Post Covid-19, is India’s TMT industry on the cusp of takeoff?

Despite Covid-19 and its impact, the telecom, media and technology (TMT) industry in India is exuding strange confidence.

As things return to normal, the climb back to recovery will be steep. And there will be multiple dimensions added onto a complex landscape – the need to go digital, embrace automation, or to take the nonlinear path for growth using technology – as witnessed in the pre-Covid-19 days.

Importantly, there are new opportunities that are arising from businesses closing in other countries and looking at India as a business option. As we aren’t living in static, zero-sum societies bound by political or economic ideologies, TMT can progress in real fast time, with two principal factors facilitating it:

Extensive globalization. Nothing helps the TMT industry progress more than globalization, and it needs more of it today than ever. Though the sector can replicate its past accomplishments across different location/s to achieve scale and cost arbitrage, this alone will not lead major players to plug out of other countries and plug into India. We need to improve our ease of business process and be a true destination of choice for the industry.

Intensive digitization. New-age technologies like AI or ML will lead high productivity and faster product development and services. This will result in lower cost of services, which will help millions of organizations already in distress to manage costs.

New opportunities driving business confidence
Putting things in perspective in TMT, and specifically from India’s standpoint, let’s look at the emerging prospects to ascertain what lies ahead once the situation stabilizes and the economy picks up.

Riding the retail data beast. After disrupting the telecom space, Reliance Jio will likely extend its business into e-commerce. Sitting on a rich pile of user data, Jio’s recent JV with Facebook will bring Jio’s business platform JioMart to WhatsApp. In this winner-takes-all, high-stakes game, this is a potent threat to all major e-commerce players like Amazon and Flipkart.

5G to disrupt business. ICT, an essential service even during the global shutdown, will be leveraged to shape many business models. This ICT surge will be led by 5G, with its enhanced speed, high reliability, low latency connectivity and guaranteed service quality bound to disrupt the industrial and consumer space. The pandemic and its aftermath will accelerate the process.

Increase in cloud spending. As WFH continues and business and formal activities go online, there will be significant increase in demand for cloud services – which has emerged as the foundation of anytime, anywhere infrastructure and critical in today’s times. As demand for communication equipment and telecom services surges, it will increase spending on security software to secure endpoint, cloud-based tools, VPNs, etc., giving a huge fillip to the TMT sector.

India’s data edge driving DX. With about 1 billion mobile phone users, data will lead India’s DX. It has already enabled mobile banking transactions via UPI, Paytm, or through Aadhar linkage (which has crossed 10 billion transactions). It has eased our reach to loan credit, healthcare services, media access, etc. It’s an enabler for startups and MSMEs, severely impacted by Covid-19. As we perceive a common digital platform for connecting buyers and consumers to agencies like GST and banks, data will lead this transformation.

Rise in content delivery network. In the foreseeable future, social distancing will continue to curb large-scale aggregation of people. This will result in increased use of social networking sites or consumption of web-based, HD content. This will quadruple the CDN market in India, opening a large untapped market as everyone cannot afford the likes of a Netflix, for example.

As AL, ML, and analytics find high uptake in Covid-19 times, they will play a big role in helping public and private players come up with pointed solutions. This is not to suggest that challenges or threats won’t exist, but the prospects in the sector and the resiliency of the industry will overlap them and help it forge ahead.

These are difficult times, but also interesting times. And only time will tell whether the TMT industry will make the best of these opportunities and take off.

• Ajesh Chandra
• The author is TMT Portfolio Head, India Market Unit, Capgemini.