With this issue, we celebrate our 16th anniversary.
After a period of subdued growth, 2014 brought back a sense of optimism in the telecom industry, putting it back in growth mode. However, a number of issues remained unresolved at the end of the year. There was a lot of ambiguity on the policy and regulatory fronts, the industry was reeling under heavy debt, and the delays in spectrum allocation had put a halt on operators’ expansion plans. The year, therefore, ended on a positive note, but with the hope that all these issues would get resolved in 2015.
In 2015, both the government as well as the industry lived up to most of those expectations, if not all. The year began with the successful auction of spectrum, followed by various landmark decisions on the policy and regulatory fronts, including the notification of spectrum trading and sharing guidelines. In the telecom infrastructure space, several states adopted DoT’s 2014 guidelines on the installation of new telecom towers, either in the same manner or with some modifications.
On the industry side, there were early signs of consolidation, both in the services and the telecom infrastructure space. 4G became a reality with incumbent players rolling out these services in select cities and towns. Although it will take at least two to three years to reach significant scale, the wait for 4G services finally came to an end.
While the year ended on a positive note with the sector transitioning from voice to data-led growth, there were some disappointments for the industry as well. Four years after the launch of 3G services, there are just about 93 million 3G subscribers as of mid-2015, barely 9 per cent of the total mobile user base. This is largely because 3G failed to provide a true broadband experience. This, along with the competitive pressures in the voice segment, has hurt the revenues of all players. However, this is not a long-term issue. As the content ecosystem gets strengthened over the coming years and handset prices fall, data revenues will fast gain traction.
On the regulatory side, several new issues like net neutrality (differential pricing) cropped up while challenges related to the quality of service took centrestage. Both these are likely to remain key priorities for the regulator in the coming year.
In light of the developments in 2015 and the emerging trends, 2016 is expected to be the “year of the stallion” for the Indian telecom industry. All major players will fast-track their data network roll-outs, Reliance Jio Infocomm will finally launch services on a commercial scale (the soft launch has already taken place), mobile operators and tower companies will continue to consolidate in order to gain scale and efficiencies, and network architecture will continue to evolve.
