SAS India, a business analytical software and services company, is now looking at the telecom vertical in a big way. With rising competition in the telecom sphere due to the impending mobile number portability and lower tariffs, service providers are looking to edge out competitors. Business analytics (BA) and business intelligence (BI) is not a new vertical for the company. However, it has gained prominence over the past few months. Sudipta K Sen, regional director, South-East Asia, CEO & MD, SAS India, told Nikita Upadhyay about the challenges in the telecom industry, managing churn and the growing relevance of BA and BI in the telecom industry. Excerpts:
BA and BI in the telecom industry is nothing new. What according to you is driving its relevance and attracting telcos to go for it?
As per the IDC, BA and BI in India had a market size of worth $120 million in 2009, which by 2012 will grow to $260 million. All around the world, communications service providers are investing billions to deliver converged services. Telecom has become a fiercely competitive field with around 10-13 players jostling for the dominant market share. Sustainable competitive advantage can only be achieved through the operator’s ability to consistently attract and retain profitable customers and managing customer experience by delivering quality of service. Building customer profiles and then using this information to make smarter decisions at every customer touch point is the only way to minimise churn while maximising profits. It is also the only way to make the right offers at the right time, through the right channel and BA and BI delivers all that is needed to do so.
How big is the telecom vertical for you in terms of revenues?
We have a market share of around 51% in India. Telecom sector today contributes almost 20-25% of our revenues, which is set to experience further growth in the coming years. BFSI and government continues to be the topmost vertical for us, but telecom has, over a period of two years, emerged as the second-largest vertical for SAS India. We have developed some of the targeted products for the Indian telecom sector in our R&D centre at Pune. Telecommunications will undergo a major change within the next two to five years. In all probability, the business model will move from voice connectivity to virtually every aspect of communications you can imagine. Customer intelligence will enable telcos to thrive by focusing their resources on gaining and retaining the customers they really want.
How many telecom operators do you have as clients? Are operators entering the field equally interested in BA and BI?
We currently have the biggest telecom company in India as our client. Apart from that, we have Reliance Communications, Vodafone Essar and Tata Docomo as our clients. For the recent market entrants, life can be even tougher. They lack the financial stability of the incumbents, and they themselves are vulnerable to even newer, sleeker market entrants. However, these new entrants are embracing business intelligence solutions right from their inception. We are in talks with two other new entrants and will close the deal sometime soon.
After mobile number portability and 3G, how would the customer specific information gain priority?
For an operator, the acquisition cost per subscriber is almost six times the average revenue per user (ARPU). It is now routinely assumed that after MNP many customers will be tempted to move from one operator to the next, looking for the best possible deal or quality of service. Customer intelligence has revealed that customers tend to change their behavior just before they decide to switch to a competitor.