Interview with Akhil Gupta: “The 5G landscape has evolved very well in India”

The Indian telecom sector has witnessed several important developments during the past year, marked by the passing of the much-anticipated Telecommunications Act, 2023, as well as evolving growth dynamics and significant technological advancements. With the recent conclusion of the 5G spectrum auction, India is poised to unlock a wide range of opportunities across the telecom domain. Akhil Gupta, vice chairman, Bharti Enterprises, discusses the evolution of the sector, the key growth drivers, the major challenges and the way ahead for the sector…

How would you assess the progress in the telecom sector over the past one year? What have been the key milestones?

During the past one year, the telecom sector in India has undergone significant transformation and progress by way of deep proliferation of 5G across the country. The key milestone achieved by the industry last year is making 5G services available in over 75-80 per cent of the geography and getting a very significant amount of data traffic offloaded to 5G. With this, India has become one of the largest countries globally with regard to 5G networks.

What are your views on the new Telecommunications Act, 2023? How will it impact the sector?

The new Telecommunications Act, 2023 will have a far-reaching impact on the sector in times to come. One of the main reasons for this is the vesting of power regarding framing of rules for RoW and other operational matters with the central government. This will bring much-needed uniformity across the nation with respect to rules and norms for telecom services and telecom-related infrastructure. These would help in removing hurdles and result in quicker roll-out of networks.

How is the 5G landscape evolving in the country? What are the key gaps? What is the future outlook?

As mentioned earlier, the 5G landscape has evolved very well in India. There are still some gaps – particularly due to lesser propagation of higher spectrum being used for 5G. However, such gaps – both in terms of overall coverage as well as in geographies where 5G has been rolled out – are being plugged rapidly. I believe that by next year, we should have virtually seamless 5G networks across the country and data traffic will increasingly move to 5G with the availability of more and more 5G-enabled smartphones.

What are the key sector challenges that remain unaddressed?

While most of the difficult issues facing the industry have been sorted out, the key challenge that remains before the industry is very low returns on capital employed (ROCE) despite the recent increase in tariffs. We all are aware that telecom as an industry needs continuous and large capital deployments for network roll-outs as well as the implementation of new technologies. This is only possible when the financial health of the sector is good and robust. I believe that for an acceptable situation vis-à-vis the ROCE required for the sector, ARPUs will need to rise to at least Rs 300 per customer per month in the foreseeable future.

“The new Telecommunications Act, 2023 will have a farreaching impact on the sector in times to come.”

Going forward, what will be the key focus areas for telcos in the next two years? What are the key trends that will shape the sector?

The key focus areas for telcos in the next two years will have to be quality of networks – especially 5G coverage and capacity. With rapidly increasing availability of 5G smartphones, a very significant percentage of data traffic will have to move to 5G from 4G. Another key trend that would shape the sector will be home broadband – both fibre-to-the-home (FTTH) and FWA – on 5G. Considering the impediments in the widespread roll-out of FTTH across the country, I believe that FWA could become a very strong use case for 5G, and enable rapid and deep proliferation of broadband to Indian homes. This would be particularly important for households outside the main cities where FTTH roll-outs would become very difficult and uneconomical.