The telecom sector has come a long way from the time the first mobile call was made in the country 25 years ago. Today, India boasts of over a billion telecom users. It has been an interesting though chequered journey, characterised by low tariffs and high data growth, but also lost signals, poor speeds and call drops.
Even as India has progressed across multiple generations of technologies, from 2G to 3G and now 4G, subscribers have continued to complain about poor service and network quality. The call drop menace persists, though the situation has improved slightly owing to strict rules and stricter penalties by the Telecom Regulatory Authority of India (TRAI).
On the broadband front, while interestingly, Indian broadband users consume more data than their global counterparts, the country ranks a dismal 129th amongst 138 nations in terms of mobile data speeds, as per Ookla’s Speedtest Global Index (August 2020). The index further highlights that Indian users experience an average download speed of 12.10 Mbps, less than half the global average of 34.82 Mbps. In terms of fixed broadband, India ranks 71st on a list of 174 countries, with Indian users experiencing an average download speed of 43.04 Mbps, barely half the global average of 84.33 Mbps.
Among the various challenges in telecom connectivity, limited terrestrial infrastructure is a critical one, especially in light of the burgeoning internet users. Since 2015, the number of internet users in the country has more than doubled. More internet users means more data consumption, which, in turn, requires more robust infrastructure support. However, given the financial constraints of telcos, investments in network expansion and upgradation have been rather slow. Mobile networks are thus congested and overloaded, with more subscribers than they can handle, ultimately impacting speeds and service quality.
Cheap services, while being a great tool for service proliferation, have proved to be an extremely costly proposition for telcos. Industry ARPUs have traditionally been low and they hit rock bottom when Jio made a disruptive entry into the sector in 2016. These currently stand at Rs 130-Rs 150, though industry experts believe they could increase to Rs 300, making a viable business case for telcos. Low revenues have left little room for capex and meant that telcos cannot make aggressive investments in their networks.
Unfortunately, the penetration of optic fibre cable (OFC), which is an ideal medium for data transmission, also continues to be in a dismal state. The fragility of home broadband (or the lack of OFC-based last-mile connectivity) has been exposed by the ongoing Covid-19 pandemic. Data consumption has soared due to the ensuing lockdowns, revealing several gaps in service and connectivity in residential zones. Bandwidth requirements have spiked with most family members simultaneously using the internet at home, for work, virtual meetings, online classes, telemedicine, entertainment, etc. In such a scenario, mobile networks in residential areas are being expected to manage unprecedented loads, which is not sustainable. There have been reports of network quality deteriorating by almost 20 per cent, which calls for the deployment of fibre-based broadband to ensure uninterrupted user experience.
Poor user experience has also been the result of several gaps that exist at the policy and regulatory level. For instance, the telecom authorities define broadband as internet connectivity with a minimum download speed of 512 kbps. In contrast, the US classifies mobile services as broadband when they have a speed of 5 Mbps for downloads and 1 Mbps for uploads. For fixed line broadband, the criteria are a minimum speed of 25 Mbps for downloads and 3 Mbps for uploads.
Given the new website architectures, application designs and the host of high definition online content available for streaming, it is imperative that the definition of broadband is reviewed. Earlier, in August 2020, TRAI came out with a consultation paper seeking industry opinion on the reasons for poor broadband proliferation and the policy measures needed to address the slow growth. It also sought to know the reasons for the slow fixed and mobile broadband speeds, and asked whether there was a need to review the definition of broadband. Suggestions were invited from industry stakeholders on whether the definition of broadband should be dependent on or independent of speed, technology (2G/3G) and the underlying medium, or should it be based on certain thresholds for upload/download. It also sought industry opinion on the need to develop a standard speed measurement programme in the country.
Some industry experts believe that the limited availability of spectrum with telcos has also impacted 4G speeds. The spectrum allocation per operator in India is very low as compared to other countries. Since limited bandwidth is being distributed among an increasing number of users, it drags down the speed of the network. This also brings to the fore the issue of whether or not a contention ratio should be introduced for internet service providers (ISPs). The contention ratio is defined as the number of users competing for the same bandwidth. ISPs in India often add too many subscribers to a connection, which leads to high congestion and poor quality of service (QoS). In 2009, TRAI had deliberated on the issue and decided not to mandate a contention ratio for ISPs. At the time, TRAI considered that a regulatory obligation may increase the cost of service provisioning for a fledgling segment such as broadband. But perhaps now, after almost a decade, it is time to review that position.
Besides, the non-availability of sites due to acquisition problems and the sealing of sites by local authorities due to fear of radiation from electro magnetic fields continue to impact network expansion by towercos.
Filling the infrastructure gap
For a seamless QoS experience, it is crucial to ensure the presence of network infrastructure in every corner of the country. Network capacity augmentation is clearly the need of the hour. In fact, without this, it will be difficult to achieve the objectives of the government’s Digital India programme or usher in 5G given that the current infrastructure does not even support 4G speeds.
To this end, the sharing of passive and active infrastructure such as dark fibre, right of way (RoW), duct space and towers will be critical. TRAI has already submitted its recommendations to enhance the role of IP-1s, who can assist and partner with telcos in proliferating next-generation network infrastructure across the country. Infrastructure sharing can bring down operating and capital expenditure by 16-35 per cent each.
Efforts must also be made to ensure that state authorities align with the centre’s RoW Rules, 2016, which aim to standardise costs and ease the approval process for deploying underground as well as over-ground infrastructure.
To enhance fiberisation, the development of common ducts along roads and streets for laying OFC should be considered. TRAI has also been deliberating on the possibility of utilities sharing cross-sector infrastructure such as OFC, broadcasting cables, gas pipelines, roads and power transmission lines.
Industry analysts also suggest that a fibre fund be put in place and low-interest loans provided to facilitate initiatives by telecom carriers, ISPs and tower firms. According to the PHD Chamber of Commerce & Industry, the government should set up a $2 billion fund to incentivise tower companies and telcos to connect 100 per cent radios on their towers to OFC.
State authorities must also issue directives to local municipal bodies, preventing them from initiating coercive actions such as sealing of towers without prior notice. Incidences of theft, vandalism of batteries and cables, fibre cuts, etc. have increased considerably in recent times. Industry stakeholders believe that it is necessary to bring in policies/regulatory provisions to safeguard telecom network infrastructure from damage, wilful or otherwise.
At a broader level, expediting the implementation of the National Digital Communications Policy, 2018 objectives will go a long way in bridging the infrastructure and connectivity gap. As per TRAI, improving the quality and speed of broadband for a better user experience requires a multi-pronged approach. The regulator has made several suggestions for this, including the strengthening of infrastructure, proliferation of Wi-Fi hotspots and the use of cable TV for broadband. However, several of its recommendations issued in the past five to six years are still under consideration. For instance, the regulator has, in the past, recommended that the minimum download speed for broadband be revised to 2 Mbps, but this has not been implemented by the government so far. Its recommendations on setting up a public Wi-Fi network are also yet to be converted into an actionable strategy.
Role of new technologies
A superior and quality broadband experience is critical for the successful transformation of telcos into digital enablers. The emergence of digital lifestyles has opened up new avenues of growth for telcos. Telcos are now going beyond voice and data connectivity offerings and committing effort and investment in building a portfolio of non-core digital services. Their connectivity offerings span digital money, digital wallets, video-on-demand, vehicle diagnostics, music and entertainment-on-demand, IoT/M2M, enterprise solutions, etc. All of these demand not only a robust network but an advanced and smart network for a truly enhanced customer experience.
Thus, besides network densification, service providers today are striving to make their networks adaptive in nature. According to Rohan Lobo, partner, consulting, Deloitte Touche Tohmatsu India LLP, “Communication service providers (CSPs) are beginning to look at themselves as digital service providers. They are adopting a platform approach to provision and monetise services that are flexible and resemble OTT services. Perhaps the most important change is that CSPs are replacing the functional view of customer service with an agile end-to-end view. Central to this transformation is the use of automation, primarily to make processes more efficient. Machine learning and artificial intelligence are already being leveraged to predict customer behaviour, improve the hiring process, automate IT infrastructure, manage contracts and detect cyberthreats. Apart from this, interesting use cases are being observed in the network domain, that is, network service provisioning, network service architecture, and network engineering and operations. Technologies such as service orchestration, network function virtualisation and automation solutions such as self-organising networks in radio access are expected to cut repetitive network maintenance work by 70-90 per cent and reduce more than a third of the skilled resource (manpower) requirements when it comes to RAN management.”
AI-driven automation can help telcos enhance network efficiency, cut down opex, and improve the quality and speed of services. According to Nihar Panda, head of business development and solutions architecture, Blue Planet, a division of Ciena, the industry is seeing an unprecedented use of the internet, driven not just by remote working but also by the increasing use of IoT, gaming, cloud services and other emerging technologies. AI has the potential to improve every step of the network operations journey. It can learn faster than humans and thus, by leveraging the massive amount of data that these networks produce, AI solutions are able to identify patterns and potential network issues before they even materialise, find a solution, and implement it prior to a service disruption.
QoS is the king
The years following Jio’s entry in 2016 have been disruptive, with significant tariff cuts across the board. The tariff cuts have often been accompanied by a compromise in service quality. Operators have time and again stated that lower ARPUs leave them with little money to invest in network expansion and upgradation. But that is all in the past. Given the telcos’ concurrence on price hikes, the tumultuous era of price wars is hopefully over, and the Indian telecom market can finally look forward to some price rationality. All the three private players agree that industry tariffs in their current form are unsustainable and need to be revised upwards sooner rather than later.
Interestingly, users are also not as price averse if they are promised and delivered a quality experience and high speeds. In a survey conducted by JPMorgan, it emerged that close to 90 per cent of users have the ability to absorb tariff increases of up to 10 per cent and are willing to pay extra for higher speeds.
With price no longer being the differentiating factor, it will be the quality of service that will be king. Only those telcos that offer a superior customer experience on the back of robust and smart network infrastructure will see customers queuing up to join their network.
By Akanksha Mahajan Marwah