During the past year, the vendor community undertook several key initiatives to support the giant leap towards 5G. Network upgradation, 5G trials, densification of 5G backhaul and infrastructure augmentation were some of these. In addition, the launch of the production-linked incentive (PLI)/design-linked incentive (DLI) schemes had a significant impact on production capacity. Leading telecom network, equipment and technology vendors share their views on the performance of the sector in 2022, the key measures taken during the year, the opportunities presented by the evolving 5G ecosystem, the likely impact of the PLI scheme on domestic manufacturing and the future outlook…
How has the year 2022 been for players in the telecom technology space? What have been the key business highlights for your company?
The year 2022 has been exciting for the telecom industry, especially in India, where we saw the launch of 5G in many parts of the country.
At Ciena, we ended the year on a positive note and feel confident about what lies ahead in 2023. Despite the supply-side volatility, we see robust demand across segments, regions and applications. In 2022, we enhanced our routing and switching portfolio and benefited from the addition of Vyatta Solutions and organic portfolio enhancements. In the fourth quarter, we also reached a milestone of over 200 adaptive IP customers, fuelled by momentum in coherent routing, metro aggregation, passive optical network (PON) and high speed business services. In addition, we recently announced the acquisition of Benu Networks and Tibit Communications to enable us to offer fully integrated broadband access solutions that combine routing, subscriber management and PON features and functionality, to address residential broadband, enterprise business services and fixed wireless access use cases. In India, Ciena added additional manufacturing capacity for our routing and switching portfolio, in support of the government’s Make in India initiative.
The year 2022 has been a landmark year for the telecom sector, with the 5G roll-out being the highlight, followed by
evolving consumption patterns, increasing mobile penetration and distributed enterprises amping up the virtualisation of their processes and workflow. Today, a connected ecosystem of 1.17 billion subscribers and digitally integrated enterprises, sectors and government organisations make India’s telecom sector the second largest globally. Significant policy and structural reforms were implemented in 2022, cementing the government’s support for a thriving telecom industry. Most importantly, the amalgamation of telecommunication services with service industries and tech enablers, such as internet of things (IoT), 5G and private networks, have redefined the sector from being a “service provider” to a “service enabler”.
With hybrid work becoming commonplace, today’s networks support unpredictable traffic volumes and connected mobile and IoT devices. To be able to manage this, the industry needs bandwidth scale, density, energy efficiency, software modularity and open architectures with zero-touch and zero-trust networks to help this digital ecosystem succeed securely. At Cisco, we are helping communication service providers and web-scale companies around the world connect, secure and automate their networks to deliver internet to everyone, everywhere, regardless of geographic barriers. Our 5G network architecture and ecosystem are designed to address the challenges of tomorrow and deliver secure, intelligent and connected services through the next generation of smart devices, applications and ecosystems.
Cisco is already working with service providers in India to get their networks 5G-ready by building the internet of the future. In India, we are partnering with telecom service providers (TSPs) to help prepare their networks for the 5G era and bring benefits to more users and enterprises. To revolutionise healthcare, we partnered with Bharti Airtel and Apollo to develop a 5G-connected ambulance, equipped with advanced medical equipment, patient monitoring systems and telemetry devices that transmit real-time patient health data to the hospital.
It has been a remarkable 2022 for the telecom sector, with the launch of The 5G services being the biggest headline of the year. 5G spectrum auction itself made headlines by garnering the highest-ever auction proceeds from a single auction, amounting to Rs 1.5 trillion ($19 billion). Telecom stood out as the third largest sector in terms of foreign direct investment. India emerged as one of the top data consuming nations across the globe. The average data per user per month in India grew 3x in the past five years and reached 17 GB per user per month, as per the the Nokia MBiT Report 2022. It is expected to grow significantly in the coming years with 5G adoption.
Talking about Nokia’s business highlights in India in 2022, we closed over 100 deals, including deals with internet service providers (ISPs), enterprises, web-scalers and CSPs – with the Reliance Jio and Bharti deals to be their 5G/new radio (NR) radio access network (RAN) supplier being the major ones. We rolled out over 200,000 sites including new deployments, expansions, relocations, etc., across our customer networks for 4G/ LTE and 5G. We are partnering with Alstom to deliver a private wireless network for the National Capital Region Transport Corporation’s Delhi-Meerut regional rapid transit system.
The year 2022 was an eventful one for the Indian telecom industry. Post-Covid, telecom services have emerged as an
essential utility for Indian consumers, who are now increasingly relying on the internet for work, education, socialising and entertainment. These trends have resulted in a continuing surge in data traffic on telecom networks with the average monthly data usage per subscriber touching nearly 20 GB in 2022. The launch of 5G services in the second half of 2022 is expected to further accelerate this growth trend in the coming years.
The year also witnessed a rise in demand for new home broadband connections based on fibre-to-the-home/office (FTTx) technologies in both cities and small towns. The growth in data and broadband traffic drove higher investments by telcos in dense wavelength division multiplexing (DWDM) and optical transport network (OTN) technologies to augment capacities in their metro and long-haul networks, even as they continued to focus on cell tower fiberisation and densification to ensure high quality 5G backhaul infrastructure. The Department of Telecommunications’ (DoT) recent amendments to the right-of-way rules are expected to significantly speed up 5G and FTTx roll-outs in the country.
At Tejas, our vision is to create a global-scale, end-to-end telecom product original equipment manufacturer (OEM) from India. In order to achieve this, we accelerated our investments in next-generation wireless and wireline technologies and increased our research and development (R&D) strength by more than 50 per cent this year. Further, in 2022, we acquired a majority stake in Saankhya Labs, a Bengaluru-based start-up, to accelerate our 5G programme and enhance our capabilities in adjacent technology segments such as 5G broadcast, satellite, IoT and semiconductor chip design. The company successfully launched and completed proof-of-concept field trials of our 4G/5G RAN product with a leading public sector operator, which significantly expands our global addressable market. Our innovative TJ1400 ultra-converged broadband access product, which combines packet-optical transport technologies with high speed fibre broadband (GPON/10G-PON), mobile broadband (4G/5G LTE/NR) and active Ethernet technologies in a single chassis, won multiple national and international awards in 2022. From a business standpoint, in 2022, we saw a significant increase in orders from both the domestic and international markets for the full range of our products covering optical networking, packet switching and broadband access. Recent geopolitical developments and growing cybersecurity concerns have created a market pull for trusted equipment worldwide, and our company, with the strong financial backing of the Tata Group, is well positioned to benefit from this trend.
What opportunities has the 5G roll-out opened up? What initiatives have you taken to tap the 5G opportunity?
According to the Telecom Regulatory Authority of India (TRAI), 5G is likely to bring about a massive economic impact of $1 trillion by 2035. In fact, it is estimated that the Indian telecom industry is expected to grow by $12.5 billion every three years and the market for augmented reality (AR)/virtual reality (VR) technologies is likely to reach $1.6 billion by 2025.
By the year 2023, CSPs will work to deliver on the 5G promise by accelerating their process of modernising operations and networks, from architecture to use cases, and from inventory systems to edge cloud and core.
5G will bring about a radical change in several industries in different areas such as agriculture, education, health, transport, and media and entertainment. For example, Ciena and telecom tower company American Tower Corporation have been testing a proof of concept in Europe to advance open standards for private 5G, which will help to further extend 5G’s use cases by configuring networks in a way that can be easily implemented across many industries and environments in the future – from factories to university campuses to hospitals.
With the successful 5G roll-out in India, the telecom sector is now poised to unleash new growth opportunities for businesses and consumers alike. In an era of hyperconnectivity, 5G is emerging as the frontrunner for change. Investments in 5G are expected to contribute $450 billion to the Indian economy by connecting rural India with the urban landscape through the government’s BharatNet scheme. It will facilitate ground-breaking use cases across healthcare, education, finance, agriculture and manufacturing, along with narrowing gaps that can hinder productivity and growth. It can also support complex applications of other emerging technologies such as IoT, AR/VR, artificial intelligence (AI), big data analytics and more.
As we work with TSPs across the nation to reinvent the 5G network to make it predictive, simplified and trustworthy, we are also further simplifying the constructs of the internet with our Routed Optical Networking solution aimed at collapsing IP and optical networks. With Acacia’s pluggable coherent optics, advancements in segment routing and ethernet VPN and the new Cisco Crosswork Cloud capabilities, operators can build lean, efficient, easy-to-operate networks capable of supporting traffic levels expected with 5G. This will ensure that 5G services facilitate ubiquitous connectivity, resulting in a significant increase in throughput, lower latency and improved spectrum utilisation.
5G, along with complementing technologies such as AI/machine learning (ML), AR/VR and edge computing will open new opportunities in segments such as automotive, energy, agriculture, healthcare, manufacturing, education and public transport, among others. It will help physical industries bridge the productivity gap between them and digital industries, while laying the foundation for a connected digital society in India.
Nokia has been preparing quite in advance to tap the 5G opportunity in the country. We launched a first-of-its-kind 5G certification programme in partnership with NIIT Corporation for individuals and organisations to help them train and prepare for the 5G era. Our global delivery centres in Chennai and Noida are leveraging their global experience in 5G network deployment and operations to support 5G deployments in India. Further, our digital design and deployment capabilities offer a faster, more sustainable and higher quality network roll-out. We ramped up the manufacturing capacity of our Chennai factory to keep up with the demand for 5G radio equipment in the country as the roll-out continues at a brisk pace. We strengthened the R&D workforce at our Bengaluru global R&D centre, which is working closely with ecosystem start-ups and academia to develop India-specific 5G use cases. Further, we partnered with the Indian Institute of Science (IISc), Bengaluru, to establish the Networked Robotics Centre of Excellence at IISc to conduct research on 5G and develop use cases.
While the launch of 5G services in India was an important event in 2022, the true potential of 5G is yet to be fully realised. Besides offering a faster-than-4G connection, 5G introduces several new capabilities such as support for machine-to-machine (M2M) services (also referred to as IoT), ultra-reliable low-latency communications and network slicing, which enable a wide range of industrial and enterprise use cases in manufacturing, healthcare, education, agriculture and critical infrastructure sectors, with a cumulative GDP contribution of over $1 trillion by 2035. Moreover, unlike previous mobile technology generations that required a tightly coupled RAN and core solution, 5G allows an open, disaggregated RAN architecture with a cloud-native core. This permits service providers to adopt an “unbundled” approach, thereby expanding access and opportunities for newer RAN and core vendors to participate in upcoming 5G roll-outs.
Tejas is focused on creating end-to-end wireless and wireline products for telecom customers deploying 5G networks worldwide. Our company, along with its subsidiary Saankhya Labs, has already launched a diverse range of high-power 5G radio units operating in multiple frequency bands, supporting both time division duplex and frequency division duplex multiplexing technologies while delivering advanced features such as massive multiple-input-multiple-output (MIMO), 5G broadcasting and software-defined radio designs. Tejas is currently one of the few telecom equipment companies in the world to offer both 3GPP and O-RAN-compliant products for 5G RAN. Our TJ1400 UCB is the world’s first product to converge 4G/5G RAN, GPON/XGS-PON OLT for fibre broadband access and MPLS-TP/IP/MPLS-based 4G/5G backhaul functions in a compact, low-power shelf. We have successfully completed the proof of concept for the 4G/LTE version of this product and are well positioned to win large orders in the coming years.
What impact will the extension of PLI to telecom equipment have on the domestic manufacturing landscape? What other steps can be taken to scale up telecom manufacturing in India?
Ciena supports the government of India’s ‘Digital Bharat’ and ‘Make in India’ vision. We have enhanced the manufacturing capacity for our routing and switching portfolio in India. The fact that these are designed, engineered, and being manufactured in India is a matter of pride for us.
Over 15 years of presence in India has armed us with geographic expertise and valuable local knowledge about the needs of customers here. It is precisely what drives the R&D at our state-of-the-art testing and research facility in Haryana. Local manufacturing can potentially help us accelerate our delivery schedules, contributing to a better customer experience.
Nokia fully supports the PLI scheme designed to accelerate domestic manufacturing of telecom and networking products in the country and establish India as a global manufacturing hub. From being the first to manufacture 5G NR in India to producing 5G massive MIMO products, it demonstrates our manufacturing capabilities and our belief in India’s skill and talent to produce best-in-class equipment. Nokia is one of the major investors and producers under the PLI scheme and has successfully achieved its target for the first year of the programme. Recently, DoT approved 42 companies for receiving benefits under the design-led PLI scheme, sometimes referred to as PLI 2.0, for manufacturing telecom and networking products. Nokia is part of PLI 2.0 as well.
However, additional measures such as providing greater access to global manufacturers/OEMs, reducing import duties on silicon components where there is minimal local production at present, increasing ease of business in telecom product certification and approvals for faster time-to-market, etc. would help further boost telecom manufacturing in India.
As a leading global economy, it is important for India to have full technological control on all critical technologies and products that are used to build telecom networks. The PLI scheme for telecom and networking equipment is an excellent scheme that is expected to give a massive boost to indigenous telecom R&D and manufacturing. In particular, the recent addition of DLI will encourage design-led manufacturing in the country, which is critical to increase domestic value addition, enhance self-reliance and strengthen national security. We are delighted to be one of the 17 applicants to have received approval under the PLI/DLI scheme in 2022. We strongly believe that the government’s forward-looking policies, such as PLI, Make in India, Trusted Sources Mandate and the Telecom Technology Development Fund, if effectively implemented, will help the country achieve “atmanirbharta” in telecom products in the coming years.
What are the opportunities emerging in the Indian telecom space in 2023 and beyond?
We expect network and cloud evolving rapidly and fundamental shifts in network innovations to ramp up considerably this year. These activities will drive Industry 4.0 and innovative new services based on edge cloud, IoT and more. With respect to bandwidth demand, we are very confident that the fundamental drivers, including 5G, cloud and automation, are durable over the long term. Demand for bandwidth globally continues to grow at outsized rates, regardless of macroeconomic conditions, and major web scalers play an increasingly pivotal role in the telecom sector. Enterprises continue to adopt a cloud-first approach and are investing in hybrid cloud deployments. Based on these drivers in network investment, we continue to see a strong demand for networking products and automation solutions in 2023 and beyond.
While roll-outs continue unabated, service providers will need to accelerate their investments to add capacity and service agility to their metro and edge networks using access and aggregation technology to remain competitive. This is particularly the case as we are expecting more fixed wireless access (FWA) services from mobile network operators that will further increase competition and innovation.
Another key opportunity is in the area of network sustainability and helping our customers provide connectivity more efficiently. At Ciena, we continue to innovate and deliver product advancements that drive power and energy savings.
To support the growing demand for digital services, telcos must move beyond connectivity in 2023 and lead digitisation from the front. According to the Indian Cellular and Electronics Association, more than 50 cities and towns in the country are now using 5G and it is expected that by the end of 2023, 75-80 per cent of new smartphones will be 5G enabled. While 5G will create new opportunities and use cases with emerging technologies such as IoT, cloud, edge and metaverse, enabling a connected future, it will also disproportionately increase the attack surface. To facilitate visibility and management of distributed networks, service providers must build a robust, integrated and automated cybersecurity architecture to ensure agility and intelligence in threat remediation.
It is expected that next-generation digital services will alter the way consumers connect, how enterprises digitalise their businesses, how citizens consume government services and how service providers connect future communication needs with current network transformations. A wide range of new applications and use cases will be enabled by 5G, including self-driving cars, remote surgery, M2M communications and smart cities. To bring these use cases to life, telcos must evolve from being simple bandwidth providers to delivering platform, security, analytics and other services to businesses and become true digital value players. A more immersive world is about to arise and we believe service providers will spearhead digitisation for businesses across industries.
In 2023, the telecom space in India will be ruled primarily by 5G and the emerging opportunities that we foresee for 2023 would include:
- Fixed wireless access: FWA as an alternative to fixed broadband and for providing high speed connectivity in remote areas and locations where fibre laying is not feasible.
- Video: Video applications are already very popular and 5G brings significant improvements to enhance the overall experience.
- Immersive experience: Low latency and seamless experience for AR/VR and cloud gaming.
- Smart venues: Live video streams, AR displays, 3D hologram footage for sports events, concerts, festivals, etc.
- Industry 4.0: Enterprises can implement a wide range of Industry 4.0 applications and use cases with private wireless and network slicing as enablers. Purpose-designed networks will drive growth while making businesses more productive, adaptable and resilient.
The launch of 5G services is expected to unleash a multi-year capital expenditure cycle in both wireless and wireline infrastructure in 2023 and beyond. With the mobile broadband market getting saturated rapidly, telcos and ISPs in India are launching multi-gigabit FTTx services, which are expected to increase the number of wired broadband subscribers to 100 million by 2027. In 2022, Tejas was ranked among the top 10 GPON OLT companies in the world and was selected as a supplier by leading Indian service providers for their pan-Indian FTTx roll-outs, which will continue to gain pace in 2023 and beyond. Both private and public sector operators will continue to augment the capacities of their metro and backbone optical networks to cater to the exponential traffic surge resulting from ongoing 5G roll-outs, large-scale enterprise digital transformation and rise in hyperscale data centres. Our innovative solutions such as 100G/100G+ alien wavelengths, micro-OTN with edge grooming, multi-terabit OTN cross-connects and advanced metro DWDM products supporting 1.2T wavelengths with sophisticated flex-grid reconfigurable optical add-drop multiplexer functionality are being widely adopted by customers to efficiently manage this bandwidth surge.