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Interview with Excel Telesonic India’s Kunal Bajaj

December 07, 2018
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Fibre is emerging as the key platform for providing last-mile connectivity and future-proofing telecom networks. The surging demand for high-bandwidth data services is driving fibre-to-the-x (FTTx) deployments. However, to ensure widespread fibre penetration, challenges related to right of way (RoW) need to be addressed. Kunal Bajaj, chief executive officer, Excel Telesonic India Private Limited (a Bombay Gas venture), talks about the evolving FTTx landscape in India, the challenges and the way forward…

What is the status of FTTx deployments in India? What are the key challenges the market faces?

Currently, wired broadband subscribers account for only 5-6 per cent of the total broadband market in the country. Fibre-to-the-home (FTTH) accounts for just 0.5 per cent of the total 400 million broadband subscribers. Further, there are more than 4 million homes passed, which is approximately 1.5 per cent of the FTTx homes passed, out of the total 250 million households. The average speed of a connection is around 3.5 Mbps.

Heavy data usage at affordable prices is leading to a growth in FTTx subscribers. Further, major telecom operators have set aggressive roll-out targets and plan to pass more than 10 million homes by the next financial year. The main focus will be on Tier I and Tier II cities, with plans to cover over 100 cities. That said, the market faces several challenges such as:

Need for high investment, with long payback periods.

Lack of a well-planned infrastructure in buildings, leading to an increase in delays and costs.

Disparities in policies from state to state, non-standardised local regulations, including high cost of RoW.

Opposition from resident welfare associations and society bodies for infra roll-out permissions.

High charges for obtaining permissions

Industry capex largely focused on wireless technologies due to faster returns on investments as compared to FTTH.

How do you see the competitive landscape for the FTTH market changing post the entry of JioGigaFiber?

The entry is likely to lead to consolidation and mergers and acquisitions of internet service providers, local cable operators, direct-to-home service providers, etc. We are already seeing this with a stake sale by Hathway and DEN. Further, the launch of JioGigaFiber will lead to price competition among the top operators. The per GB cost will go down substantially, to almost half or one-third, resulting in better affordability for end users. Also, they will be offered more high speed plans with a huge data allowance. Operators are expected to launch multiple services over fibre – video, voice  and content – to remain competitive. This will also lead to FTTH expansion beyond Tier I and Tier II cities.

What is your view on the policy provisions for fibre roll-out under the National Digital Communications Policy (NDCP), 2018?

The NDCP, 2018 focuses on broadband access to all, 5G roll-out, provision of Wi-Fi hotspots, expansion of 4G, tower fiberisation, internet of things, and M2M, all of which will be largely enabled by fibre roll-out. It emphasises on establishing a National Digital Grid and the creation of a National Fibre Authority, thus clearly focusing on the importance of fibre expansion. The key pointers enabling faster fibre connectivity are:

Facilitation of fibre-to-the-tower will enable fiberisation of at least 60 per cent base stations.

Incentivising and promoting fibre connectivity for all new constructions.

Encouraging investment in broadband infrastructure through fiscal and tax incentives.

Further, as per the policy, telecom optic fibre cable will be accorded the status of a public utility. Common service ducts and utility corridors will be established in all new cities and highway road projects to enable fibre roll-out. The policy also calls for a collaborative institutional mechanism between the centre, the states and local bodies for a common RoW, cost and timeline standardisation, as well as faster approvals.

With the advent of 5G, will FTTx emerge as a complementary or a competing technology in the future?

5G wireless technology will complement FTTx networks. It will rely heavily on deeper penetration of the wireline network and will, therefore, require a similar backbone as that needed for 5G. For long-term usage, 5G will continue to have limitations vs FTTx in terms of spectrum quantity and cost, economies of scale and reliability.

What is your outlook for the FTTx market going forward? What are some of the new business models that the industry can explore?

Exponential growth in data uptake will lead to the growth of the FTTH market. Government initiatives like BharatNet and GramNet will enable FTTx roll-outs. Fixed broadband is expected to grow to over 100 million households within the next three to five years with FTTx being the dominant technology. New business models will include active sharing to create a common infrastructure, which will also enable less capex and opex, and reduce deployment time. Further, there will be a surge in new solutions such as automation solutions, smart city solutions and intelligent transportation solutions.

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