There exists a vast difference between India’s rural and urban telecom markets with regard to customer reach and market dynamics. While the country has reached a teledensity of more than 100 per cent in urban areas, the teledensity in rural India is still low at 21-22 per cent.
The next wave of growth is expected to come from the rural markets and operators are increasingly targeting to tap the potential of these areas. However, several issues and challenges remain.
Over the past few years, tower companies have witnessed substantial growth.This trend strengthens the case for infrastructure sharing as a means to reduce capital and operating expenditure, in line with international practices.
The Universal Service Obligation (USO) Fund has ensured the implementation of infrastructure sharing. In the first phase of its tower sharing project, nearly 7,400 towers were shared amongst three operators to provide all habitations with a population of more than 2,000 with mobile coverage.
Thereafter, the attempt has been to reach out to even remoter areas with a population of less than 2,000. Today, operators such as Bharat Sanchar Nigam Limited (BSNL) and a few private players have covered over 450,000 of the country’s approximately 600,000 villages. While there is no doubt that a vast untapped market exists, the challenge lies in the fact that most of these villages are sparsely populated and have poor infrastructure facilities.
These issues need to be addressed urgently. It also needs to be examined whether the tried-and-tested approach is enough or clearer thinking is required on subjects such as increased subsidy.
A mix of solutions would help. The USO Fund, in the second phase of its tower sharing project, plans to address some of these concerns. But one must bear in mind that when the analysis for the project’s first phase was undertaken, most of the areas under consideration had a population of 5,000 or more. Going forward, the USO Fund plans to cover areas where a tower would serve two to three villages, with a total population of less than a thousand. In such areas, the subscriber base is unlikely to be more than 200 or 300.
Therefore, there is a need to develop and perfect various shared infrastructure models to reduce capex and energy costs.
A few initiatives have been undertaken towards this end. For instance, suppliers have been developing solutions to reduce the energy consumed by base transceiver stations (BTSs). Moreover, technologyrelated measures such as sharing of active infrastructure, shared backhaul and sharing of software between BTSs have to be implemented to a greater degree.
Using renewable energy sources is another solution. Since only a few operators have realised the potential of such technologies, their adoption has been limited. Typically, operators feel that high capex is a deterrent to using sources like photovoltaics (PVs). If so, the USO Fund is willing to step in and simplify the matter. Similarly, the Ministry of New and Renewable Energy has launched the National Solar Mission, which proposes to offer 30 per cent subsidy for solar PV panels for telecom installations to encourage the use of such energy sources.
Still, several telecom infrastructurerelated issues remain. For example, backhaul in rural areas is a lingering concern, which can be resolved to an extent by using microwave backhaul.
Also, the government has committed to providing broadband connectivity to 200,000-plus rural panchayats within three years. Since the majority of these areas can be reached only through wireless broadband, traffic is going to increase substantially, which will require more bandwidth. This issue needs to be addressed. So far, optic fibre cable (OFC)-based infrastructure has been used, which is fairly widespread, but sharing is limited. Going forward, sharing of the OFC network will also have to be done extensively in order to accommodate the growing bandwidth demands.
The USO Fund has undertaken a project to augment the OFC network in the Northeast, specifically Assam. We also intend to extend infrastructure support wherever required. Other initiatives undertaken by the USO Fund include installing a village public telephone in every village and supporting satellite phones in remote locations.
To sum up, the USO Fund’s initiatives in setting up telecom infrastructure in rural areas are aimed to ensure that shared mobile towers are constructed in all hitherto uncovered areas. The USO Fund aims to bridge the viability gap in capex and opex apart from resolving energy issues by using renewable energy in rural areas.
The USO Fund has supported a few pilot projects with regard to using solar and renewable energy solutions, and is augmenting other types of infrastructure such as an OFC backbone.
