Balancing the Tightrope

Today, the market potential for SMBs is unbelievably high. The SME segment has come to the forefront in the last few years in India due to several reasons - government thrust towards the segment, increasing business opportunities in a robust economy, domestic demand, opportunities through globalization, rise of tier-2 and 3 cities and towns and momentum in entrepreneurial ventures. With changing business trends, coupled with technology and product enablers, we see that the SME segment is poised for tremendous growth.

Secondly, there is every possibility that India may slowly emerge as the new preferred destination for global manufacturing. The government is very keen to give a boost to manufacturing so that it soon starts contributing 25% to country's GDP. This should be seen in context of Electronics industry growing at around 25% every year - in spite of economic turbulence.

12th Five Year Plan has proposed a National Institute for e-governance (NIG), with the aim of promoting computer literacy and information technology skills among government employees in association with premier institutions like Indian Institute of Management (IIMs).

Well, the recent verdict of the Apex Court cancelling 122 licenses (98 GSM and 24 CDMA) of the 334 licenses in total. The verdict is a setback for foreign players in India where the cumulative FDI in telecom sector stands at more than US$10 billion. The banking sector has a significant exposure to the telecom sector, estimated to account for nearly three percent of the overall loan portfolio of the banks. Total number of impacted subscriber stand at 66.6 million which is 7.5% of total subscribers. Now, most of these subscribers will have the option to migrate to other networks as Mobile Number Portability (MNP) is in place.

Going forward, Universal Service Obligation (USO) fund was created by the telecom department to give grants for connecting rural areas to all panchayats.  Creation of the network and sharing it with other telecom operators will help lower the connectivity costs of companies. This network will help the government to achieve its target of broadband penetration. India's telecom regulator had in December set a target of 75 million broadband connections over two years and 160 million by 2014.