The first mobile call in India was made on July 31, 1995. Since then, we have come a long way, and it has been a great journey with several watershed moments. Privatisation, undoubtedly, has been one of the turning points for the Indian telecom industry. Indian private players went far and wide for tapping into the strength of India. Ensuring service affordability, expanding their reach to rural areas and packaging solutions for different customer segments have all been the hallmarks of private participation in the sector. Yet another thing that most private players have championed in the past two decades is the adaptability to new technologies and innovation.
In fact, it was this streak of innovation during 2004-05 that gave birth to an unprecedented concept of infrastructure sharing in telecom. Companies like Viom Network and American Tower started this concept in India. India was the pioneer of this outsourcing concept, which was later emulated in other countries. This remains the most unique Indian initiative, which led to the birth of a completely new industry of tower infrastructure providers. This is how players like Bharti Infratel, Reliance Infratel and Indus Towers came into being.
Of course, the benefits of such a model were many. Back in 2004-05, the cost of setting up a tower site was a whopping Rs 10 million, which came down to Rs 4 million per site as the industry matured. And today, it has come down to Rs 0.5 million. Sharing helped telecom players in containing their costs in a big way. The success of this model has been exemplary so much so that the telecom industry today is de-layered with the infrastructure industry on one side and the services industry on the other.
However, private players that helped Indian telecom become a sunshine sector are struggling today. Private sector investment in the industry has all dried up. The onus lies on the government to revive and facilitate private sector investments.
From what we see today, the industry is in a tight spot financially. It is important to understand that it is no longer just an operator industry. There are other players, too, which are equally important stakeholders in the telecom value chain, but their fate is linked to the fate of operators. Infrastructure players’ success is linked to that of telcos to a great extent. Thus, it is in their absolute interest that telcos succeed. In this scheme of things, there is no competition between telcos and towercos. In fact, the latter are only meeting the former’s expectations and making them more competitive. Telcos are attending to end consumers and towercos are attending to telcos through shared solutions, resulting in a win-win situation.
Collaboration, communication and decision making
To my mind, a collaborative view is crucial to help us tide over the current crisis in the telecom sector. I believe that collaboration and communication can lead us to the solution, even in the most contentious of matters. A case in point is the 1999-2000 era in Indian telecom, when the government took a very bold and visionary step of moving to a revenue sharing regime. This was probably a noteworthy instance when the entire industry adopted a collaborative approach and communicated in the same language. Obviously, it was understood by the government much better and much faster. Thus, collaboration and communication among industry stakeholders are key to proposing solutions to the government.
We are known for several bureaucratic issues in our system, which result in delays. For instance, the National Digital Communications Policy, 2018 is a powerful policy document and one that has been conceived after a lot of consensus building and consultation among the Department of Telecommunications, industry forums, specialist bodies, etc. But, its implementation has been tardy.
Today, we are sitting in 2020 and I see very little discussion around the scope of expansion of infrastructure providers’ role, tower fiberisation, creation of the National Digital Grid or the National Fibre Authority, and several other objectives underlined in the policy document. This policy has laid the roadmap for India to achieve the $1 trillion digital economy. It is important that it receives the level of seriousness it deserves.
Another example is the implementation of right-of-way (RoW) guidelines, which were notified in 2016. However, till date, only one third of the states have aligned their policies with the guidelines. Here, in addition to collaboration and communication, strong decision-making from the top becomes crucial. The government’s role as a facilitator requires it to take stringent action in such cases.
Similarly, Bharatnet is a project of national importance, but its progress has been disappointing. While the government is moving towards completing its target of connecting 250,000 gram panchayats, one has to consider how many of these are actually accessing high speed services over the network. Simply laying the digital highway will not help, it is crucial that the government facilitates services on these highways. To this end, an interesting concept of the Broadband Readiness Index (BRI) has been introduced by the government, wherein the states will compete on the reach and quality of broadband services. However, it is important that the government acts on the implementation of the BRI urgently.
Towards newer horizons – exploring growth areas
Technology is a harbinger of growth for all the sectors and industries today. We can take China’s example. The country that was behind us in the mid 60s is now decades ahead of us. All this has been made possible due to the country’s ability to rapidly deploy latest technology for people centric applications and march ahead.
In recent years, India has witnessed the emergence of mobile internet society. This convergence of mobile services with the internet can be seen as the most striking example of how technology became the key driver for the country. In this new digital society, people are using smartphones to see movies, pay their bills, look at maps, play games, etc. With the evolution of technology from 4G and LTE towards 5G, smart devices are becoming all pervasive, completely transforming all aspects of business, industry and society.
With the proliferation of data services, the focus is more on in-building than out-building connectivity. Thus, the digital indoor systems market will open up new avenues of growth and revenue for telecom companies.
The government impetus to “digital” continues to present huge opportunities. Smart cities are an example. Of the 100 cities identified under the programme, only a handful has taken off. There are still 80-85 smart cities that are yet to undertake a major digital transformation and thus open up opportunities for telecom infrastructure providers.
Taking cue from the smart cities initiative, the industry must now look at the “digital village” concept as well. The country’s hinterland is brimming with aspirational minds ready to get onto the technology bandwagon. Telcos and infrastructure providers must tap this huge potential offered by rural India. Further, from an infrastructure provider point of view, fiberisation and the creation of digital infrastructure continue to be big opportunities.
The industry is talking about 5G already. And, it is not a technology network that is similar to 4G. While 4G had to be all-encompassing, 5G will be an overlay for different applications. It is in the interest of the telecom infrastructure industry to ensure that all players become nimble-footed. The industry today is talking about inch-to-inch coverage and infrastructure players should work towards meeting such requirements. It is equally important that towercos do not get hamstrung by policy issues. In addition, there is a need for clarity on grey areas like what is active infrastructure and what is passive, what can be shared and what cannot.
Despite challenging times, I believe that the overall future of telecom in India will continue to be bright. The time has come that we as an industry broaden our horizons and transform from being telecom infrastructure providers to digital infrastructure providers.