MSMEs will Play a Key Role for Future Growth: Telecos

MSMEs will Play a Key Role for Future Growth: Telecos

India’s top telcos Reliance Jio, Bharti Airtel, Vodafone Idea (Vi) along with the likes of Tata Teleservices are focussing on the medium and small-scale enterprises (MSME) as these businesses get digitised and become better revenue options than the larger established corporates with fixed network service providers.

India’s largest telco Jio, in its just released annual report for FY20-21, called MSMEs the bedrock of Indian economy which lack access to integrated digital services and the know-how to adopt.

“JioBusiness is bridging this gap by providing enterprise-grade voice and data services, digital solutions and devices to small businesses which would make them efficient, competitive…,” said the company in the report.

This is no surprise to analysts who estimate that with stability in the mobile customer segment, stickiness amongst the large corporates, the MSME segment remains untapped and will be the revenue generator post the pandemic.

“There are about 20 million small and medium businesses or what we call kirana stores in the retail segment. They are now largely fragmented but post Covid, are trying to digitise and this is where telcos can woo them with their cloud based enterprise solutions,” says Rohan Dhamija, partner and head of India and the Middle East at Analysys Mason.

There are about 58 million MSMEs in India, a segment which contributes around 30% of India’s GDP and 40% of exports.

Jio’s biggest rival Airtel too is targeting the MSME space while offering B2B solutions for its enterprise customers. Airtel has partnered with National Small Industries Corporation (NSIC) to provide MSMEs with solutions like corporate mobile plan bundles, cloud solutions, network security, toll free calling amongst others.

Right now, about 10% of a telco’s revenue comes from the enterprise segment and analysts estimate it to grow to 20%-30% in the next couple of years. Most of this growth will come from the MSME sector, say analysts.