Telecom services provider Bharti Airtel and Cisco, which specialises in network solutions, on Tuesday announced a strategic alliance, targeting the small and medium enterprises (SME) sector.
Announcing the deal, Bharti Airtel CEO and Joint Managing Director Manoj Kohli said his company “seeks to build on the success we have achieved in the B2C (business to consumer) by focussing on the B2B (business to business) segment, particularly on SMEs.”
Mr. Kohli said the potential size of the market was about $4 billion, of which Bharti Airtel “hopes to gain a sizable market share.” He pointed out that the SME sector, which had grown at the rate of 16 per cent in the last couple of years, offered significant scope. At present income from enterprises accounted for about 20-22 per cent of Airtel’s overall revenues.
Speaking on the occasion, Cisco Services Chief Globalisation Officer and Executive Vice-President Wim Elfrink said the “demographic transition” in India, reflected in the increasing level of urbanisation, would offer enormous scope for businesses. He said smaller enterprises would seek to “reduce costs and increase speed and efficiencies.” The number of broadband connections was likely to increase from about 70 million to about 500 million in the next five years. This would enable smaller businesses to become more efficient, he added.
Although representatives of both companies refused to spell out the nature of the financial arrangements between them, they said a joint team, under the leadership of Sanjay Mittal, had been constituted to operationalise delivery of services. Airtel announced that managed data services would commence in October and scaled up within a year. The team would be headed by Bharti Airtel Senior Vice President Sanjay Mittal.
On the spate of tariff cuts offered by rivals in the telecom industry, Mr. Kohli said Airtel would not be drawn into a tariff war. The company would pursue its own strategy, which was not merely “tariff-based”. Airtel hoped to increase its subscriber base from 110 million to 200 million in three years, he said.