SMM providers point to the rise of Indian-owned companies and the government’s aggressive policies towards companies with large presence in the country.
In addition, these firms are seen as a key component of India’s IT infrastructure.
“There are now a number of SMM companies that are in the private sector.
Many of them are being developed and have already started selling their services in India.
This has allowed companies to take the lead in establishing themselves as a viable business model in India,” said K. R. Ramachandran, director at M.N. Ramakrishnan & Associates.
“However, we are concerned about the impact these companies are having on the SMM sector.
These companies have not been properly evaluated and their services have been used inappropriately.”
Ramakanth, who is also managing director at ICICI Securities, added, “This could be a big problem for the SMMs, because the Government is not looking to regulate them.”
Ramakanth pointed out that while SMMs are now being regulated by the government, it has yet to regulate the telecom sector.
“It’s a very sensitive subject.
The Government has been very clear that it wants to control the internet.
There are a lot of big players in the telecom market, and it is not clear whether the regulation of the internet sector is a priority for the Government,” he said.
The impact of these companies on the telecom industry has been a source of anxiety for the industry.
“There is a lot that is being done, but the impact of this has been really negative.
In fact, in one survey conducted by ICICIS in 2012, almost 60 per cent of respondents felt that the telecom services were not affordable,” said Naveen Rao, partner, consulting firm Mysuru Consulting.”
This is not a sustainable scenario.
The government needs to take this issue very seriously,” said Rao, who also advises on IT and telecom issues.
Ramakan, however, believes that the Government could use a different approach.
“A lot of the government initiatives have been focusing on empowering the small and medium enterprises.
This is something that we have witnessed in the last two years.
There is an increase in SMM firms in the sector.
However, we believe that this is only a first step,” he added.
While the government has made a lot out of the role of SMMs in IT, it should not forget that this sector has an important role to play in the wider economy.
“The IT sector has been an important component of the economy since the inception of the country and we should not underestimate the importance of the SMAs,” said Ramakan.