HONG KONG, JUNE 25, 2009—Small and medium enterprises (SMEs) in China are less exposed to the global economic climate than most of their counterparts in other countries because they have a relatively stronger domestic market to feed.
As a result, they expect to continue spending on telecoms during the downturn, according to experts from Ovum.
“They are price-sensitive and are more likely to adopt managed and hosted services in order to avoid up-front capital investments, however we recommend caution when looking at these expectations,” said Claudio Castelli, senior analyst at the research firm. “Even in China, economic growth is slowing considerably. At some stage it is likely that cash-strapped SMEs will look to cut costs and that budgets may not be converted into actual spend.”
Increased spend on mobility
Mobility is seeing fast take up by SMEs in China, Ovum’s data has indicated. Currently 61 per cent of SMEs’ employees have some degree of mobility; but this high level of mobility is not yet reflected in expenditure on mobile services.
Ovum’s findings were based on a recently conducted SME survey of 100 companies (those having between 20 and 1,000 employees) in China.
As is the case in most Asian countries, SMEs in China don’t supply mobile devices to their employees; mobile users supply and support their own personal mobile devices when at work. “We believe this practice has [sic] a high degree of risk for the business,” said Castelli.
However, this scenario is likely to change, as SMEs expect their expenditures to grow more on mobile communication services than on fixed line connectivity services.
“Moreover, recent reforms in the Chinese telecoms market and the release of third-generation, 3G, licences nationwide will promote more services and competition, further accentuating this growth,” Castelli said.
Mobile apps in demand
SMEs in China also expect to implement new mobile applications. Considering the size of the Chinese market, this is a major opportunity for vendors and service providers, Ovum experts said. Mobile e-mail has the highest potential to grow, and other mobile applications with promising growth prospects include mobile instant messaging and mobile multimedia, which altogether offer great business opportunities for mobile unified communications (UC) providers.
Applications that address the specific needs of the mobile workforce—such as tracking of goods or vehicles, field service automation and sales force automation—will also be in fairly high demand. In addition, there are a few companies deploying specific solutions for people moving around within the workplace, and Ovum sees a potential for fixed–mobile convergence (FMC) solutions.
Many SMEs are willing to deploy PBX-like features on their mobile phones. Some expect these to be provided by a mobile service provider, while others expect to deploy them on their own premises. However, it will be difficult to deploy integrated solutions based on users’ personal devices. “SMEs will need to take full control of their mobility solutions, including mobile devices”, said Castelli.
