is the

prime factor behind its selection.

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Buying Behavior



Most of the time the decision regarding IT services and infrastructure is

centralized at the headquarters. Decision on IT and broadband services is

centralized in 70% of the organizations.

CTOs, CIOs, and IT heads are the primary decision makers

in 56% of the enterprises, while in 36% it is the director/CEO and COO. While 4%

of the enterprises still rely on IT department staff, the rest of the 4% have

committee, operation heads, etc.

Though the IT division staff have a little say in the

decision-making process, they have a great influence on broadband services

(74%), followed by CTO/CIO/IT head. CFO and VP finance have 14% influence, while

MD/CEO/COO have 7% influence. External consultants have 3% influence on

broadband services.

The new year would be good for the service providers, as

the recovery has already started. The economy is showing healthy signs. The

consumption is increasing and the auction of 3G and WiMax spectrum will also

give the industry some boost.

Akhilesh Shukla



akhileshs@cybermedia.co.in

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