Indus Towers’ massive tower footprint and innovative operational strategies have helped it in leveraging new opportunities arising from India’s emerging digital ecosystem. The towerco is at the forefront of playing a key role in promising growth areas such as fibre, Wi-Fi and smart city solutions. In an interview with tele.net, Bimal Dayal, chief executive officer, Indus Towers Limited, shares his views on the emerging trends in the telecom infrastructure space, the new growth drivers and the business models…
What are the key focus areas for Indus Towers at present?
Growing our business through various channels, thereby ensuring improved connectivity for users across the country, is a key focus area for us. Other focus areas include enabling new business streams such as fibre, Wi-Fi, small cells, street furniture, billboards, surveillance, street light management, and enabling sensors. We have already collaborated with various state governments across the country to deploy smart solutions for building next-gen digital highways. With sustainability and environment at the core of all our initiatives, we have taken important steps to contribute towards Digital India and the Smart Cities Mission by building new-age infrastructure.
How is the merger of Bharti Infratel with Indus Towers progressing? What are the potential synergies and opportunities that you are looking at?
The merger is progressing well with approvals from the Competition Commission of India and the stock exchanges already in place. The National Company Law Tribunal (NCLT) has accepted the first motion petition. Now, approvals are pending from shareholders, creditors, the NCLT and finally the Department of Telecommunications, which is expected to give the go-ahead by the first quarter of 2020.
The merger will create a pan-Indian entity with over 160,000 towers, which will result in a more enhanced and robust ecosystem of cellular towers, yielding better network connectivity than ever before. An improved shareholding and capital structure will enhance returns and reduce holding company discount, thereby creating greater value for shareholders in the long run. It will also improve the new entity’s competitive strength and future business potential. We will realise cost efficiencies and productivity gains, which will reduce capital and operating expenses.
What are your views on the 4G roll-out in the country?
The 4G coverage in India is expected to cross the 90 per cent availability mark, in rural areas as well as across the country, in the next couple of years.
Today, one out of every three 4G users is living in rural areas, and this figure will grow significantly over the next couple of years. This growth in internet usage and particularly in 4G penetration in rural India is mainly driven by the proliferation of smartphones, the lowering of data costs and increasing household disposable incomes.
What are the new growth areas and business models that Indus Towers is exploring?
Several new requirements will emerge with faster transition to digital economy. The role of passive and associated infrastructure will become crucial with the densification of networks, as well as the high level of IoT-isation in industrial and other sectors such as logistics and transportation. Hosting multilayer sensors for various technologies emerging in unlicensed bands such as LoRA, 5G and ZIGBEE will play a major role.
The increased demand for data and the focus on digital initiatives such as Smart Cities have led to the emergence of fibre as the backbone of the new digital era. The government has proactively issued the National Digital Communications Policy (NDCP), 2018 for creating more opportunities for infra players such as Indus. Digital infrastructure and urban infrastructure are seen to be converging in the new era.
The non-telecom growth areas such as Wi-Fi monetisation, advertisements through variable messaging displays, and the provision of location-specific kiosks for transactions and electric vehicle charging stations are opening up new business opportunities.
Indus is actively involved in the government’s Smart Cities Mission. What has been the company’s experience? What opportunities do you foresee in this space?
Indus Towers has pioneered the public-private partnership (PPP) model in smart cities with some of the finest installations in the heart of Delhi. We are helping municipalities in creating replicable models in the PPP mode that facilitate digital penetration and are sustainable at the same time. As opposed to the earlier model involving large-scale upfront capex, Indus has put in place the “here-and-now” revenue model, thereby removing uncertainties and enabling successful execution.
There are two models as far as smart cities are concerned: the ultra urban model such as Delhi and the urban model such as Vadodara. Indus has contributed in both these areas.
Is the country on track for 5G launch? What could be the possible hurdles?
India is gearing up for the launch of 5G and the 4G roll-out will be a stepping stone for the successful transition to 5G. 5G will have three use cases – enhanced broadband, massive IoT and mission-critical services with low latency.
With the notification of the NDCP 2018, the policy framework has been put in place. The NDCP 2018 is an overarching, forward-looking and reformative comprehensive policy for transforming India into a digital society by enabling the adoption of futuristic technologies.
Fiberisation is an important enabler for the smooth transition to 5G and it is picking up. 4G is already providing a boost to fiberisation. The country will see the last leg of fiberisation during the transition from 4G to 5G, and we will be playing a major role in this.
How has the company progressed on the diesel-free site campaign? What are the energy management initiatives being taken?
India is poised for the replacement of fossil fuel-powered vehicles with electric vehicles. This will be a positive change for the environment. If diesel vehicles can go off the roads, why can’t towers become diesel free? With the auto industry getting disrupted, there is a great amount of tailwind being created.
Indus Towers has adopted environment friendliness as one of its core values. Currently, we have converted 71,719 sites into green sites by removing diesel generators and installing advanced battery banks instead. We have reduced power consumption by retiring air conditioners. We have also implemented state-of-the-art energy efficient products, which enable maximum electricity board utilisation at lower voltages. Our future commitment is to go diesel-free by 2021 and we are working towards it.
Additionally, Indus Towers has partnered with Indian Oil Corporation for launching Fuel@doorstep, an initiative to deliver diesel at Indus’s telecom sites in Jaunpur through a fully automated and geofenced mobile dispenser. This initiative will be replicated in other regions.
What are the key enablers of growth going forward?
There are multiple growth enablers for us. The pace of fiberisation remains an opportunity. Next-gen infrastructure will comprise fibre-connected aesthetic infrastructure with provisions to accommodate public services. This will be possible through the PPP model, which will lead to innovation. The Indian tower industry is gradually moving beyond its traditional expertise of catering to small cells and Wi-Fi sites, which are the new investment hotspots. New business models are being developed to gain expertise in these areas and partnerships are being explored with Wi-Fi players, cable players and other emerging solution providers to power this next wave of growth.
What are your views on the NDCP 2018? How will it impact the telecom tower space?
The policy seeks to encourage active infra sharing by enhancing the scope of infrastructure providers and promoting the deployment of common shareable passive as well as active infrastructure for improving international connectivity and reducing the cost of international bandwidth.
The policy will help in bringing communication systems and services, which are essential components of connectivity infrastructure, at/on a par with other infrastructure segments such as roads, railways, ports, waterways and airlines. In the process, it will enable low-cost financing for the development of communication infrastructure. Through the NDCP 2018, the government plans to establish a National Broadband Mission – Rashtriya Broadband Abhiyan – for securing universal broadband access.
The NDCP 2018 will also increase the scope of our partnerships with municipal corporations and other local government bodies for the development of smart city elements, including the digital backhaul infrastructure necessary for offering smart city services.
Telecom is rapidly converging with digital. How do you see the role of telecom infrastructure providers changing in this scenario?
With 5G coming in, the role of telecom infrastructure providers will become even more critical than it is under 4G. Fibre will play an important role for 4G and more so for 5G. Here, tower companies can play a big role in connecting towers to transport networks and buildings. Providing white-labelled Wi-Fi within buildings and outdoors is another area that infrastructure companies can focus on. Small cell deployment will gain traction once we roll out fibre. Further, smart cities will need all these solutions.
What are your views on the possibility of a netco model emerging in India?
Sharing has worked well for the industry. We have seen tremendous opportunities through tower sharing and it has become a successful model. We are at the helm of fibre sharing, and we believe, anything that is of a less strategic advantage will be shared. And the benefits of this will accrue to the end customers. Hence, if netcos emerge as a method of extending benefits to the end-customers, we will certainly look at it. We welcome the regulator’s move to have enabled this in the NDCP 2018.