India is not only a country but also represents a continent in terms of market diversity and growth opportunity, the top official of global telecom industry body GSM Association said here.
GSMA Director General Mats Granryd said that among emerging markets, there are advanced markets such as South Africa, Nigeria in North Africa and growing markets like Rwanda, but the Indian market represents a continent itself.
“India is more like a continent. It’s not a country. It’s like a continent. Little bit similar (to emerging economies in Africa and South America) but smaller in scale in India, you have advanced markets in Delhi, Mumbai Hyderabad and Bengaluru then you have other parts like Bihar where you would have a lot of developing markets,” Granryd told PTI in an interview ahead of the Mobile World Congress 2019 here. He said India is an exciting market as compared to leading economies; it offers both options of working on advanced technologies as well as economies of scale.
“If you want to do real advanced market, you should do US. If you want to scale, do China. For India case, maybe, one can look at both because you have sort of both ultra-advanced and ultra-scale. So, it is pretty interesting market,” Granryd said.
He said India has seen tremendous growth in telecom subscribers in 15 years from “hardly anything” to covering 55 percent of the total population with mobile services and, therefore, leaves a lot of room for further development.
While the Indian government has expressed its willingness to keep the country at par with leading economies of the world for 5G services, GSMA DG believes there will be 1.4 billion 5G connections globally by 2025, accounting for about 15 percent of the total market. By this point, almost half of connections in the US will be 5G, 30 per cent will be 5G in China, and 5 percent in India.
“It’s (India) basically a growing economy, it’s a growing country and we all know that physical infrastructure is not that brilliant and we all know that fixed line is not very well built out and, therefore, it is benign to have a wireless connectivity being in place instead and you can say 5G would be fibre replacement there,” Granryd said.
India, under its new telecom policy, has given special weightage to push laying of the optical fibre in the country to boost strong connectivity. The policy aims to provide access to broadband with 50 megabit per second to every individual by 2022.
Granryd expects that 5G in India will be built first in urban areas, university area, metropolitan area where high-capacity low-latency applications will be required. “So, I think India has a strong future. You have market that has consolidated to pre-dominantly three major operators and I think that’s a situation which I think will be radical for future growth,” he said.
Talking about financial stress in the Indian telecom sector, he said return on capital remains low at 6 per cent globally because of tariff pressure on which telecom operators need to work on with new business models and innovations. “The return on capital employed is only 6 per cent, which is very low. That is something we have to work on. This is global. It’s price pressure. The ARPU (average revenue per user) is decreasing. Some of mobile operators are moving away from just connectivity which is one avenue of business. If we adopt intelligent connectivity, we will see more growth and more opportunities,” Granryd said.
He said some operators would believe just connectivity is a fantastic business which is not bad but if they want to be part of future growth then GSMA believes companies should move towards intelligent connectivity.
With 5G technology coming in, intelligent connectivity will look at modern technologies like artificial intelligence, internet of thing and big data analytics to offer more services to consumers. “Therefore, we will have more happy life when it comes to business opportunities and consumers will find value in this and pay us more,” Granryd said.―The Hindu Business Line