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Interview with Vanu’s Sanjay Bakaya

June 20, 2018
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Riding the wave of the government’s focus on mobilising the rural economy by technological empowerment, companies are developing low capex and opex products with unique business models, in order to justify the business case in rural areas.  Sanjay Bakaya, managing director and vice president, Asia Pacific, Vanu shares areas of focus, issues and challenges and future roadmap of the company.

How has the Indian rural telecom landscape evolved in the last few years? What are the key trends and challenges?

The Indian telecom industry has experienced substantial growth, primarily in the wireless segment, in the last few years. New set of services ranging from voice and data, Wi-Fi, virtual private network (VPN), bandwidth on demand on VPNs is transforming the way business is being conducted, specifically in the services and manufacturing sector in India. The key trends point to higher consumption of data and bridging the gap between rural and urban India. The current set of challenges are mainly caused due to falling ARPU and inadequate basic infrastructure in rural India, like roads, power and backhaul and huge capital investment required to build wireless networks to meet the growing demand for all these services.

What are Vanu’s key focus areas? How has been the business growth in last one year?

Vanu’s key focus is to work with existing communication service providers to increase their revenue and profitability by connecting rural markets by using a unique business model and Vanu’s software-based radio technology. This will result in lower operating cost and opportunity to create new revenue streams for service providers. As a company, we have always believed that the delivery of communication to all parts of the world is essential in ensuring that all markets can access basic services and participate in the global economy. Vanu’s business has grown multi fold in last one year in our commitment to connect the unconnected and ensure no community is left behind.

What can be done to make rural connectivity economically viable? What are the key opportunities in this space?

At Vanu, we have focused on making rural connectivity economically viable and that is centre piece of Vanu’s vision. Through the combination of innovative technology and a unique business model, Vanu has been working for more than 20 years to ensure no community is left behind in the digital economy. There are three elements to this strategy: software-based radio, network architecture and business model

• Vanu’s software-based radio technology addresses operating expense challenges by improving power and backhaul efficiency and leveraging solar power to run network elements

• Vanu uses small cell architecture to focus connectivity on where it’s most needed

Vanu offers network operators a new shared wholesale business model to provide connectivity to customers, all without the need to build a dedicated network for each communication

Vanu has also developed a proprietary set of tools to pinpoint populations that do not have coverage. These business intelligence tools provide critical insight and guidance regarding capital allocation.

What are your views regarding energy consumption of the telecom sector? What energy management strategies are being practiced?

We all are aware that the energy requirement of the telecom sector is growing at a rapid pace, as telecom operators implement newer technologies and expand their network coverage to rural areas. At present, the power requirement of the telecom industry is approximately 25 billion kWh per annum. This requirement cannot be met alone by grid connectivity. As a result, industry is exploring possibility of using a combination of solar and wind energy at existing sites to reduce the opex.

In order to cover new geographies, which are mainly rural areas, we need to have lower opex for sustainable operation which can be achieved only if base transceiver stations (BTS) are low on power consumption (< 100W). Typically, a village population is concentrated within a 2-3 km radius. A BTS transmitting low power up to 10 watt is the best fit for rural. Vanu’s focus is to have BTS with 50-100W power consumption that transmits up to 10W radio frequency (RF) power with coverage radius of 4 km, runs on solar energy without grid connectivity. This enables a lower opex, the lack of which is one of the main reasons operators haven’t made inroads to rural parts of the country.

What is the current level of green energy deployments by the industry? What has been your experience in this space?

Growing telecommunications infrastructure requires increasing amount of electricity. Part of the electricity comes from the grid and the remaining through fossil fuel like diesel, etc. Both of these sources contribute to the emission of green house gases (GHG), which have negative environmental effects.

Green telecom has many facets. Increasing the use of renewable energy has become a targeted goal of the telecom industry. Diesel generators are costly and the industry is looking to replace diesel with wind turbines, solar power and fuel cell power. Currently, about 25 per cent of the 470,000 towers in India are diesel-free sites. Tower companies have taken initiatives to reduce opex by investing into hybrid energy solutions. However , tower companies have been unable to convert majority of sites to green due to high power consumption of currently installed telecom equipment at these sites.

Due to huge cost pressure on telcos, they are aggressively looking towards to zero opex solution. We have been at the forefront of bringing this change in the industry to deploy low power BTS/eNodeB. Recently, we secured a contract to deploy 1000 BTS sites, almost all of which were 100 per cent solar based.

What business potential do emerging technologies such as in-building solutions, Wi-Fi and fibre hold for telecom infrastructure space? What is your role in this space?

With approximately 80 per cent of voice and data consumption taking place indoors and considering the challenges of higher frequency spectrum, the need of in-building solutions (IBS) is higher than ever before. This is an immense opportunity for companies like Vanu, which focuses on small cell solutions (2G and 4G) and which also run on public broadband network. Phenomenal growth of data consumption on 4G networks is pushing telcos to connect their site to fibre to fulfil the future requirement of data. There is an immense opportunity available for neutral host service provider on sharing fiberised infrastructure to multiple operators. Since the future market is data centric, we expect significant growth for small cell and fibre for next couple of years. At present, we offer IBS for 2G, 4G, 2G+4G, and 2G+Wi-Fi solutions.

What are your views regarding the draft of National Digital Communications Policy 2018?

The policy when implemented will transform India into a digitally empowered society and knowledge economy. The National Digital Communication Policy (NDCP) 2018 is focussed on complete transition from physical to digital infrastructure, with norms to push availability of high speed and uninterrupted broadband services in mission mode. It aims to provide broadband coverage at 50Mbps to every citizen, 1 Gbps connectivity to all gram panchyats and fixed line broadband to 50 per cent households. On these data pipes, there will be video applications for digital learning, e-health, e-governance, digital banking and payments, efficiencies in agriculture, logistics, smart grids, water management, etc.

What are the key challenges you face? Do you have a regulatory wishlist?

A couple of technologies we wish the regulator and policy makers should seriously consider are:

• Wholesale network as a neutral host (MVNO) in rural operations should be promoted and subsidised

• Long term evolution (LTE) in unlicensed spectrum (LTE-U)

• Disconnected mode of operations among local communities so that common man can at least have access to emergency services even when there is loss of backhaul

What is the expansion and growth plan of the company? What do you expect to be the biggest growth drivers for your business?

There are one billion people with no connectivity at all and 3.5 billion without access to internet in the world. Addressing this problem will deliver significant benefits to these populations and is a compelling business opportunity. We plan to continue to develop and deliver technology solutions that will make it possible for carriers to profit from providing these services.

What is your outlook for the Indian telecom industry? What opportunities do you foresee for Vanu going forward?

Social media outreach is becoming more important for businesses and politics. It is imperative that rural India is connected to foster growth, agriculture, jobs, healthcare, etc. We see a big opportunity in rural India with focus on basic voice and high speed data delivered over reliable cellular network, which is economically profitable for communication service providers.

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