The launch of next-generation services has increased operator focus on network management and upgradation since, going forward, quality of services will be a key differentiator for the success of services like 3G and wireless broadband. Brigadier Anil Tandan, chief technology officer at Idea Cellular, speaks to tele.net about the challenges in network rollouts, the company?s future plans and its 3G strategies. Excerpts?
What changes have taken place in the industry in the six months since the launch of 3G services?
3G services have been launched and so far, the uptake has been steady. Subscribers have migrated to 3G, depending on whether or not they own a 3G handset. Data uptake has increased at a very high rate. The number of 3G handsets has also risen with the launch of 3G services, and all major operators have started to focus more on data now.
What are the major challenges faced by operators in upgrading their network?
Augmenting the backhaul has been a major challenge in upgrading the network. The backhaul requirement in a 2G base transceiver station (BTS) is limited to 2E1 but with 3G, backhaul becomes a major requirement. The customer experience, apart from depending on the device owned by the user, would (to some extent) also depend on how much backhaul is available for carrying data. Upgrading the existing backhaul network to IP is both time consuming and poses various challenges in execution. The other challenges have been in upgrading the existing network to make it 3G-enabled and in the physical rollout of 3G BTSs.
What percentage of 2G networks have been upgraded to 3G for all operators?
By and large all operators would have upgraded their basic networks in order to handle 3G. However, the extent of 3G coverage varies for different operators. While some players have rolled out their 3G networks in only five-six towns in a circle, others have rolled out networks on a larger scale. Idea has opted for a different, more spread-out strategy. It is not just concentrating on the urban and metro areas but has decided to penetrate into semi-urban and rural circles as well. We have covered around 1,500 towns in 10 of the 11 circles where we own spectrum, and are not limiting ourselves to the major towns. These translate into about 10,000 3G sites as of now.
What are your future plans for increasing coverage in the future?
We plan to increase the number of towns covered to about 3,000 by March 2012.
In your opinion, is the currently available 5 MHz of spectrum sufficient, and for how long would it be so? Will more spectrum be freed up for operators?
Whether 5 MHz of spectrum will be sufficient and for how long is difficult to estimate as we do not know how much data uptake will increase. It would depend on the pace and quantum of data usage by subscribers. The availability of more spectrum would depend on when the existing users vacate the spectrum, and therefore, the timing would be critical. We expect the National Telecom Policy 2011 to provide clarity on this. I think the 5 MHz that is currently available is adequate for the present and, going by the 3G uptake and current outlook, will be sufficient for another couple of years.
Is Idea planning to adopt strategies for offloading data when demand picks up, using platforms like femto cells and Wi-Fi networks?
Yes, we are evaluating all the offload techniques available in the market. We haven?t finalised our plans but are actively working on them. We are definitely considering Wi-Fi, not just from the capacity point of view but also for improving in-building coverage.
Going forward, when and how do you think will the transition from 3G to 4G take place?
We are not really into 4G at present. I believe that we are still 8-12 months away from launch, as currently there is no ecosystem for it. India is likely to witness one of the first few LTE TDD network rollouts in the world. As the device market has not yet matured, the price of devices would be a constraint. Operators will have to decide whether they want to deploy 2G-4G-compatible devices or 3G-4G- compatible devices. 2G-3G-4G devices are likely to be very expensive.
Are you planning to set up new 2G sites?
In our leadership circles like Maharashtra, Madhya Pradesh, Uttar Pradesh (West) and Kerala, we will continue to roll out towers in areas where we do not have coverage. In some of the newer circles like West Bengal, the Northeast and Assam, where we launched services in 2009-10, we had a calibrated rollout approach initially. So we will look to expand in these circles as we go along. But the pace of the rollout will definitely not be what it was even two years back.
Has India?s passive infrastructure segment stagnated or will it witness growth going forward? Is it likely to achieve a tenancy ratio of 2 in the near future?
The bigger tower companies are closer to achieving a tenancy ratio of 2 as compared to the smaller players, which have a long way to go before achieving this. I believe that the top national operators such as Idea Cellular are the ones that would roll out networks in new areas while the later entrants would not venture into these regions. Second, there still exists growth potential in the 2G domain, which will lead to further development of passive infrastructure tenancies, though not of new towers. However, the rate of increase in the tenancy ratio would not be the same for all players or what had been predicted till a year ago. One of the reasons for this is the formation of inter- and intra-circle roaming (ICR) alliances. Service providers would prefer this route and in this case, they would not need to roll out new BTSs and could use someone else?s network.
In such a scenario, is consolidation likely to take place in the tower industry? If so, how many tower companies are expected to emerge?
Tower companies may opt for consolidation but there are likely to be some issues in this. The scale of tenancies has slowed down and, therefore, the business case for acquiring smaller tower companies would not be viable if the tenancy ratio is less than 1.5. Tower companies will have to evaluate which players have complementary assets in order to receive the real benefits of consolidation. However, smaller tower companies may merge and, eventually, three-four companies may remain after consolidation.
Going forward, quality of service is expected to be the main differentiating factor for customers. What meaures are you taking to improve the company?s service quality?
Constant optimisation of networks is the key to ensuring quality of service. We periodically evaluate the features being offered by the vendors and keep adding innovative offerings to improve network quality. The bigger challenge lies in ensuring better quality in terms of data as compared to voice. With regard to data, while a customer could be connected, the speed could be really slow due to low network quality. There are many elements that come into play in terms of data. Some of these factors can be handled in the operator?s domain while others cannot. So, at a particular site whose server is busy, while the operator may provide bandwidth, the application server may not respond in time, thereby impacting subscriber experience. Therefore, the focus should be on bringing about end-to-end quality improvement and enhancing customer experience. And obviously, we seek support from vendors with regard to end-to-end quality management.
What is the status of active infrastructure sharing? When do you see it taking off in the country?
Active infrastructure sharing was allowed by the government three years ago, but not much progress has been made in this area. The reason is that the capex saving is not very high in active sharing. Spectrum sharing is not allowed and so operators have to set up their own transmitter systems. Operators have seen that ICR alliances are a better way of reducing costs than active sharing. The company that has developed the infrastructure may not be utilising it to its full capacity; so it is advantageous to enter into ICR agreements as the company can get more revenue and the seeker operator doesn?t have to incur capex. However, once spectrum sharing is allowed in the country and the core network can be shared, active sharing may witness growth.
