Enterprise is telecoms new buzz

Written by Vrishti Beniwal | New Delhi, Dec 25 | Updated: Dec 26 2007, 06:07am hrs
As the average revenue per user is constantly falling in the mobile retail segment, telecom companies are scouting for alternate cash flows to improve bottom lines. All top mobile service operators like Bharti Airtel, Reliance Communications, and Tata Teleservices (TTSL) are targeting the enterprise segment that requires developing communication packages for businesses.

The annual revenue from the enterprise segment is about Rs 33,000 crore, while the size of the telecom market is about Rs 1,00,000 crore. The enterprise segment adds the most to Ebitda (earnings before interest, tax, depreciation and amortisation) of a company.

The average revenue per client in enterprise is about 3-4 times retails. Bharti Airtel, the leader in enterprise, gets about 24% of its revenue from segment services. In the last 3 years, the segment has grown 100%. It is expected to be highly profitable for another three years. Vodafone Essar has a strong hold in Mumbai and Bharti Airtel and Rcom have together captured more than 50% of the national market, said Romal Shetty, executive director, KPMG.

Banking, insurance; information technology; manufacturing; realty, infrastructure; organised retail, and media and entertainment are driving growth in the segment.

Beginning from zero, TTSL is targeting to be the leading player in the segment over the next two years with a 25-27% market share.

The way the market is growing, it seems the sky is the limit. The rapidly falling prices in retail are prompting telecom service providers to look at this segment, said Debashis Sur, head of TTSLs enterprise business.