Come 2014 and SIFY (NSE listed) would stop providing Internet services to low speed customers (Home Internet) and will focus on Enterprise services. The news had enough content and impact to make me come up with my maiden blog ‘Innovate or Perish’.
So what made the company, among the first to provide Internet service in the country to come with such a decision. Lack of innovation and fierce competition from the new players made the company lose its ‘First start up’ advantage. From its peak when it was ranked 3rd with a 13% market share after state-run BSNL (38%) and MTNL (19%) in 2005, the company slipped to 18th (2012). From having close to 9lakh customers the company now boasts of only 45 thousand nation-wide, a decrease in 95% of its customer base in 7 years. Everyone can remember the SIFY Cyber Cafe’s in their neighbourhood where people thronged and spend hours before the computer. A chain of 3000 cafes with 2lakh customers have now become limited to few, bringing negligible revenue to the company.
The question arises what ‘SIFY’ could have done to upheld its market share and customer base. With company sticking to its marketing strategy of providing services through Cyber cafe or home internet facility, it suffered heavily when new players like Airtel(8.07% market share),Reliance communication(7.88%) Hathaway Cable & Datacom Pvt. Ltd. ( 1.94% Market Share ) came up with Data cards and massive media campaign to lure its customers. The company’s media and advertising campaign was never competent and failed to have an impact on the People who became more techs savvy and eyed upon lucrative offers and Brand they can connect with. SIFY stands nowhere if I compare its advertising campaign with Airtel, Reliance, TATA or even Govt owned BSNL. Unlike Sify ,BSNL( 57.84% Market Share,2012) with its massive presence across the country(Tier 2 and Tier 3 cities),high broad band speed and Data offers to die for, upheld its customer base, in spite offering the home internet service model similar to ‘SIFY’. Same was the case with MTNL( 13.81%) the company always had enough to grab substantial market share. It was the first to launch 3G services in India.
Had ‘SIFY’ gone with a change in its marketing strategy, massive media/advertising campaign and innovated like other players did, the scenario would have been different and they could have found themselves handsomely placed in Top 3 among 155 total Internet Service providers(ISP) operating in the country today