How is the ongoing COVID-19 crisis likely to impact telcos’ business and revenues? What will be the positives and negatives?
As BIF, we believe that the Digital Communications sector has emerged as the only life-line for connecting people in the country, as well as globally, when social distancing/physical isolation is our only hope to prevent the spread of the COVID19. The sector is efficiently servicing the nation by powering key services – healthcare, banking, insurance, supply chains and many more in this crisis. This is to be a unique opportunity for India to leverage the enormous power of Digital Communications in addressing the COVID-19 outbreak situation and for sustaining the economic growth of the country.
Broadband connectivity now, is facilitating near-normal operations through the available digital communications services, especially permitting business continuity from homes rather than offices.
OTT and other Digital Service platforms are also playing an important role in providing and facilitating remote video and virtual connectivity solutions via various applications/platforms. In the present scenario, it would be nigh impossible for people to cope with mere audio connectivity options to sustain their official/business operations. A number of OTT service providers such as Skype, Google Hangouts, Microsoft TEAM, Zoom, etc. are facilitating quality solutions for remote participation and communications through virtual meetings/discussions. At the same time, entertainment content provided by applications such as Amazon Prime and Netflix are helping to keep people engaged inside their homes.
Mobile broadband being the primary source of connectivity across the majority of India, the high capacity utilisation of existing networks is likely to affect the quality of the services. In order to address this, we earnestly recommend that the Government considers adopting similar measures as that taken by the FCC (USA), whereby an extra spectrum boost could be provided to the TSPs to ensure full-scale broadband connectivity. Moreover, there is a substantial available quantity of the very efficient E and V band spectrum (also known as wireless fiber) lying idle, which should be allotted and put to use in this hour of need.
Are telcos’ networks prepared to cope with the surging data demand? What steps can be taken to further enhance network capacity?
The Government has already undertaken and implemented actions to counter this crisis on a war footing. BIF wishes to compliment the Government, especially the Communications and Finance Ministries for initiating a plethora of measures to ensure that seamless connectivity is provided to the citizens during this disruptive period, while at the same time introducing relief measures to mitigate the financial implications of the present crisis on the nation’s economy, the citizens, as well as the industry. The Government’s gesture in meeting and discussing the critical infrastructure and network requirements for the situation with the service providers and industry representatives; issuing directives to the State Governments to permit uninterrupted operations of all critical telecom infrastructure and allowing access of critical sites and access nodes for the field staff of telecom service providers/telecom infrastructure providers; seeking the cooperation of States for ensuring availability of power supply to critical telecom infrastructure; incentivizing of production of electronics including mobile phones and other digital communications devices to address the supply shortage; amongst many others, are all prudent and essential measures to help counter the ill-effects of the prevailing predicament.
The networks are fully operational and industry personnel are working 24×7 to maintain and provide uninterrupted service to the people, despite the immense pressure of the increased usage. However, for the same to be delivered optimally, it is imperative that the digital communications sector be treated as an essential service as advised by the Central Government, and access is provided to critical cell sites and access nodes at all times for continued O&M, even in the midst of the present lockdown situation. The challenge is to ensure that service providers/field staff face no issues in accessing and operating the required sites, since public panic has also led to people, especially communities, housing societies, apartments, etc. disallowing service personnel from entering the premises for the critical maintenance and enhancement of network services.
BIF is of the view that these are very difficult times for all and it is through the combined, cooperative and collaborative efforts of all stakeholders viz. the Government, the industry, as well as the consumers, that we shall be successful in dealing with the problem.
Although India stands as the second largest market for telecom users in the world today, the spectrum allocations to our service providers need to be provisioned likewise. Adequate and contiguous spectrum needs to be made available to the Service Providers critically and at reasonable rates, so as to enable them to deliver their services efficiently.
Secondly, only about 20 per cent of the telecom towers in India are presently fiber-connected, which limits the efficiency of the operations, especially in providing backhaul support. India needs to enhance its fiber connectivity, and this is the right time to do this expeditiously. Increased fiber connectivity will not only strengthen capacity, but will also enhance the quality of the services being delivered. Therefore, it is highly recommended that the government incentivises fibre rollouts and allocates fresh spectrum resources to the service providers urgently.
There are still over a billion Indians without access to the internet, and the vision is to accelerate the rollout of the access to internet to these people – most of who live in geographically remote and rural areas. In addition to speeding up the rollout of fiber that is facing delays due to right-of-way problems, enhancing the use of satellite broadband is key to reaching these people and areas, sooner and more effectively. Barring a few use-cases such as satellite backhaul or VSAT terminals, India has very little satellite broadband to speak of. There is necessity for satellite bandwidth capacity from domestic private enterprise to augment the existing capacity which is being provided through ISRO. Besides, there is nearly 10 Gbps of bandwidth over India provided by foreign satellite companies, which is currently lying unutilised and can be tapped. A liberalised and Open Sky policy for Satellite Communications technology would help provide broadband connectivity to the unserved and underserved regions and populace of the country.
The rollout of public Wi-Fi needs to be accelerated. India moved from 30,000 to 3.5 lakh Wi-Fi hotspots last year. That number needs to reach 80 lakhs if India is to come anywhere close to the global norm of 1 Wi-Fi hotspot per 150 people. Further, adopting the TRAI recommended WANI architecture could facilitate seamless Wi-Fi Roaming whereby people can easily access Wi-Fi on the move. BIF recommends adoption of WANI 2.0 that can provide access across technologies in a truly seamless manner. WANI 2.0 can also be extremely useful in proliferation of IoT as it supports device-to-device communication. Liberalisation of Public Wi-Fi based on the WANI architecture will boost connectivity and efficiency of bandwidth for providing broadband services to the consumers.
Airwaves in the E and V bands, also known as wireless fiber, need to be deployed and utilised optimally, as is being done by telcos across the world, to address the mobile broadband backhaul needs in a cost-effective manner. The E and V bands are especially effective in providing services to densely populated areas fiber layout may be a challenging task.
Digital applications and e-commerce platforms have become an integral and important part of today’s daily affairs. An ICRIER report notes that apps contributed at minimum INR 1.4 lakh crores to India’s GDP in 2015-16, and this is continually rising to INR 18 lakh crores by 2020. As per a WIK (German Consultant) report – German Consultant, each user of Applications in India receives on average $249 (INR 16,000) of consumer surplus annually. Applied to the total population, this number stands at $74 (INR 4,800) per capita. Thus, it is imperative that a positive and encouraging policy & regulatory environment be provided for the growth and development of the digital applications/ e-commerce platforms service providers in the country.
Finally, the digital infrastructure in the country needs to be boosted and enhanced, so as to plug the present gaps and vulnerabilities as laid bare by the COVID 19 situation, and further prepare for advanced fool-proof measures for future catastrophes that may arise. Liberal policy & regulatory guidelines to incentivize fresh investments in the infrastructure would be a welcome and much needed measure in this regard.
Adopting measures to address and overcome the challenges as stated above would lead to betterment of the services, while sustaining and developing further on the growth of this critical broadband sector in the country.
How do you see the Indian fixed broadband market evolve amid the lockdown? What will be your medium-term outlook for this space?
Given the fact that post COVID 19, Work-from-home may become the new norm, the clear shift towards Fixed Broadband will lead to demand side pressures on Home Broadband and Fixed Broadband with the urgent need to take Fiber to the Home, Fiber-inside the Building and In-Building Solutions catering to this sudden spurt in Indoor demand. This entails huge investments in getting fiber inside the buildings, to the curbs, and right inside the homes to take care of the surge in required capacity. Simultaneously, we are likely to see more emphasis on in-building coverage through a slew of means that would include creation of Wi-Fi Hotspots as well as providing additional spectrum in the sub 700 MHz bands to enable indoor mobile coverage.
To defray the load on Mobile Broadband alone, it is essential that the Broadband Infrastructure be enhanced via all aspects – be it Public Wi-Fi, Satcom, E & V bands, besides fiber and mobile towers. Only then can we ensure ubiquitous Broadband availability everywhere with equal balancing of additional traffic during such difficult times, as well as going forward.
What are some of the key telecom technology trends that you expect will emerge/gain traction in India owing to the pandemic?
This outbreak has led to major shift in usage patterns as well as location of usage, due to the pan-India lockdown, forcing almost everyone to operate out of their homes. This is likely to lead to a higher rate of voice calling and extensive use of data at home instead of offices or instead of on the move, as mobility is now near zero.
What this entails is higher usage of fixed broadband services (home broadband), thereby resulting in the need for upgradation of home broadband plans and increased pressure on Fixed Broadband networks.
As already mentioned above, Fiber based solutions to the home i.e. Fixed Broadband will see a clear impetus. We are likely to see a new stimulus for In-building solutions such as Fiber to the buildings, and creation of new Wi-Fi hotspots inside the building which would help carry the fiber bandwidth to individual consumer devices.
In dense urban areas where fiber deployment is likely to be a challenge, we expect the use of E & V bands to take place in the medium term. We also expect abundant use of Satcom in the coming months besides the addition of more towers and antennas over short hauls – the latter being the preparedness required for 5G which is in the offing in the near future.
Work-from-home is well on the way to being established as a viable option for the future, as a result of which, the scope for innovative in-building solutions is expected to grow substantially, so that the shift in network load from CBDs to residential areas is well-accommodated by the service providers.
The importance of sub-GHz bands for mobile broadband services is increasing significantly because of the need to provide reliable in-building coverage and penetration to facilitate working from home in the albeit less dense residential areas, owing to the superior propagation characteristics of these frequencies.