Logistics cos hope to grab a bite of telecom sector pie

Written by Nikita Upadhyay | Nikita Upadhyay | Mumbai | Updated: Mar 15 2011, 03:27am hrs
Logistics companies in India are beefing themselves up to grab upcoming opportunities in the Indian telecom space. As the technology evolves from 2G to 3G and later to 4G, logistics companies are gearing themselves up to manage high inventory build-up, reverse logistics and training manpower for the telecom sector. Logistics cost for us is almost 13-17% of our total expenditure. Logistics companies are still not skilled enough to handle transportation of high end and sophisticated devices. There is a need for automation which can bring down our logistics cost to 8-12%, Soumyadipta Datta, manager, contracts & commercial, Tata Teleservices, said . While urban circles have reached saturation and telcos go rural, telecom is becoming a key vertical for these players. Shasikant Garg of Nokia Siemens Networks feels that the logistics companies must look at better order management by reducing man dependency. Rural telephony is the next big driver in the logistics space and logistics companies must look at this space in a modernised and sophisticated manner, he added. Telcos earlier used to have their internal logistics department. However, due to competition and to ensure cost advantage, outsourcing to other specialised logistics players has become essential. Telecom logistics comprises 4-5% of the total logistics pie in the country, which is almost 13% of India's GDP.

More than telcom companies, it's the tower infrastructure companies who generate revenues for logistics companies in this market. Mostly, telecom equipment providing companies manage logistics for the telecom operators. Right logistics for us is that which understands current effects and future requirements. It is critical once it comes to upgradation of network infrastructure, electronics, servers and operating systems, workstations, applications and network management. We have done about 20,000 upgrades for 3G in the past 2-3 months, said SK Balasubramaniam, chief supply chain officer, Indus Towers.