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Sunday, August 13, 2017

Telco consolidation will open opportunities, says IBM
NEW DELHI: Technology major International Business Machines Corp (IBM) has said the ongoing consolidation among India’s telcos will open up new opportunities for the company, and it is in talks with them to help the carriers through the transition.

The US-based company works with all big telecom service providers, including Bharti Airtel, Vodafone and Idea Cellular in India. India’s top two telcos—Airtel and Vodafone—have already renewed their respective outsourcing contracts with IBM, while Idea Cellular’s contract will come up for renewal in 2019-20.

The proposed Vodafone India-Idea Cellular and Reliance Commnications-Aircel-MTS mergers, however, are expected to shrink the revenue pie for IT vendors, including IBM, analysts say.

But IBM is still upbeat, especially as telcos look for new revenue streams. “We touch almost half of the telecom subscriber base in the country through large telco contracts that we have. Our customers will merge, and not the number of subscribers in India as the size increases,” Karan Bajwa, regional general manager at IBM India-South Asia, told ETin an interaction. “Consolidation, while it brings an economy of scale, also opens new opportunities. I see positive impact in the mid-term. Clearly, the transition that any merger will have, we have to go through and support,” he added.

He said these mergers will open newer opportunities that, however, may not be in the traditional areas, but will be in different new areas. “The traditional business is coming under pressure, and telecom companies are looking for new revenue streams, which are going to come from new areas like IoT (Internet of Things), locationbased services, cloud-based voice services. They are looking into these newer areas,” the executive said.

IBM is also exploring partnerships with telcos around the network functions virtualization (NFV) technology.

NFV allows telcos to launch new products and services faster.

With virtualised network architecture, a telco can launch a service in a couple of months and can even become a marketplace of services such as video streaming, cloud services, security and firewall services.

IBM’s relationship with these Indian telcos now goes beyond the IT outsourcing contracts. It is working with these telcos, especially in the areas of cloud and cognitive network operations.

“Given the intellectual assets the company has generated in the cloud and cognitive space broadly, there are a few domains we are working on with telecom companies, especially in cognitive network operations,” Bajwa said.

IBM, according to the executive, is also working with telcos to automate network operators and customer care services. Besides, it is helping them in terms of digital reinvention, social media strategy and cyber security.

“Security assumes a very important function given all the broad base digitisation, which is happening in the country. From the impact stand point of view, we are working with them on these aspects,” Bajwa said.

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