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Driven by Data: Infrastructure providers leverage emerging opportunities

January 24, 2018
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By Surajit Khan, Business Director, Maxeed (a division of Quess Corp Limited)

In the past few years, India has witnessed the announcement of large-scale consolidation, from both operators and tower infrastructure companies. We have also seen technology disruptions transforming the business strategies of incumbent operators in order to remain at the helm of competition. The entry of Reliance Jio as well as initiatives like the Smart Cities Mission and Digital India are key drivers of telecom growth in urban and rural India. The telecom sector is gearing up to tap the potential of 1.25 billion Indian consumers. Internet services are being made available at new price points to make them affordable to new user segments. The Indian market has witnessed 40 per cent year-on-year growth in internet users, along with the entry of 4G-enabled smartphones in 2017. The focus now is on investing further in new technology and upgrading infrastructure.

In India, more than 50 per cent of internet users are connected through the mobile while close to 40 per cent are accessing the internet through other means. The internet economy is forecasted to rise to $500 billion, with mobile contributing $240 billion. There is an interesting trend of collaborations between the telecom and broadcasting verticals, where operators are serving as the facilitators and broadcasting companies are leveraging telecom networks.

The telecom sector in the country had introduced the concept of sharing passive infrastructure and there is now a growing demand to replicate the same with active and fibre infrastructure, in order to optimise capex and speed up infrastructure deployment. With advance 5G trials by all operators, backhaul remains a critical concern. Fibre backhaul is the only alternative to costly microwave technologies. There is a positive intent among operators to invest in fibre for both wireline and wireless networks to enhance data speeds.

The Department of Telecommunications’ recent decisions to amend the unified licence scheme for active infrastructure sharing and revise the public-private partnership model for the BharatNet project are important steps to encourage infrastructure sharing among operators. Further, a consensus on the unified Right-of-Way Policy for all states will pave the way for smoother and faster fibre deployment.

Wi-Fi hotspots will be the way forward to cover unconnected villages and remote areas and bring the untapped rural population into the mainstream. This will also make the internet scalable and affordable for the masses. The country is expected to have 800,000 additional hotspots to match the global trend. Significant investments are pouring in into this space by RailTel, Bharat Sanchar Nigam Limited and other major operators.

Telecom service providers will also play a pivotal role in accelerating the growth of internet of things (IoT), since high quality connectivity is the backbone of this new technology. Programmes like Smart Cities, Digital India, Start-up India and industrial corridors are creating new opportunities for the IoT ecosystem. Most operators are collaborating with global IoT technology players to deploy advanced technologies for projects under various government initiatives. IoT will be a game changer and operators will garner revenues by adopting new business models for consumers, enterprises and industries.

The mobile app ecosystem is another area for growth. Developers and entrepreneurs are excited as India is already fourth among mobile app-based economies. At present, this economy is driven by the time spent by users on mobile apps rather than the revenue or number of downloads. With the adoption of 4G technology, users are becoming comfortable using smartphone mobile apps for all activities, from e-commerce to travel bookings. Video-on-demand is the next big thing in the digital media space. There will be a rise of the pay-per-view model as an alternative source of revenue for content creators. Operators have already started offering mobile TV services that enable access to select TV channels through their networks and connected devices.

We have witnessed how the Telecom Regulatory Authority of India has redefined itself from being an arbitrator of disputes to an agency that takes proactive decisions to tackle the challenges of new-age technologies and devices, and the relationships between stakeholders. A new telecom policy is being put in place, which will help operators in upgrading to 4G, preparing for 5G and exploring other emerging technologies to help double India’s current internet user base. The policy will also focus on the dependence on imports of telecom components, besides ensuring network security and data protection.

The telecom tower industry has witnessed many key changes in the past few years with the focus shifting from growth to operational profitability, innovation in networks and the roll-out of next-generation 4G/VoLTE networks. Government initiatives like Digital India and Smart Cities will play a pivotal role in the faster roll-out of telecom infrastructure, thereby establishing speed-of-light connectivity. Going forward, to cater to the rapidly increasing data needs, telecom network infrastructure sharing will be a key success factor.

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