Today technology is fundamentally disrupting business models, social structures and consumer behaviour at an unprecedented speed. The telecom industry is standing at the forefront of the digital revolution by providing services beyond the traditional building blocks of access, interconnectivity and applications. A digital ecosystem enabled through technologies such as 5G, blockchain, internet of things (IoT), artificial intelligence (AI), cognitive computing, machine learning and augmented reality (AR)/virtual reality (VR) is unlocking better, more secure and personalised experiences for everyone. KPMG in India’s recent report “Imagine a New Connected World: Intelligent, Immersive, Inventive” takes a deep dive into this digital ecosystem. Released in association with the India Mobile Congress and Cellular Operators Association of India, the report elaborates on the challenges in achieving the Digital India Vision, such as the issues related to financial stress in the telecom industry and the high price of spectrum, and suggests ways to mitigate some of these challenges.
Starting with the key technology trends of 2019-20, the report mentions that India will see an amalgam of intelligent, immersive and inventive technologies with bots and blockchain emerging as the game changers over the next five years. 5G is slated to potentially add 0.35-0.5 per cent to GDP and, while the potential of existing technologies such as 2G and 4G has not yet been fully exploited, India is expected to see a gradual migration to 5G by 2022.
The report throws light on disruptive technologies, revealing that while India Inc.’s current table stakes are on data analytics and cloud, IoT, blockchain and AI are projected to be areas of strategic investments, and robotics and AR/VR are the future stars.
In terms of adoption of the intelligent digital ecosystem, the report indicates that 43 per cent of companies have begun working on emerging technologies, and almost 31 per cent are yet to develop a digital strategy roadmap. As per the report, 57 per cent of the companies working on digital transformation do not have a digital risk strategy in place, and 71 per cent with a digital risk strategy are aware of data privacy risks and have taken measures to address them.
The report further states that while the government is strongly committed to building a connected and digital India, there is a need to address a few key issues such as the financial stress in the telecom industry and the adoption of the National Digital Communications Policy, 2018 (NDCP) in a more productive manner. The inadequacy of a fibre network and the lack of device interoperability standards also impact the quality of technology implementation and will limit innovation in the sector. Additionally, the lack of schemes/tax incentives to fund start-ups is impeding the development of India-specific use cases and business models. In terms of data privacy, while the enactment of the Personal Data Protection [PDP] Bill is a step in the right direction, efforts at effective implementation and customer education are necessary to improve customer confidence in the adoption of digital technologies.
Some of the solutions suggested by the report to mitigate these challenges are as follows:
- Policy: Policy interventions relating to ease of doing business, right-of-way clearance, public-private partnership models for infrastructure development, expediting the roll-out of smart cities, finalising the PDP bill and drafting an IoT policy will accelerate the adoption of digital technologies in the country.
- Investments: To promote investments in the sector, the government should create special purpose vehicles to support international lending organisations and provide substantial investments for digital infrastructure projects at cheaper interest rates.
- Spectrum: As the country is gearing up for 5G, it is critical that the additional spectrum should comprise a mixture of coverage and capacity bands to ensure that networks can provide high speed, cost effective services in rural and urban areas.
- Easing the financial burden of the sector: With the total levy of 29-32 per cent GST, licence fee and spectrum usage charge (SUC) on the telecom sector, there is an urgent need for levy rationalisation. The Universal Service Obligation Fund contribution and SUC could be reduced to 3 per cent and 1 per cent, respectively, to make the sector competitive.
- Ecosystem: Incubation hubs and accelerators on the lines of Atal Incubation Centres can be established along with additional funding mechanisms such as the VC funding scheme and Startup India, which provide grant funding to emerging tech start-ups, could be initiated.
Thus, with the growing number of data users and evolving consumer expectations, industry stakeholders will need to re-evaluate their existing strategies and reinvent themselves by leveraging emerging technologies. It is only through the collaborative effort of all the relevant stakeholders that India can become the largest digital economy in the world.