Over the past two decades, towercos have played an incredible role in fuelling the growth of the Indian telecom sector. While initially revenue generation opportunities for towercos were limited, new avenues have now opened up in diverse fields such as smart cities, Wi-Fi services and data centres, etc. Bimal Dayal, chief executive officer, Indus Towers, shares his views on the evolution of the telecom tower space and the emerging opportunities for towercos in India. Excerpts…
How would you assess the performance of the Indian telecom sector in the past two decades, particularly in terms of the evolution of the telecom infrastructure space? What were some of the key developments?
The Indian telecommunication sector has undergone a revolutionary transition in the past two decades to become the world’s second largest telecommunication market with over 1 billion subscribers connected through 500,000-odd towers.
The Indian telecom tower industry has always been a critical backbone of telecom services and has taken the country from landlines in the early 2000s to 4G services in record time. It was in the late 1990s and early 2000s that mobile phones gained prominence. Such technologies needed vital infrastructure, and this is when the tower industry came into existence. The Department of Telecommunications invited applications for IP-I and IP-II registrations in the year 2000. Prior to that, telecom service providers (TSPs) were provisioning towers and other passive infrastructure on their own and the business model of towercos had not evolved. Pre 2005, there was minimal infrastructure sharing as towers operated under an integrated model. However, post 2005, telecom infrastructure providers started offering towers on lease/rent to TSPs for providing cellular telephone services by promoting “sharing of towers”.
Today, the industry is on a rebound and in a significantly short time, we will see investments coming into the sector. Additionally, wider availability, expanding 4G coverage, and the roll-out of mobile number portability have led to evolved consumption patterns.
How has the role of towercos changed over the years? What are some of the new revenue drivers that they are looking at?
At Indus Towers, we have had initial success in monetising some of the following ideas:
- Business as usual (BAU) telecom opportunities – 4G will continue to be rolled out and increase both coverage and data capacity in the next couple of years. Subsequently, the 5G network (which is yet-to-be launched) will further improve connectivity with high data rate, low latency and highly reliable communication.
- Tower adjacent opportunities – As towercos explore higher revenue streams, they can follow a multi-dimensional approach. The infrastructure demands of the sector are evolving and the towercos can leverage their expertise to explore adjacent opportunities that fit in with their core competency. Business streams such as fibre, small cells, Wi-Fi, smart cities, internet of things (IoT) and data centres are some such opportunities.
- New world opportunities – Sensors are the tool to retrieve data from all around us. These sensors can be placed on to one of the sites and accordingly live data can be provided to entities as well as the public. The sensor business model can serve well in places like Delhi with respect to pollution and the same technology can also be used for retrieving weather data during natural calamities. Information on parking lots and traffic violations, which is location dependent, presents another area of opportunity and can be enabled.
- Non–telecom opportunities – Infrastructure is currently a challenge for prospective buyers of electric vehicles (EVs). EV charging stations offer opportunities for tower companies, EV tenants and the public. Additionally, infrastructure for out of home (OOH) services has proven to be a promising business.
What were Indus’ achievements during 2019 and the key focus areas?
By touching the lives of 600 million people multiple times every day, Indus is dramatically increasing India’s teledensity and as a result its GDP. The company has presence in 15 telecom circles and has achieved over 232,924 tenancies till date. With the current count of over 125,649 towers, Indus has the widest coverage in India and is one of the largest telecom tower companies in the world.
Innovation has been in the DNA of Indus. The company has developed innovative, unique, highly scalable, next-gen tower portfolio at strategic locations across the country, and has also won multiple smart city contracts on the back of this innovative tower portfolio.
However, innovation is not just limited to our products and technologies but spans across our systems and processes. For example, Indus has deployed many industry-first solutions to enhance efficiency in business operations – be it in terms of safety parameters, employee engagement or customer and partner satisfaction, etc. We use a tool called the Indus Idea Incubator, a unique way of in-sourcing ideas and inculcating a creative and innovative thinking amongst employees.
We have inculcated the government’s efforts of supporting the environment in our operations through smart and innovative solutions in-order to fulfil our vision of “transforming lives by enabling communication”.
We are committed to excellence, ensuring best-in-class processes and a continuous improvement culture that provides reliability, scalability and highest quality at optimum cost. We have been the preferred partner to our customers with the highest levels of responsiveness and have been supportive and sensitive towards the environment and communities in which we operate. We will continue to focus on keeping India connected even in the face of natural disasters and adversity.
We consider it our privilege to be the pioneers in the sector and play a pivotal role in connecting and creating an inclusive India by “Putting India First”.
What are some of the key challenges before you? How is the current financial condition of service providers impacting business?
As the country is progressing towards further penetration of 4G and subsequent 5G roll-out, one of the barriers in India is the infrastructural gap. The industry is in constant engagement with the government to handle the same. According to the National Digital Communications Policy (NDCP) 2018, India currently has approximately 1.5 million kilometres of optical fibre cable. This calls for support from regulatory bodies for enabling uniform policies to obtain right of way (RoW), both at the central and state levels, to fulfil industry requirements and facilitate the execution of digital infrastructure services.
What initiatives has the company taken to promote sustainable telecom solutions? How has the company progressed on the diesel-free site campaign?
Efficient use of energy and sensitivity towards climate change are two of the core values adopted by Indus. These are also a part of its long-term goals of eliminating CO2 emissions from its operations and promoting alternative sources of energy.
Our operations have contributed to a significant reduction in diesel consumption over the past couple of years. We continue to focus on diesel reduction measures in all the circles where we operate.
Our constant endeavour is to not only provide an uninterrupted 24×7 service across India but to do so in the greenest possible manner. We have already converted 71,191 towers into green sites and are looking to progressively increase them further, shift from diesel to grid wherever possible and find innovative solutions to achieve a zero-carbon footprint.
We have worked in the space of power solution products, energy storage and diesel generator (DG) cranking, which present an opportunity for reducing equipment cost and lead to substantial improvements in efficiencies.
Do you have a regulatory wish list?
The telecom infrastructure industry is going to play a vital role in the government’s efforts to enhance the roll-out of 4G and subsequently 5G. To ensure that the environment is conducive for the growth of the industry, we look forward to the following steps:
- Availability of government land and building for the deployment of telecom infrastructure including in-building solutions (IBS) to all the telecom infrastructure providers and enabling citizen-centric services beyond telecom. This should be on a mandatory sharing basis to avoid duplication and to achieve the Digital India Mission.
- Availability of uninterrupted grid power at optimal rates to avoid diesel usage and a focus on green power.
- Conducive policy for digital infrastructure and leveraging other government infrastructure.
- Faster implementation of NDCP 2018 to connect India by enhancing the scope of IP 1s to create plug and play infrastructure (active and passive put together) for end service providers.
What will be the company’s growth plans and focus areas for the next two years?
Indus has pioneered the usage of multi-utility poles as towers in a public-private partnership model and has already executed a couple of smart city projects. We are exploring and experiencing success in the near tower adjacent, new world and non-telecom opportunities.
It would be prudent to state that Indus and Bharti Infratel’s merger is on the cards. Once the statutory approvals are received and the merger is complete, we look forward to a combined strength of both companies, and a footprint in every telecom circle of India.