Indian telecom industry in 2020
The Indian telecom industry continues to grow at a phenomenal pace – with the erstwhile growth in voice being replaced with the growth in data, thus catapulting the country to number-two position, in terms of number of subscribers, and number-one in terms of data consumption. The data consumption in India is more than that of data consumed by the US and China. The data consumption per mobile phone in India is the highest in the world at more than 9 GB/month per subscriber.
In the last two decades, mobile service providers, device makers, infrastructure providers, and internet companies built a virtual second world for us to live, work, and play in – a digital one. The sector has emerged as the key enabler of Digital India, with various new services/applications like digital payments, Aadhar, e-governance, e-commerce, and trade. The telecom infrastructure is the backbone of the telecom services, which enable these applications and services. Therefore, the importance and requirement of a robust telecom infrastructure has become manifold now.
The telecom towers industry has played a critical pivotal 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. There are close to 583,000 telecom towers in India.
There has been a spectacular growth in fiber rollouts as well during the last 5 years. Though it could have been better if proper policies/permissions procedure were laid down by the state governments in line with the RoW rules-2016.
Mobile and broadband subscription in India during the last 10 years has increased tremendously, accelerating the mobile business revenue by average rate of 3 percent. The subscriber base has crossed the 1.1 billion mark.
4G technology adoption in the country has led everyone to believe that the march of technology has to happen. The 4G success story has set up a perfect platform for 5G. The immediate next disruption in the telecom sector would be through technology evolution to 5G, which in turn would bring various new applications/technologies like artificial intelligence, quantum computing, virtual reality, etc. The Government of India has been keen to launch 5G as it has initiated 5G use-case trials, and is likely to auction 5G spectrum in the first quarter of 2020-21.
5G promises data rates 100x that of 4G, network latency of under one milli second, supports one million devices/sq km, and 99.99 percent availability of the network. 5G will generate data at an unprecedented velocity and immense volume. This fast data will fuel a wide range of data-driven services and digital business models.
5G will unleash new business opportunities, and bring substantial benefits through increased productivity, improvement in service delivery, optimum use of scarce resources, as well as creation of new jobs. It is predicted to create a cumulative economic impact of USD 1 trillion in India by 2035.
Globally, by 2020, 5G is expected to reach full capacity. There is a vast multitude of use cases that 5G will unleash like Industry 4.0, precision agriculture, smart cities, logistics, manufacturing, medical science, smart homes, quantum computing, etc.
5G-based services and applications would require a ubiquitous and all-pervasive 5G infrastructure, wherein macro cells would have to be supported by a large number of small cells. Enhancement of the scope of IP-1, so as to include active infrastructure sharing, would augur well for the telecom industry at this juncture as telecom infrastructure requires huge CapEx, and infrastructure providers with their unique model of transparent and non-discriminatory sharing, are best placed to attract further investments into the telecom sector. Although the scope enhancement to active infrastructure sharing has been agreed in principle, through the notified National Digital Communication Policy, we believe that it would be implemented as well this year, which would give an impetus to 5G rollout.
With a speed of almost 100 times of a 4G network, it would not be possible to support such a high bandwidth over the MW network. Hence, fiberization is a must for 5G. Secondly, the line of sight would not be available for small cells, which would necessitate their fiberization. As of now, only 31 percent of the towers are fiberized. NDCP 2018 recognizes this aspect and has notified several enabling measures like fiber-first initiative, according telecom optic fiber cable the status of public utility, amendment in National Building Code, etc., to achieve the desired fiberization.
The Government of India has taken several policy measures in 2019, which will start paying dividends in 2020. The government has launched Broadband Readiness Index which will measure states’ readiness to support telecom infrastructure and ease of doing telecom business in a state. The first report is likely to be published in 2020. Another initiative is National Broadband Mission, which has a vision of broadband for all, and aspires to achieve 50 mbps speed for every citizen by 2024. It has set up targets of 50 lakh RKm fiberization and 15 lakh towers by 2024. The phase-wise implementation, envisaged under National Broadband Mission, is as under:
Other supportive measures like alignment of states’ telecom infrastructure with right-of-way rules, permitting bulk approval of small cells and mandating common telecom infrastructure on new civil infrastructure like highway, roads, canals and utilities (gas, electricity, and water) would also benefit 5G rollout immensely.
Besides these, measures like inside building infrastructure in large MDUs, buildings, and promulgation of guidelines to use street furniture for 5G would also assist in 5G rollout.
5G launch would provide huge business opportunity to telecom infrastructure providers. We believe infrastructure providers would continue to play a strong role in creation of a robust telecom infrastructure in 2020, and thus support a vast number of various types of new services and applications over the telecom network.