Telecom and technology, which had set out as two different industries, have seen their paths converge multiple times in the past decade, especially in the last few years. Advancements in technology have been a key factor in driving this convergence. The rise of digital technologies, particularly cloud, data and connected technologies, has brought the two industries closer than ever before. Telcos are forming partnerships and collaborating with tech players and IT majors to bring a consolidated package of connectivity and technology to their enterprise customers. They are looking to serve as orchestrators, or integration points, of the ecosystem of connectivity, platforms, hardware and services, especially with their traditional sources of revenues drying up.
Recently, Vodafone Idea (Vi) announced its plans to transform itself from a telco to a techco, and has been working on strengthening its portfolio of offerings for enterprises. Bharti Airtel too has strengthened its enterprise offerings beyond communications and cloud services to provide security and customer service solutions through various partnerships. Meanwhile, Jio, since its entry into the sector, has maintained that it sees itself as a tech ecosystem player. Given its recent strategic partnerships with global tech giants such as Microsoft, Facebook, Google, Qualcomm and Intel, the telco has made clear headway in this direction.
Telcos currently have a strong portfolio of offerings, with over 50 key services in the realm of connectivity, digital, analytics, security solutions, cloud, XaaS, IT/ITeS, IoT, blockchain, Industry 4.0, payments, augmented reality/virtual reality, etc. In terms of revenues, these products contribute 15-20 per cent of overall telco revenues. Covid-19 has, of course, dramatically expedited the demand for such solutions as enterprises embark on a swift digital transformation and retail customers seek enterprise grade solutions at home. Analysys Mason, in its annual telecom, media and technology predictions for 2021 has stated that Covid has brought market opportunities at the intersection of cloud and connectivity into clear view, and telcos will strive to compete and launch cloud-based solutions combining unified communications, security and remote access.
There are currently a host of technology solutions that telcos are looking to leverage for the business-to-business market. A look at some of these…
Cloud-enabled collaborative solutions are emerging as a key offering in telcos’ portfolios. In mid-2020, Airtel teamed up with Amazon Web Services (AWS) to provide a wider suite of cloud services to its enterprise customers in India. Earlier, in 2019, Jio had announced its strategic collaboration with Microsoft that had the Microsoft Azure cloud platform at the heart of it.
The cloud market has witnessed significant demand acceleration, driven by the coronavirus-induced remote working phenomenon. And telcos have been making concerted efforts to capture a share of this growing market. As per Airtel’s internal estimates, the Indian cloud communications market size is worth $1 billion, growing at about 20 per cent annually.
For a bigger play in the market, Airtel has recently launched Airtel IQ, a cloud-based omnichannel communications platform. It enables enterprises to deepen their engagement with customers through timely and secure communications. With a slice of code, the platform allows businesses to embed communication services such as voice, SMS and IVR in their applications and digital properties across desktops and mobiles through a unified platform. Swiggy, Urban Company, Justdial, Rapido and Havells are some of its initial customers. Airtel has also signed a multi-year strategic collaboration agreement with AWS to offer a comprehensive set of cloud solutions to enterprise customers. Meanwhile, Vi has signed strategic partnerships with co-location, internet-as-a-service (IaaS) and software-as-a-service (SaaS) providers. Further, it is co-creating differentiated offerings with partners such as Google, Microsoft, AWS and CtrlS.
Cybersecurity has always been an area of concern for enterprises and is seen as a major roadblock in their digital transformation journey. India currently ranks at fifth position globally when it comes to incidents of cyberattacks and frauds. Moreover, in the wake of the Covid-19 pandemic, cyberthreat actors have become more active and aggressive.
Telcos, which are now offering solutions such as cloud and digital platforms, are best suited to provide security solutions bundled with other tech services to their enterprise clients. In fact, as per the Data Security Council of India, the Indian cybersecurity market is expected to cross $13 billion by 2025.
Taking this cue, Vi Business, the enterprise arm of Vodafone Idea, recently collaborated with Fortinet to launch a managed security service (MSS) that delivers firewalls with security features. The solution protects the enterprise network by providing the first line of defence in the event of a cyberattack. According to Anil Philip, executive vice-president, products, solutions and partnerships, Vi, “The MSS includes both network-based firewalling with intrusion protection detection features and secure remote user access to enable remote workers to connect to their corporate network safely and securely through a VPN.”
Bharti Airtel has, meanwhile, launched Airtel Secure, a suite of advanced cybersecurity solutions for business customers. According to Gopal Vittal, managing director and chief executive officer (CEO), India and South Asia, Bharti Airtel, the solution combines Airtel’s robust network security with cutting-edge solutions administered through global partnerships in order to deliver end-to-end managed security services. As part of Airtel Secure, the company has also launched a state-of-the-art security intelligence centre in the National Capital Region. Further, Airtel has entered into strategic MSS partnerships with global leaders such as Cisco, Radware, VMWare, and Forcepoint to offer a range of solutions, from end-point protection and email protection to cloud distributed denial-of-service protection. According to the company, Airtel Secure is now available to over 1 million business customers, including Flipkart, Havells, Fidelity India and R-Systems.
Telcos can easily upsell IoT products as they already provide broadband and mobile connectivity to homes and offices. To this end, they would need to seamlessly orchestrate an ecosystem of partners.
Bharti Airtel, for one, has been adopting an applications- and partner-based approach to grow its IoT business in India. The telco notes that it a good time for India to build its IoT ecosystem, and it is focusing on enabling connectivity, building applications and providing a platform for developers to build new use cases. It has been building its IoT ecosystem for the past three years and has been onboarding partners to develop applications using the IoT platform.
Meanwhile, Vi also believes that it is well positioned to capitalise on the growth in the enterprise IoT space. The telco was an early mover in the IoT automotive space in India. It currently has a 90 per cent customer market share in the automotive industry and is the only embedded universal integrated circuit card SIM supplier to over 2 million vehicles in India. Vi believes that the telco IoT connectivity space will grow ten times in the future.
Narrowband IoT (NB-IoT) is also emerging as a key point of interest amongst telcos. Strategy Analytics predicts that by 2022, telcos will be generating more than $13 billion from NB-IoT connectivity, as well as significant revenues from value-added services such as data analytics and security. Airtel has been investing in developing the NB-IoT ecosystem in the country. Earlier, Jio claimed that it expects to reach at least 1 billion connected IoT devices through its platform by 2022. Vi has also rolled out commercial NB-IoT proofs of concept (PoCs) in select cities. Most recently, Bharat Sanchar Nigam Limited (BSNL), in partnership with Skylo Technologies India, announced a satellite-based NB-IoT solution. The indigenously developed solution by Skylo will connect with BSNL’s satellite ground infrastructure and provide pan-Indian coverage. As per Vivek Banzal, director, customer fixed line access, BSNL, “Successful PoCs have already been conducted by BSNL and Skylo and we will approach various user groups in 2021.”
Enterprises are keen to transform their network environment from traditional WAN architectures to SD-WAN with multi-cloud. With appropriate partnerships, telcos can tap this opportunity, given their strength in connectivity. In April 2019, Airtel joined hands with Cisco to offer managed SD-WAN services, including real-time analytics and inbuilt security. In November 2019, Vi’s enterprise arm collaborated with Nokia to roll out SD-WAN services for start-ups and enterprises.
Evolving through partnerships
As businesses embrace digitalisation, telecom operators and IT companies will have to work even more closely to develop the required technical infrastructure. Telcos have already realised that not every product and expertise needs to be developed in-house or from ground up. To this end, the industry has witnessed several key collaborations among technology solution providers, system integrators and telcos to offer converged products and services to customers. According to industry experts, telcos are following a partnership-led approach, wherein the effort is to build a “sell to”, “sell with” and “sell through” model in which telcos can co-create with their partners.
In an industry webinar, Ashish Arora, CEO, enterprise business, Airtel Business, stated that telcos are exploring three types of partnerships to stay relevant. These are go-to-market partnerships, which are synergistic in nature; partnerships for service creation to offer new services in areas such as cloud and security that are completely integrated with the telco’s network layer and billing engines; and collaboration for acquiring specialist capabilities in areas such as IoT and virtualisation.
Focusing on the right product mix
Determining the right set of solutions to be bundled along with their traditional offerings will help telcos achieve a competitive edge. Telcos enjoy long-term relationships with enterprise customers, which allows them to sell additional services complementary to their traditional connectivity services. According to a research study by Openet, 73 per cent of consumers are open to purchasing additional digital services from the telco they are subscribed to rather than going to multiple players.
Telcos, thus, can focus on providing unique bundled services over and above mobile and fixed communication services, including cloud computing and storage, IoT and SD-WAN. These solutions are a step towards engaging even more deeply with customers and helping them accelerate their digital transformation journeys.
Analysys Mason pertinently notes that IT services are doing much better than connectivity during the Covid pandemic, and this is likely to be the case in the post-Covid world as well. For some operators across the globe, IT revenues account for almost 50 per cent of their enterprise revenues. The picture is not very different for Indian telcos. In fact, the consultancy firm believes that cybersecurity, in particular, will grow in importance for enterprises and telcos will see a huge demand for such solutions.
Of course, sensing the pulse of enterprises and SMBs, and understanding their tech requirements will be crucial for telcos in establishing such customer engagements. To this end, in an unprecedented move, Airtel Business, the enterprise arm of Airtel, has established a customer advisory board to co-create its product innovation roadmap. The idea is to make its enterprise customers equal stakeholders in its product development journey. The board will have representation from Airtel’s top enterprise customers, cutting across a diverse set of industries/sectors. The board will meet at regular intervals to deliberate and offer counsel on customer issues and emerging technology trends in order to help Airtel Business align its innovation road map to the strategic requirements of its customers and create the right solutions for the market.
Telecom, as we know it, is slowly becoming a thing of past. The rise of digital services has radically changed how customers – retail as well as enterprise – consume services. While reliable, high quality broadband connectivity will continue to be the foundation of a telco’s business, it will be areas such as the cloud, security and 5G that will fetch it higher revenues and ensure future business growth.
As the world becomes more digitalised, telcos are finding themselves at the nerve centre of the digital play, with most services being built around their infrastructure. They must, therefore, evolve to leverage this opportunity. Adding value on top of connectivity offerings will help them stay relevant in the ever-changing networking landscape. They will, of course, have to rely on collaboration and cooperation with multiple partners to provide the relevant suite of solutions that will determine their success in the future.
By Akanksha Mahajan Marwah