Despite the Indian telecom operators’ struggle with mounting debt, declining profits and increased competition during 2017, the year was phenomenal for the country’s evolving internet and broadband landscape. Mobile data consumption in India surpassed that in the US and China. India also became the world’s second largest smartphone market after China, with over 40 million mobile units shipped during the quarter ended September 2017. The launch of low-cost 4G phones coupled with affordable data tariffs has also spurred data uptake in the country. Reportedly, mobile devices accounted for 70 per cent of internet usage, in terms of time, in 2017.
As operators got busy with aggressive 4G roll-outs, the state governments took significant initiatives in the Wi-Fi space. Further, making voice calls over data networks became a reality with the commercial launch of voice over long term evolution (VoLTE) services. Currently, Reliance Jio Infocomm Limited (RJIL) and Bharti Airtel are the two operators offering these services.
Even as 4G remained the key growth area for operators, they undertook a few pilots for 5G technology as well. The Department of Telecommunications formed a committee to prepare action plans for 5G roll-out. The technology has the potential to bridge the digital divide in the country.
The year 2017 ended on a high note for the internet and broadband segment as the government’s ambitious fibre roll-out project, BharatNet, finally completed its Phase I. Around 100,000 gram panchayats in the country are now internet enabled. This may also boost the country’s wireline internet segment, where penetration has remained low.
tele.net presents the key trends in the broadband segment during 2017 and the outlook for 2018…
4G goes mainstream
Telecom operators in India made significant advancements in 4G during 2017. The industry witnessed aggressive 4G roll-outs owing to increased competition. For instance, Bharti Airtel reportedly installed one new 4G site every 90 minutes in its Gujarat circle during the latter half of 2017. Meanwhile, 4G uptake has been equally overwhelming driven by improved coverage, affordable data tariffs and increasing smartphone penetration. As per the Telecom Regulatory Authority of India’s (TRAI) performance indicator report, 4G data usage stood at 4,356,202 TB as of the quarter ended September 2017 as compared to 271,319 TB a year ago. Moreover, 4G accounted for 80 per cent of the total data usage during the quarter under consideration. That said, poor network quality and slow average data speeds continue to plague the segment.
In 2018, operators will have to take performance enhancement measures in a bid to improve data speeds and 4G network quality and introduce innovative data offerings. As per the Ericsson Mobility report, a rise in low-cost offerings will make 4G technology more attractive for users.
VoLTE takes off
The past year also saw VoLTE or 4G voice services gaining traction. RJIL became the pioneer in this space with the roll-out of its LTE network in September 2016. Through its VoLTE network, the operator offers better quality of service, shorter call set-up time and faster data sessions. Further, a VoLTE network enables free voice calling as voice can be transmitted using data packets.
The year 2017 marked Bharti Airtel’s foray into the VoLTE space. By the end of the year, these services were available across Tamil Nadu, Karnataka, Andhra Pradesh, Telangana, Mumbai, Maharashtra, Goa, Gujarat, Madhya Pradesh and Chhattisgarh. The operator will continue enhancing its VoLTE service coverage in 2018. Besides, the coming year will see much more action in this space as Idea Cellular, Bharat Sanchar Nigam Limited (BSNL) and Vodafone India are also firming up their service launch plans.
Public Wi-Fi gains traction
While public Wi-Fi has been a key delivery model for data services across many countries, its role in building digital infrastructure in India has been limited so far. That said, significant activity in this space was recorded during 2017, as state governments gave a push to Wi-Fi hotspot deployments. For instance, the Maharashtra government installed hotspots across 500 locations in Mumbai. Meanwhile, the Telangana government installed over 1,000 Wi-Fi hotspots under its Hyderabad City Wi-Fi Project. The New Delhi Municipal Corporation in partnership with Mahanagar Telephone Nigam Limited also launched free Wi-Fi services in areas under its jurisdiction. The Uttar Pradesh government established free Wi-Fi public hotspots at 74 bus stations, while the Karnataka government installed Wi-Fi hotspots in Bangalore Metropolitan Transport Corporation buses. Further, the Tamil Nadu government is planning to invest Rs 100 million in the deployment of free Wi-Fi facilities in public spaces and another Rs 73 million in the creation of 45 “Amma Wi-Fi Zones” across Chennai.
In addition, telecom operators increased their involvement in the public Wi-Fi space. Bharti Airtel partnered with Facebook under the latter’s Express Wi-Fi initiative to deploy 20,000 hotspots across the country. Further, RJIL partnered with Nagpur University as well as with all engineering colleges, industrial training institutes and polytechnics under the Punjab government to provide free Wi-Fi services. BSNL also collaborated with the Kerala government to install 10,000 hotspots at government-owned schools in the state.
Currently, the country has around 40,000 Wi-Fi hotspots, and the number is likely to double by the end of 2018. Moreover, the government’s plans to facilitate the setting up of as many as 700,000 public internet hotpots in the next one year will also give a big fillip to the segment. The roll-out will be undertaken by operators and internet service providers (ISPs) and focus on users in semi-urban and rural areas, which are yet to come under the 4G net. Further, the government has announced support of Rs 36 billion through viability gap funding to operators for rolling out Wi-Fi in villages where hotspot deployments may not be commercially viable. The government is also looking into TRAI’s recommendations on introducing a new category of public data office aggregators that will not need a licence to deliver Wi-Fi services. This will allow shop owners and small entrepreneurs to lease bandwidth from various ISPs and resell it as data to consumers, particularly in rural areas at affordable rates.
Wireline holds promise
A country that is setting new records in data consumption has abysmally low wired internet penetration at 6-7 per cent. The average growth in wireline subscribers has been fairly low at 4-5 per cent a year. That said, the growing demand for high speed data particularly in homes, small enterprises, educational institutes and offices has made setting up a robust wireline network in India extremely crucial.
The fibre-to-the-home (FTTH) space has seen some deployments during 2017, but the pace has been rather slow. Notably, besides pure-play broadband service providers, telecom operators are getting involved in the segment in a big way. Bharti Airtel had introduced V-fibre technology for its broadband users in 2016 and a major part of 2017 was spent in enhancing its offerings around this technology such as the data rollover facility. The operator aims to provide speed of up to 100 Mbps to the existing users across its V-fibre network spanning over 90 cities. Meanwhile, RJIL plans to launch high speed FTTH broadband services in more than 30 cities by early 2018. The operator has already initiated FTTH beta trials in select areas of 10 cities. Reportedly, RJIL will bundle its television service with FTTH broadband to cater to more than 100 million TV households across cities, including those in the Tier II and Tier III categories. Meanwhile, Vodafone India is looking to strengthen its home broadband and enterprise portfolio. Through YOU Broadband, the company plans to provide wireline services to small and medium enterprises and start-ups.
The government’s BharatNet project will also give the much needed boost to the wireline broadband segment in India. Moreover, as the adoption of 5G technology gains momentum, a robust fibre-based backhaul network will be a critical requirement.
Case for E and V bands
Finally, in 2017, the government agreed to allocate spectrum in the E and V bands. The route for allocation, however, whether through auction or on a fixed fee model as suggested by TRAI, remains to be ascertained.
The industry has been pushing for spectrum allocation in these bands for some time now. Spectrum in these bands can lead to broadband proliferation in a country like India, which lacks dense and ubiquitous fibre connectivity. According to industry analysts, the E-band with its optical fibre-like capacity can prove to be extremely beneficial in a scenario where legacy networks seem inadequate for supporting the growing data demand. On these bands, data can be transmitted at a speed of around 1 GB per second. Experts also believe that spectrum in these bands will be crucial for developing a 5G ecosystem given the scarcity of fibre backhaul in the country.
Going forward
During 2018, the increased competition amongst telecom operators is expected to result in cheaper mobile data tariffs, driving the surge in uptake. With several operators planning a foray into the VoLTE space, the service may finally take off in a big way. The Wi-Fi space will continue to register significant activity as state governments become serious about broadband as a strong medium for delivering e-governance services.
One of the important policy initiatives expected this year is spectrum allocation in the E and V bands for both backhaul and access. With the completion of BharatNet Phase I and rapid progress in Phase II, there is hope for a major revamp of the wireline broadband segment in the country.
