Recession-proof Strategies Using Telecom

Beating Recession using Communications Services Recession or not, it is well accepted today many of the global economies are facing a slowdown. The combined effect of the mortgage crisis, energy prices and consequent meltdown of equity and debt markets have taken their toll on even some of the resilient economies like China and India. The financial services industry is worst hit; other sectors including IT, auto and retail are on the downturn. Surprisingly, telecom seems to have bucked the trend in most countries and is continuing to show strong growth in services consumption and infrastructure investments. Global telecom network revenues have continued to grow at an average of over 10% with mobile growing at over 15%. Mobile device sales are expected to grow at 8% cagr over the next 5 years with growth expected to surpass 10% in emerging markets like India and China where subscribers are growing at a scorching pace of over 30% p.a.. This strong growth is also reflected in the investment confidence of telecom operators, including multi-billion dollar acquisitions in India and Africa; capital investments increased from USD 47.5 Billion in 2Q07 to USD 58 billion in 2Q 2008. Telecom services have become quasi-utility services, with consumer dependence somewhat beginning to mirror their dependence on utility services like gas and electricity. There is evidence that during periods of financial weakness, consumers will cut-back on purchases of durables, gifts and other discretionary goods but might splurge on activities that create greater social bonding and sharing, like communication, entertainment, and networking. Additionally, all economic parameters leading to the slowdown have an interesting positive impact on telecom services. For instance, higher fuel prices result in less official and personal travel with a consequent growth in the usage of telephony, messaging, and conferencing services. In the business context, the pressure to manage revenues and profits is all Innovative the more intense during such times. Business Investors thirst for positive news and models are willing to reward those that meet expectations; on the other hand, even small failures are magnified and the response is harsh and immediate. Growth in While cost cutting is the typical Uncertanty focus of most managers during uncertain times such as these, there Optimal Global is a lot more that they need to do to Costs Expansion drive business growth. Expanding into global markets and developing innovative business models are two strategic levers for businesses to achieve growth when the markets around them have slowed down. Whatever the strategic objective, communications

technologies and services will play an important role, nay, a critical role in enabling the corporations of tomorrow. Expansion: Developing countries, growing at over 8.6% p.a. over the next five years, provide significant new market opportunities for large corporations that face demand saturation in the developed countries. This rapid growth, coupled with the fact that 80% of global population will be in the emerging economies, makes these markets a mustenter for most multi-nationals. Additionally, new leaders from the developing economies are making their presence felt in global markets. Companies are able to enter markets faster, launch products and services across all their markets simultaneously and create globally uniform customer experiences and brands. This increased globalization – in both directions – has become possible due to better connectivity and collaboration capabilities that are now available. Global Virtual Private Networks (VPN) using MPLS and Global Ethernet solutions enable the creation of secure, multi-location wide area networks with high levels of scalability and flexibility. Bringing new offices online or increasing bandwidth between them or implementing a new application globally has become almost as simple as installation of a plug and play device. Enterprise applications including ERP, messaging, and security, run an outsourced or managed basis by service providers, ensures that all stakeholders can have a seamless experience, irrespective of location and access mechanism. These features are particularly important to financial services and retail companies that tend to deal with large numbers of employees, partners and customers in all the markets they serve, yet want to leverage their global brands and services capabilities. Innovation: Global expansion also results in globally distributed teams based on the availability of best resources to run global businesses. Supply chains, downstream and upstream, tend to be spread across countries but need to work seamlessly as an integrated unit. Managing people across locations and building a shared organization culture is the biggest challenge for companies in this new world. Moreover, real-time collaboration across such organizations is critical to the creation of new products / services and taking them to market ahead of competition. Companies today seek face to face globality and communications networks and services have risen to the occasion. Whether it is high definition video conferencing (Telepresence) or next-generation content delivery networks or extensive wireless networks, there are a variety of platforms available for businesses to engage more effectively and in real-time with their

stakeholders. It could be a gaming company seeking to launch a new online game with a faster download window of 45 minutes against its earlier 24 hours; it could be a BPO that wants its engagement managers to brief their clients face to face every morning instead of waiting for the monthly on-site reviews. Or it could be a fashion products company that wants to provide video-based training to its sales teams and agents across a continent the day prior to the launch of its next best-seller. Finally, it could be a bank that uses mobile ATMs with wireless connectivity that opens up whole new, untapped rural markets for banking products. Cost Management: Traditionally, businesses have focused on cost reduction during tough times, usually, by going after G&A and marketing costs. However, global expansion and innovation do add new administrative and marketing costs and create a situation where businesses have to find new avenues of improving profitability. The emergence of hosted or managed services for communications services and applications enables businesses to expand their capabilities without many of the associated costs. Managed services like messaging and security, not only reduce operating costs but also free up valuable capital resources. Similarly, data center outsourcing is increasingly becoming acceptable, even amongst traditional non-believers like banks. Additionally, there are several customized managed services to address the demands of specific industry verticals. For instance, hosted contact centers enable mid-sized BPOs to scale their operations with limited up-front capex and pay as they expand their business. Services like public Telepresence rooms, in addition to their contribution to innovation, provide considerable savings in cost, eliminating travel and other associated expenses as well as providing other intangible savings in carbon emissions and employee productivity.

The world has seen more changes in this decade than it has ever seen in the past. The next few years will probably accelerate this change, in political, economic and social spheres. This is also a world that is as “coupled” as it can get, through a complex and intricate web of relationships. Connectivity and collaboration are the heartbeats that drive this new networked world. It is a world where the strategic adoption of communications and services will play a decisive role in differentiating winners from the also-rans.

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