Adieu 2023- Dialling into a new era of connectivity and innovation

The Indian telecom sector is one of the fastest-growing in the world. It has a subscriber base of over 1.2 billion and is expected to grow to over 1.5 billion by 2025. The Indian telecom sector hosts 1.18 billion mobile users, resulting in a tele-density of 84.72%. The Indian telecom industry underwent significant reforms with the 2018 launch of the National Digital Communications Policy 2018 (NDCP ’18), marking a pivotal shift. This policy, distinct from its predecessors, aimed at an overarching reformation of the entire digital sector, not solely telecommunications. The advent of 4G LTE services nationwide ushered in the age of data in India, prompting the government to recognize the necessity for an inclusive framework that encompasses voice, data, and internet presence across all sectors.

A distinctive feature of India’s telecom landscape is the “Sharing of Telecom Infrastructure” concept. Enabled by Infrastructure Provider-1, this unique model has not only set a global benchmark but has also become a case study at Harvard Business School—a testament to the forward-thinking approach of our industry.

The towerco model, has allowed telcos to save costs and concentrate on network rollouts, ultimately enabling the migration to next-generation technologies. Additionally, it has allowed for efficient allocation of capital expenditure towards network expansion and service delivery. This has given telcos the opportunity to focus on the competitive service layer, with the infrastructure layer being managed by towercos.

• The Indian Telecom Bill 2023:

The Telecom Bill 2023 extends the colonial architecture of regulation to digital authoritarianism, marking India’s transformation to a ‘rashtra’. The Indian Telecom Bill 2023 has replaced three laws – the Indian Telegraph Act, 1885, the Indian Wireless Telegraphy Act, 1933 and the Telegraph Wires (Unlawful Possession) Act, 1950. The Telecom Bill 2023 is geared towards amending and consolidating laws pertaining to the development, expansion, and operation of telecommunication services, networks, and spectrum assignment. Notably, the bill designates telecom infrastructure as Critical Telecom Infrastructure, emphasizing network security and imposing punitive consequences for damage.

In conclusion, the Telecom Bill 2023 is anticipated to streamline business processes, reduce compliance burdens, and create a favorable business environment. The clauses collectively form a comprehensive framework governing the Right of Way for telecommunication networks, ensuring transparency, fairness, and alignment with evolving industry needs. Commitments to non-discriminatory RoW grants, delinking Telecom Infrastructure from property taxes, and deploying telecom infrastructure on private property based on agreements between property owners and infrastructure providers are expected to contribute significantly to building resilient telecom infrastructure, including telecom towers.

• Fastest 5G Rollout:

India’s 5G rollout is among the fastest in the world. 5G subscriptions in India are likely to hit 350 million by 2026. India has covered more than 730 districts with 5G in less than 15 months. Telcos have deployed nearly 4 lakh BTSs since the launch of 5G services. The future holds even greater promise with 6G, expected to reach speeds of 1 Tbps (1,000 Gbps). This has happened because of the proactive support of the Government and the role of DIPA in creating digital infrastructure and mapping of street furniture on GatiShakti Sanchar Portal for speedy roll-out of digital infrastructure.

Challenges of Telecom Infrastructure Industry:
The telecom industry in India has been working towards the implementation of 5G by deploying small cells on street furniture, focusing on fiberization, and streamlining RWA processes, among other policy interventions. However, there are still some challenges that need to be addressed. Some of these challenges include:

• Implementation of RoW Rules, 2016: Some locations like Ghaziabad, Noida Authority, etc., are not abiding by the RoW Policy of the State and are still following the old Building Bye-laws. The RoW Policy of the State/UT needs to be followed in true letter and spirit.
• Property Tax Issues: Currently, the municipal corporations in the states of Maharashtra, Tamil Nadu, and West Bengal are charging property tax on mobile towers, and it varies from 45% to as high as 137%. Section 16(3) of the Telecom Bill aims to mitigate the current issue of state agencies charging a huge amount of property tax from property owners on which towers get installed.
• Deemed Approval: 27 States/UTs have implemented Deemed approval clause in their RoW Portal and remaining 9 States/UTs to implement the same.
• High rental charges: Some authorities in States/UTs like in Delhi, Chhattisgarh, etc. are charging exorbitant high rentals on Digital Infrastructure and same needs to be rationalised.
• High restoration charges are being charged in states like Rajasthan needs to be rationalised.
• Input Tax Credit: The input tax credit on telecom towers is currently not available as telecom towers are not included in the definition of “Plant and Machinery” under section 17(5)(d) of CGST Act, 2017. Recently, the input credit has also been discontinued on associated accessories/parts for telecom tower such as battery banks, DG sets, rectifiers, cables, shelters, other electrical equipment, etc. The industry expects that under the GST regime, input credit should be available for all the procurements, including telecom towers.
• 21 States/UTs have adoption of amended Model Building Bye Laws 2016, remaining 15 States/UTs to adopt the same.
• High Regularisation charges: Many states like Delhi, Chhattisgarh, etc., are putting high regularization charges on the already installed mobile tower along with the penalties. The same needs to be rationalized. Understand that Tamil Nadu State had regularized old telecom towers by allowing a one-time payment of Rs 10,000/- per tower.
• EB related Issues: There are also some EB related issues that need to be addressed, such as charging EB tariff at commercial rates instead of industrial rates in most of the states/UTs, delay in rectification of faults, and lack of clarity in the type of documents required while applying.

To avoid any delay or penalty, it is recommended to have company-wise online EB bills on registered email IDs and one company one bill for online payment of electricity bills. Smart/prepaid electricity meters can also be installed at the telecom sites.

While most of the challenges mentioned above are addressed under the Telecom Bill 2023, the rules (to be made under Telecom Bill 2023) and further implementation of the Telecom Bill 2023 on the ground will be more helpful in resolving prevailing industry issues and will further facilitate the speedy rollout of Digital Infrastructure across the country.

• Way Forward:

Indian telecom infrastructure industry has played a vital role in the unhindered growth of India’s telecom sector. It is quite evident that the growth of telecom services could not have been possible without a robust and ubiquitous telecom infrastructure.

Telecom Infrastructure providers plays a significant role in making available affordable telecom services in India. Over the years, the telecom tower industry in India has emerged as a trendsetter in the infrastructure sharing. In the coming years as well, the IP-1 will play a prominent role in the growth of Digital Economy, Industry 4.0, and in successful implementation of Government program such as Digital India, Make in India, Start-up India, Smart Cities, etc.

In India, 5G has emerged as a critical component in the journey to realize GoI’s Digital India vision. Following the launch of 5G services in early October 2022, India is experiencing massive network deployments, registering one of the fastest 5G deployments globally. 5G connections are expected to reach 700 million, accounting for 57% of mobile subscriptions in India by the end of 2028.

While 5G might present new opportunities for growth for IP1s, industry needs to evolve and look beyond the regular business to tap new avenues of growth. Some of the business opportunities are monetization of existing assets like via advertisements/billboards/OOH (Out of Home) at tower sites, opening EV charging stations at telecom towers, data centers, etc. While other new business/revenue streams include upcoming technologies like 5G, small cells and DAS/IBS, fiberization, power-as-a-service/power generation, smart cities, RETs (Renewable Energy Technologies), and Wi-Fi.

Conclusion
The key advantages of embracing these emerging technologies include operational agility, improved data security, enhanced customer experience, and so on. These technologies are even giving birth to new business models. Business efficiency is another area where digital transformation plays a pivotal role, and organizations can provide consumers with personalized and on-demand products/services more than ever before. The global digital transformation market size is expected to reach more than USD 1 trillion by 2025. Hence, it is a clear indication that digital transformation is the need of the hour for organizations, big or small. Although the telecom sector in India has struggled with restrictions and policy disruptions for long, the reforms taken up by the government now point toward a new era of healthy growth.