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India Needs 100,000 Telecom Towers

Despite a consolidation in the telecom sector, India needs around 100,000 additional towers to take care of the growing data and voice requirements. The country currently has about 461,000 mobile towers for a customer base of 1.18 billion.

The world’s second-largest telecom market is undergoing consolidation with operators either merging with larger players or closing operations altogether.

Tower companies, which lost thousands of co-locations per tower leading to drop in revenues, too are seeing the impact of consolidation. Due to the changed scenario in the sector, Bharti Infratel and Indus Towers last month announced a merger creating the world’s second largest tower firm.

However, if the figures are compared to China, which is the world’s largest telecom market, a totally different picture emerges. China has over 1.94 million telecom towers for a customer base of 1.4 billion. China Tower Corporation alone has about 1.9 million towers and the remaining 40,000 to 50,000 towers are owned by smaller firms. In contrast, the merged entity of Bharti Infratel-Indus, which is the world’s second largest tower company after CTC, will have a portfolio of 163,000 towers.

India lags far behind China in terms of investments too. Sectoral regulator Telecom Regulatory Authority of India (Trai) has been raising the issue of insufficient investment in infrastructure as the reason for call drops, a charge refuted by telecom operators. The upcoming National Telecom Policy aims to garner an investment of $100 billion in the telecom sector in five years.

“We did a comparative benchmarking with China, which has consistently spent $70 billion on telecom infrastructure per year for the past many years. We have invited $100 billion in five years. In my view, $100 billion is actually a slight underestimation. If we really want to create next-generation infrastructure, India must create a framework where we can have significant investments coming into the sector,” Telecom Secretary Aruna Sundararajan said recently.

The telecom sector in India has a huge scope for growth as the country has touched only 30 per cent broadband penetration and 70 per cent of the growth still remains to be tapped.

With the expansion of 4G, 5G, Artificial Intelligence, Virtual Reality, Internet of things and M2M etc, the country is set to witness a multi-fold growth of data which will necessitate the installing around 100,000 mobile towers across the nation in the near future,” Tilak Raj Dua, Director General, Tower and Infrastructure Providers Association (TAIPA) said.

Dua added that India extends telecommunication services to more than 1.1 billion subscribers through 461,000 mobile towers, mounted with around 1.8 million base tower stations (BTSs), as of May 2018. Approximately, 90 per cent of these total mobile towers are shared among service providers.

“While in China, there are over 1.9 million mobile towers (as per the tower exchange data), we believe, out of the total only around half a million mobile towers are shared among TSPs. The sharing of mobile tower companies in China have recently realised the significance of the sharing model, emulating the Indian success story”, Dua added.

In India, the sharing concept started in 2005. Under the sharing concept, the towers are shared on a non-discriminatory and transparent basis. The concept has advantages such as efficient use of capex, improved aesthetics, faster rollouts, energy savings, and better coverage quality.

“India is the first market to develop and adopt this model, after which it has been emulated globally and is a Harvard business School case study,” Dua signed off saying. – Business Standard

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