The Indian telecom industry has witnessed significant consolidation, resulting in a fewer number of operators, leading to a fall in tenancies. ARPUs are declining and revenues from traditional sources are getting constrained. There is an urgent need to look at new avenues and monetisation models to expand the revenue base.
The telecom industry understands the value of fibre in networks of the future. Even then, there has been very low uptake and penetration of fibre in the last mile. When we talk of fibre to the last mile, we are talking about towers being fiberised as well. Most of our backhaul is still microwave based. Fiberised sites constitute only 20-25 per cent of the overall sites in India.
So the big question is, what is hampering the wider roll-out of fibre? One, it is highly capex intensive. Two, it is difficult to execute, mostly because of several right-of-way (RoW) related issues. Interestingly, these issues are not limited to just exorbitant charges, but include the entire process of obtaining approvals, liaising with multiple local bodies and dealing with restrictions and hindrances during digging.
Here, infrastructure providers can step in and can take over the load of rolling out fibre networks if the industry is willing to share such networks. Traditionally, telecom infrastructure providers have focused on telcos, but today there are quite a few other fibre users such as internet service providers and cable providers. These non-telco entities typically lay fibre on their own. So, everyone is putting out their own fibre into the ground but not really collaborating with others.
We all agree that collaboration is an important aspect for the industry’s future. So, we need to look at how comfortable the industry is to have a common fibre cable carry the data of competing rivals. Technically, it is possible. All the necessary security measures can be put in place to have dedicated channels. The main challenge is the industry’s comfort and willingness towards such an arrangement. Telcos still follow a barter system wherein one telco offers some fibre length/space to another at a particular site in lieu of using the other telco’s fibre network at another site.
There is a need to explore sharing to enhance in-building connectivity as well. Today, most of the data generation is happening inside buildings. But the kind of coverage and capacity that we get on building premises is severely restricted. As of now, there is limited sharing of infrastructure. Each telco installs small cells for indoor coverage solutions, depending on its expansion plans and timelines. This really means that one telco decides to offer connectivity into a building and starts equipment installation, and six months down the line another operator plans to enter the same building and starts installing its own fibre/small cells and dig up areas all over again. Clearly, this has not been welcomed by building owners and residents.
The way forward
Let us plan and implement shared infrastructure. Fibre, smart cities, in-building coverage and other network solutions need far-sighted and collaborative planning. If we have the wherewithal and the right technical solutions, which allow sharing of all kinds of infrastructure, we must plan accordingly. It is important that the industry not just focuses on capex, but also looks at the larger picture of how to deliver 4G and now 5G to the last man on the ground. It is heartening to see the industry gearing up for 5G and working to bring it simultaneously with the rest of the world.
But are we really ready for 5G? 5G use cases, spectrum pricing, user equipment price points, auction timing are all uncertain. 5G use cases, whenever they appear, would require densification efforts, involving sharing/pooling of resources. For telcos, setting up infrastructure on their own is no longer a very economical or viable option given the pricing pressures. In such a scenario, it makes tremendous economical sense to harness the strong points of each industry stakeholder, including infrastructure providers, to deliver next generation services with enhanced capacities and fight out issues such as call drops, coverage challenges and low data throughput.
