Transcending Differences

VoicenData Bureau
New Update

Today connectivity services are much more than just

providing network connectivity. They have now evolved as the lifeline for

running an enterprises' IT services. The enterprises are investing in service

providers who have an evolved service capability to minimize duplication costs,

increase efficiency and not look at merely technical specifications. The need of

the hour is to view the picture with a long term partnership model, like in any

IT services outsourcing case.


The pure connectivity services market in India is close to

$4 bn including both domestic as well as global requirements across a variety of

technologies. Industry experts expect the connectivity business growth in

corporate VPN and corporate Internet services will add to around Rs 1,500 crore,

and is expected to grow by 20% in terms of revenue. Corporate point to point

bandwidth and international bandwidth services will be another Rs 2,000 crore

and will grow at around 15% in revenue terms.

Expert Panel

Mridul Srivastava, marketing director, BT India

Abhijit Barua, head of strategy and connectivity business, Sify

Vijay Yadav, managing director, UTStarcom


The key trend that will play a pivotal role in defining the trajectory of

connectivity services is the convergence of services with voice, video and data

on one connection, irrespective of the device.


Higher and a faster adoption of fiber and a demand for

more bandwidth as video traffic continues to grow would bring the need for

technologies which are capable of 10 GB at the core level .

Simplicity will create a demand for the Passive Optical

Network (PON). Then, the demand for 1 GB or 10 GB with simplicity and PON would

result into Gigabit Ethernet Passive Optical Network (GEPON). So GEPON, IPTV

would clearly be the next trend in wireline.

Besides, as far as mobility goes, the industry would

continue to see a demand for more and more bandwidth.


The year gone by was the key to several learnings by

players in the connectivity services space. One impact of the global recession

has been a timely revision of the role mobile working-and the technology that

enables it-can play in organizations that are striving for sustainability while

seeking to drive down costs. CIOs have to reconsider the mobility imperative,

and to present a fresh and coherent case as to how mobile their enterprise needs

to be.

Connectivity requirements in the rural areas is likely to

come up in India in a big way. For enterprise connectivity, rural areas would

need to ride on top of consumer mobility. Remote access services which will

enable end users to access their end user services from anywhere, anytime and

that includes rural areas, is one area to watch out for. The Government of India

has some ambitious initiatives to provide rural Internet access, however most of

these these services will evolve more from the Internet café perspective and not

from the device side.

Tech Focus

Key technologies which will fuel the growth of the pure connectivity

services will be virtualization, cloud computing and remote infrastructure

services. The first two are relatively new to the Indian landscape and will

begin to see adoption by the core technology companies who will be the early

adopters. They will blur the difference between IT and telecom services, and

further commoditize these elements. Bandwidth demands will go up as services

will proliferate across the market segments. Most importantly, the blur between

consumer and enterprise will increase significantly as technologies will enable

the end user to access services from anywhere.

Tips For CIOs

  • Complete alignment with enterprise's business is the key to identify

    and select the best solution. Scalability, flexibility, future growth,

    simplicity should be given greater importance than price
  • A solution which probably looks best on paper may not be effective if

    not delivered in time and managed for life
  • Understanding and managing customers' expectations is the mantra to

  • Effectiveness, performance SLAs, timeliness of delivery and support

    are critical for client satisfaction

The core technology focus for some connectivity service

providers will be MPLS network to offer VPN and core connectivity services,

hosted services platform to provide hosted contact center services. A major

focus will be on technologies which will enable converged service delivery,

reduce duplication, and thus costs; and enable the service providers to serve

the end user demands and remove blind spots in their target segments.

MPLS - VPN will continue to grow, and the penetration will

increase not only in global connectivity requirements but also for domestic.

According to Gartner, the market for VPN services will grow at a CAGR of 24%.

Ethernet services is another area of high growth and this market is likely to

grow at 25% y-o-y.


While some of the connectivity services will grow faster

like VPN, Ethernet or Internet access; the others, including frame relay, leased

line and ATM will see a decline.

The demand is increasing from various industry verticals,

and it provides a diversified growth. There is a higher acceptance of VSATs as a

broadband access medium by a much larger addressable market of SMEs that will

provide an additional growth compared to the traditional enterprise and

government segments.

Satellite bandwidth availability for VSAT has always

raised concerns for enterprises. Other regulatory constraints keep from

exploiting the benefits of VoIP to the fullest. Tough terrains and terrestrial

infrastructure are yet another challenge for this segment. VSATs continue to be

the preferred media for SCADA type applications that need relatively smaller

bandwidth to operate.


Demanding Enterprises

The customer requirements and expectations are changing, largely

driven by the change in the overall business environment. The complexities in

business processes are making it inevitable for the enterprises to re-strategize

on the connectivity services end. Also need for stricter security and compliance

is an important part of the service package. Financial attractiveness is no

longer the only deciding factor. However in the pure connectivity services

space, it still remains the dominant factor. Enterprises are looking at fast,

reliable and more importantly cost effective connectivity services. They are

looking at connectivity solution which is scalable and flexible, and should be

able to adapt to the customer's changing requirements.

Growth Stimulus

The Indian IT is exciting. Globalization, outsourcing and out tasking

are primarily driving the growth of this segment in the countries. Indian

companies are going global, the country is seeing a trend of outward FDI.

Interestingly, this growth is no longer limited to IT/ITeS companies; but

several pharmaceutical, manufacturing and auto companies have gone global. IT

adoption specifically in the SMB segment is on an upswing. Also, the government

is spending on e-governance and several other e-initiatives.


Wireless spectrum is one of the visible ones. Most of the players

complain that the bidding rules are not beneficial for the Indian end user. The

service providers feel a lack of government initiative in the next generation

networks is the key obstacle. NGN should be treated as a national infrastructure

like roadways, railways and airports, else service providers will always use it

to compete unfairly and overcharge the customer. And with so many mature telecom

regulatory models available across the globe, the country need not make the

Indian telecom regulations so complicated. India is known as more lobby driven.

A critical challenge in the rural market is the low ARPU, as right now voice is

the only solution which has been delivered in a cost effective manner. Once the

service providers win over the challenge to deliver video in a cost effective

manner, the ARPU from rural areas is bound to increase as the data relevance

there is relatively lower.


Green Agents

The recession has taught business heads that businesses can strive

for and achieve a lower carbon footprint and a lower cost base, without the

weakening of security or productivity. While global attitudes towards the

environment will remain vigilant in 2010 and beyond, CIOs will need to prove

both financial and sustainability returns on any investment in mobility

technology. The ability to cut carbon emissions will be valued only if it is

balanced by an ability to cut costs.

As the world emerges from the recession, it is important

that the industry keeps its focus on positive ideas such as these, and pursue

all the ways in which technology can support the fight to tackle and adapt to

the climate change.

Readily available, proven mobility technologies such as

secure remote access and video conferencing do work as a way to cut costs, as

businesses that have been forced to take the mobility plunge have found. It is

proven to have a beneficial environmental side effect.

Heena Jhingan