Telecom tower companies today are moving beyond their traditional role of providing infrastructure and tapping new opportunities in areas such as in-building solutions (IBS), small cells and Wi-Fi, and site fiberisation. Robust ICT connectivity is also central to the success of the Digital India and smart cities programmes, and towercos can play a vital role in this segment too. Tilak Raj Dua, director general, Tower and Infrastructure Providers Association (TAIPA), talks about the emerging opportunities and challenges for the industry…
What are the key trends witnessed by the Indian telecom tower industry?
- Today, more than 80 per cent of data is consumed indoors. Deployment of IBS and microcells for capacity and coverage will drive significant telecom infrastructure demands.
- In India, less than 25 per cent of mobile tower sites have optical fibre cable connectivity. Introduction of 5G, artificial intelligence, virtual reality, machine to machine, and internet of things will create the need for high speed data networks, driving backhaul fiberisation.
- India expects to see over 600 million people using public Wi-Fi service by 2019, for which over 3 million access points must be rolled out. The IP-1s are well placed to deploy shareable passive infrastructure for Wi-Fi hotspots.
- The provisioning of passive infrastructure is fundamental to realising the Digital India mission. Further, BharatNet will be a key enabler for investments in fibre infrastructure and broadband.
What has been the progress on the implementation of RoW norms?
The RoW rules notified in November 2016 are very critical for the provisioning of over-the-ground and below-the-ground telecom infrastructure. However, their implementation at the state level remains a complicated situation.
At present, there are around 10 states – Jharkhand, Rajasthan, Tripura, Odisha, Haryana, Assam, Maharashtra and Tamil Nadu – which have aligned their policies with the said rules. We are in active discussions with other states to do the same.
Most states continue to follow their own rules and regulations that are not uniform. Allowing the installation of telecom infrastructure is often considered as a revenue generating mechanism by municipal/local bodies. There is lack of coordination between local and state authorities.
Besides RoW, what are the other key challenges facing the industry?
- Exclusion of input tax credit (CENVAT credit under the heading plant and machinery)
- Unavailability of government land and buildings for the installation of telecom infrastructure
- Levy of property tax on mobile towers
- Implementation of infrastructure status and extending its benefits to the sector
- Security of critical telecom and digital infrastructure
- Issues related to the availability of power.
What are your views on the draft National Digital Communications Policy (NDCP), 2018?
The draft policy has a 360° focus, keeping in view the entire telecom ecosystem for enabling futuristic technologies. It envisions transition to a digitally enabled society by deploying digital infrastructure.
As for the IP-1 industry, the draft policy brings some hope. It emphasises on sharing of active infrastructure by enhancing the scope of IP and promoting the deployment of common shareable, passive as well as active infrastructure. Further, the draft NDCP policy proposes to set up a National Fibre Authority, which will be responsible for both underground and overground telecom infrastructure. It talks about facilitating fibre-to-the-tower programmes to enable fiberisation of at least 60 per cent of the base stations, incentivising and promoting fibre connectivity for all new construction, and fiscal incentives for encouraging investments in broadband infrastructure. Most importantly, telecom optic fibre cable will be accorded the status of public utility. The draft NDCP categorically mentions the extension of incentives and exemptions for the construction of telecom towers; RoW permissions for telecom towers in government premises; creation of a collaborative institutional mechanism between the centre, states and local bodies for common RoW; standardisation of costs and timelines; and removal of barriers for approvals. The draft policy also strengthens the industry’s commitment towards developing a green sustainable telecommunication by promoting the deployment of solar and green energy solutions, and encouraging the use of small cell fuel, li-ion batteries, among others. It also talks about amending and tweaking the Indian Telegraph Act, 1885, and other relevant acts; and restructuring the legal, licensing and regulatory frameworks for reaping the benefits of digital convergence.
What will be the emerging opportunities and focus areas for the sector?
As per industry reports, data is projected to increase twelvefold by 2020, which will fuel the deployment of towers and tenancies. Further, the success of the government’s flagship programmes like Digital India, the Smart Cities Mission and right to broadband will open up a gamut of opportunities for infrastructure providers.