The Telecom Test

With India under lockdown, online consumption has increased exponentially, thereby increasing the load on telecom infrastructure. Although there’s no official data yet on this, estimates suggest at least a 20 percent jump in online use since work from home became the new normal and virtual is the only meeting ground. In that backdrop, streaming services Netflix and Amazon’s Prime Video as well as social media majors such as Facebook announced that they were cutting data use to help telecom firms decongest their networks. While that’s a good move to help companies, governments, entrepreneurs, doctors, students, and many others to go about their business smoothly in the time of social distancing, telecom firms should treat the current crisis as a wakeup call for scaling up their overall infrastructure. More so, because around 70 percent of data consumption at home is estimated on the cellular network.

Surely, COVID-19 has come without any notice but the frailty of India’s telecom networks stands exposed as millions have turned to their home internet, both on landline broadband as well as mobiles. Call drop, which has been a menace for long, has seen a spike after the virus-linked lockdown. Data connectivity on mobile phones has also worsened. It’s true that an extended lockdown and work from home have translated into not just meetings through video-conference and financial transactions on digital mode, but also a very large viewership of films and shows streamed online. Social media usage too has zoomed, all leading to an unprecedented level of telecom network congestion. Even as bandwidth can be saved for other businesses by lowering the quality of video-streaming services and others, that’s a short-term measure to tide over an immediate problem. The telecom industry, with more than a billion mobile subscribers, should look at medium- and long-term strategies to invest significantly in infrastructure. And, the government should support the telcos in this mission, by allowing them to set up towers in areas where they haven’t gone so far. The government and the regulator must also review the base price for spectrum auction so that telcos are able to participate in the upcoming bidding process at a time when they are financially stressed and have to pay a sizable bill linked to adjusted gross revenue (AGR).

The industry association has already asked the government for additional spectrum to tide over the current hurdle. But that too won’t go too far in resolving the real problems in the telecom sector, especially when faced with a crisis like a nationwide lockdown. Around the world, countries have felt the data overload on the home internet and in that sense it’s not an India-specific problem at this point. But, with some of the leading telecom service providers in the country running into deep losses, it’s time to prepare for the future and that includes extra pressure on the infrastructure as is being witnessed currently. For that, they have to get out of the current financial mess — by rationalising tariffs and also through the support from the government and the judiciary where penalties and interests related to AGR dues are seen more pragmatically. Telcos should prepare in a way that the digital world does not collapse at a time when the physical world is grounded.

―Business Standard