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Interview with Tejinder Kalra, Chief Operating Officer, Indus Towers

March 08, 2017
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The increasing roll-out of 3G/4G networks has resulted in significant growth in the demand for new towers as well as tenancies on existing ones. Meanwhile, the increasing operator interest in rural areas to drive business growth has opened up new avenues for tower companies. The government’s Digital India programme and the Smart Cities Mission also require massive telecom infrastructural support, thus expanding the role of tower companies in the successful implementation of these initiatives. Indus Towers, with a portfolio of over 121,330 towers across the country, is well placed to leverage these opportunities. In an interview with tele.net, Tejinder Kalra, chief operating officer (COO), Indus Towers, talked about the key trends that dominated the telecom infrastructure space in 2016, the impact of the 4G roll-out on the company’s business, the energy management initiatives taken by the company as well as its future plans. Excerpts...

How has the telecom tower industry performed during the past year?

India has been witnessing steady economic growth over the past few years, which is expected to continue in the foreseeable future. One of the key factors behind this inclusive growth is the government’s initiatives to drive infrastructure development across sectors. The telecom sector has also seen unprecedented growth in the past couple of years due to a policy impetus and the explosive data demand. The availability of 4G spectrum in the recent auction and the entry of Reliance Jio Infocomm Limited as a new challenger in the market have intensified competition further. Meanwhile, telecom operators have fast-tracked their 3G and 4G network roll-outs to cater to the surge in demand and protect their market shares. As a result, the telecom tower industry too has been on an upward trajectory in 2016 and this trend will continue right through 2017 as well.

What are your views on the recently issued right-of-way (RoW) policy? What are the other areas that require regulatory/policy actions?

We welcome the RoW policy as we feel that this will streamline the regulatory framework that sometimes poses a roadblock to the installation of new telecom towers. Streamlined processes for regulatory approvals will eventually facilitate the ease of doing business for players in the telecom industry. In addition, the recent announcement by the Department of Telecommunications to draft a new telecom policy by April 2017 has been a notable one. The current telecom policy was framed in 2012 and there have been massive developments in the global telecom environment since then. Therefore, some of the guidelines in the National Telecom Policy, 2012 need a revisit to enable the Indian telecom industry to keep pace with global trends, cater to the requirements of next-generation technologies and ensure continued momentum.

What has been the impact of the 4G roll-out on the company’s business?

Government initiatives such as Make in India, Digital India and the Smart Cities Mission have generated massive opportunities for the entire telecom industry value chain. All these initiatives need a digital highway and mobile broadband connectivity through 3G and 4G. Thus, there is an opportunity for infrastructure providers like us to roll out telecom infrastructure in a planned manner in collaboration with telecom operators and the government. Meanwhile, spectrum liberalisation has allowed operators to roll out 4G and 3G services across multiple geographies to cater to the explosive data demand. This, in turn, has led to a surge in demand for telecom towers from all operators. Moreover, given the rapid growth in data demand and the intense competition amongst operators, there is a need to fiberise sites and provide in-building coverage. The telecom tower industry can participate in a big way to create this infrastructure on a shared basis.

What were the energy management initiatives taken by the company during the year?

The telecom infrastructure industry is undergoing a paradigm shift. There is a renewed focus on green technology and we are making efforts to become more socially responsible with a strong emphasis on sustainability. Indus Towers is reducing its dependence on diesel generators as the primary power source and has significantly brought down carbon emissions. Renewable energy technologies such as solar and wind are being used as long-term power solutions for telecom towers.

Apart from adopting renewable energy solutions, there is a strong focus on reducing energy consumption at tower sites. One of the accomplishments towards reducing power consumption at tower sites has been replacing air-conditioning units with free cooling units (FCUs) and solar cooling units (SCUs). Telecom equipment needs a temperature-controlled environment and, just like air conditioners, FCUs and SCUs also ensure heat transfer from the external surroundings to the shelter, but entail much lower energy consumption.

We have also taken steps to gradually make tower sites diesel-free. Sites where the dependence on diesel is eliminated are termed as “green towers” or “green sites” and today almost 50 per cent of Indus’s sites are green sites.

What are your views on consolidation in the telecom tower industry?

Due to the emergence of new and competitive service models, the telecom sector is already witnessing consolidation where mobile network operators and infrastructure providers are coming together to better utilise their spectrum and infrastructure. This will also expand network coverage and bring down infrastructure costs. The growth opportunity for telecom tower companies is substantial as mobile network operators increase their 4G reach and look forward to introducing new and faster technologies.

What are some of the innovative strategies that Indus has adopted for tower deployment?

Indus Towers is consistently working in line with its philosophy of “putting India first” while bringing in best-in-class technology innovation. With sustainability and environment at the core of all initiatives, coupled with the management’s approach of design thinking, the company is contributing to the Digital India and Smart Cities initiatives by building new-age infrastructure. With this focus of putting up a robust next-generation digital services network, we have launched a nationwide initiative of next-gen sites.

These are multi-functional towers that are aesthetic and merge well with the cityscape and location-specific architecture, have an 80-90 per cent lower footprint and ensure diesel-free power back-up. These towers can be in the form of camouflaged poles, camouflaged compact solutions, camouflaged palm trees, street furniture sites or multi-utility poles. These solutions have been designed to enable easier deployment in residential, industrial, commercial and public spaces, as well as enhance the possibility of installing towers at critical sites in key city hubs.

Indus Towers has already deployed over 100 such sites across India in cities such as Delhi-NCR, Mumbai, Pune, Hyderabad, Jaipur, Kolkata, Bengaluru, Mysore, Chennai, Chandigarh, Lucknow and Meerut.

What are the expansion plans of the company for the next financial year?

Given the explosive data growth, intense competition among telecom operators and government initiatives like Digital India and the Smart Cities Mission, we see huge opportunities for the telecom infrastructure industry and view this as a strong growth opportunity for Indus Towers. Currently, telecom networks are being rolled out for increasing data coverage and most of this is happening through the co-location of 3G and 4G sites with the existing 2G sites. However, with the increase in data uptake, there will soon be a need for additional 3G and 4G capacity sites on the networks, and this would lead to another surge in telecom site build-outs.

What is your outlook for the tower industry? What will be Indus Towers’ key focus areas in 2017?

According to industry estimates, the telecom tower industry is expected to grow at a compound annual growth rate of 3 per cent over the next five years. This growth will be fuelled by spectrum liberalisation for providing 4G services on lower bands across sub urban and rural areas, as well as by the government’s Digital India, Smart Cities Mission and Make in India initiatives. These initiatives will provide greater opportunities for tower operators like us. For example, the Digital India initiative envisages transforming India into a “knowledge economy”, which requires new infrastructure development to enable pan-Indian connectivity, and Indus Towers is committed to participate in the government’s initiative for inclusive growth.

 
 
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