The exponential growth in data consumption and the ever-increasing demand for video content has provided a fresh impetus to optic fibre cable (OFC) deployments in India. The year 2018 saw significant fibre installations, both in the backhaul and the last mile, by telcos. OFC serves as the backbone for flagship government programmes such as BharatNet and Smart Cities, and will be an essential component of future networks. Going forward, the Fibre First initiative outlined in the new telecom policy will give a major impetus to India’s OFC market, and demand will be further bolstered as the industry gears up for 5G deployments. Leading OFC players share their views on the sector’s performance in 2018 and the way forward…
How would you rate the performance of the Indian telecom network and equipment industry in 2018? What were the key highs and lows?
Deepak K. Chhabria
The five-fold jump in foreign direct investment (FDI) inflows in the telecom sector, from $1.3 billion in 2015-16 to $6.2 billion in 2017-18, has fuelled tremendous growth. With an increase in government spending on telecom infrastructure and services, there has been a rise in internet and OFC coverage. The OFC market has grown at a CAGR of 30-35 per cent.
The year 2018 saw the consolidation of the mobile telecommunications market into three large private players that account for more than 90 per cent of revenue and 80 per cent of spectrum holding. Teledensity increased from 18.3 per cent in 2007 to 92.84 per cent in 2018. As of September 2018, the total number of telecom subscribers stood at 1.19 billion. Meanwhile, wireless subscriptions grew at a CAGR of 19.61 per cent over the past few years.
However, Reliance Jio’s aggressive and lower tariff plans have put stress on other existing telecom companies. The ambitious BharatNet project entered Phase II in 2018. It is being implemented by various states’ special purpose vehicles (SPVs), which have different approaches, different specifications, various priorities and lack of funds to execute it.
According to the Telecom Regulatory Authority of India, India is the second largest telecommunications market in the world by mobile subscribers. India’s remarkable progress in optical fibre during 2018 has, today, made it one of the largest markets globally. The government’s forward-looking initiatives have significantly contributed to this growth. A good example is the Digital India initiative, which aims to provide ubiquitous internet connectivity, enabling the electronic roll-out of new digital services. Currently, the industry is experiencing rapid evolution on the back of increasing demand for (and provision of) data services. Fibre-to-the-home (FTTH), in particular, witnessed an upsurge in 2018 with key telecom operators rolling out FTTH services.
What are the emerging trends in the telecom network and technology space?
We are seeing an important shift towards a data-first model. With demand for scalable, agile and future-proof networks increasing as we move closer to 5G and the internet of things (IoT), the scope of current and forthcoming technologies will fast change.
- Shifting business models: Internet data companies are driving investments to create ultra-high bandwidth and very low latency networks. This is coupled with government initiatives to invest in building citizen-centric networks.
- Transformation needs more fibre: The telecom sector is shifting from microwave-led voice networks to fibre-led data networks. 5G architecture with multiple small cells requires almost ten times more fibre connections.
- Programmable networks of the future: Future networks will need to be more secure, programmable, reliable, and have higher speeds. They will have distributed computing where the conventional core elements are converged and the access is dominated by fibre.
- Virtualisation: Networks are increasingly getting virtualised to become flexible, agile and low cost.
- Service quality: Ensuring efficiency and quality of service is the new trend in the conventional connectivity industry.
Deepak K. Chhabria
- IoT has provided a major platform for growth for telecom companies. However, it can prove to be a challenge since, apart from providing services and investing in valuable user data from IoT devices, telecom companies will need to invest more in building infrastructure to provide 5G services and secure carrier-grade Wi-Fi networks along with transferring a large amount of data securely. Due to the ever-growing demand for faster internet, every major telco is competing hard to win the 5G race.
- Internet television, such as Netflix, Amazon Prime and YouTube, is another trend that gained popularity. Another rising trend is cloud services. Cloud servers save expenditure for users as these files can be accessed by them on a pay-as-you-go basis from anywhere across the globe. The recent surge in security breaches due to hacks and data leaks has put pressure on network providers to come up with more secure and fool-proof protection techniques. Focus on network security will be more important than ever before.
- Telecom companies are installing a lot of fibre in light of future opportunities. Government initiatives such as Digital India, BharatNet and Smart Cities are driving the demand for FTTH. There has been high growth in fibre optic ribbon cables in India. To overcome the right-of–way problem, there is a considerable increase in demand for ADSS aerial cables by various users.
In the technology space, globally, network providers are opting for denser optic fibre networks to be 5G-ready. 5G technology provides high bandwidth and low latency, which will be required for applications enabling consumer mobile IoT. Fibre is needed in 5G networks for delivering the required bandwidths in an operationally efficient way. The effective use of available spectrum in mobile networks is achieved by using modern signal processing techniques, applied to many signal streams simultaneously. This creates the need to bring signals together at a central location within the radio access network (RAN), and fibre is the best way to achieve this. The fibre installed in the RAN will need to have excellent transmission characteristics to ensure low loss over the required wavelengths of transmission but will also need to cope with a challenging physical environment where space is at a premium and bends may be expected. The bend-induced, additional loss in telecommunication networks is caused by an effect called macrobend in which light is lost from the fibre if it experiences a tight bend. Macrobend-improved, Recommendation ITU-T G.657 fibres are preferred by network operators, as these are tolerant to bends in network installations. Their bend tolerance enables smaller, denser cable designs that are ideal for environments where space is a constraint. Using fibre that meets this specification allows for spatially efficient installations with lower risk of signal loss (due to macrobend performance).
What are your views on the National Digital Communications Policy (NDCP), 2018?
The NDCP, 2018 is a step in the right direction, preparing India and its citizens for future. The Fibre First initiative and encouraging Common Rights of Way will help speed up broadband penetration and availability. This policy push will help the sector in building a digital India.
“5G will be driven by fibre-only technology. Fibre will move from the backhaul to serve both backhaul and front-haul requirements.” Ankit Agarwal
Deepak K. Chhabria
The telecom sector is a critical enabler of Digital India and this proposed new policy is designed to empower Indian telecom to fulfil this goal. It will drive growth for OFC. Many government initiatives will drive the consumption of optic fibre. NDCP 2018 will create new opportunities for business across various sectors.
“The new policy and various government initiatives will drive growth in the consumption of optic fibre. NDCP 2018 will create new opportunities for business across various sectors.” Deepak K. Chhabria
The NDCP, 2018 lays down the framework for providing high-speed internet access to all. The focus areas include the Fibre First initiative, which encourages FTTH deployments, and the enablement of next-generation technologies such as 5G, artificial intelligence, IoT, cloud and big data.
In 2012, Corning established a state-of-the-art optic fibre manufacturing facility in Pune. Today, the company contributes to the Digital India vision by enabling “information highways” for the region. With the prerequisite being better connectivity and mobility, Corning’s optical communications expertise in optic fibre, FTTH, wireless solutions and data centre cabling infrastructure is helping prepare for future-ready networks.
“Fibre is an essential part of the 5G framework because it can backhaul the amount of data that 5G will generate. A single optic fibre link can transfer 20 Tb per second.” Sivakumar Nagarajan
How are you leveraging the opportunities under government initiatives such as Digital India, Make in India, BharatNet and the Smart Cities Mission?
Sterlite Tech has been a key contributor to the Digital India vision with its integrated silicon to software offerings. Over 45 per cent of Indian data networks run on our fibre. We are the only company in the world with expertise in photonics and glass science, which is forward integrated into network roll-outs and programmable network designs. This gives us a unique advantage to offer solutions for hyper-scale networks for applications such as 5G, fibre-to-the-x (FTTx), data centres and defence.
- Make in India: The growth in data consumption is closely linked with the growth in optic fibre consumption. Our plan to expand fibre capacity to 50 million fkm is on track and will be operational by June 2019. To aid smarter and faster networks, we will double cable capacities by fiscal 2020.
- BharatNet: Sterlite Tech has been associated with BharatNet Phase I and has partnered with various states for BharatNet Phase II. We are working with Maharashtra under BharatNet Phase II to enable integrated digital services to the last mile.
- Defence: We are working on a multi-year contract that includes design, execution, operations and maintenance of the Indian Navy’s digital network. We are also deploying 9,495 km of the Network for Spectrum project for the Indian Army.
- Smart Cities Mission: Technology innovation is at the core of the company’s operations, as we design, build and manage smart cities like Gandhinagar, Kakinada, Jaipur, and connect villages with fibre and smarter applications for e-education, e-healthcare and agriculture among others.
What are your views on the evolving 5G ecosystem in India, in terms of opportunities and challenges?
5G will be driven by fibre-only technology. As we shift towards 5G, the network architecture will evolve faster. Fibre will move from backhaul to serve both backhaul and fronthaul requirements. The transition to 5G poses challenges due to diversities in network densification, disparate data offload strategies; and uncertainties around backhaul technologies. 5G will require a multifold increase in small cells, with each small cell having fibre backhaul. The percentage of tower backhaul on fibre for operators will need to increase significantly. Although leading telecom operators and the government are investing in fibre, the coverage is still only 25-30 per cent.
Deepak K. Chhabria
The demand for speed and bandwidth, the availability of technology and government initiatives to promote ease-of-doing business present opportunities in the 5G space. The challenges include low ARPUs, which make investments difficult; municipal-level issues in installing towers; right–of-way issues; and the lack of central monitoring agencies at the city level. The lack of availability of combined maps, which can prevent OFC damage while digging, is also a challenge.
People have started adopting a digital-centric lifestyle, which includes 4k video streaming, mobile content, virtual reality (VR) technologies and smart homes. All these trends point towards the need for additional bandwidth.
With a population of over 1.3 billion, the Indian market indicates a strong potential for 5G deployments, which will lead to an increase in network speed and capacity. To achieve these speeds, networks need to be supported by an advanced fibre framework. From macrocells and small cells to the data centres that deliver apps and services, it is essential that fibre connects all non-wireless aspects of the network for 5G to reach its full potential. Fibre is an essential part of the 5G framework because it can backhaul the amount of data that 5G will generate. A single optical fibre link can transfer 20 Tb per second.
Do you have a regulatory wish list?
- Focus on last-mile connectivity: With technologies such as augmented reality and VR, smart homes, gaming, ultra HD movies and audio gaining traction, telcos, internet service providers and the government will need to tap the potential of FTTx technologies.
- Deployment practices: The Indian broadband segment needs to follow global best practices in deploying and tracking fibre. Moving towards hyper-scale network modernisation through initiatives such as Sterlite Tech’s Lead360 approach will help in creating networks with a better shelf life.
- Timely implementation of the NDCP: There is a clear need for faster implementation of the NDCP, 2018.
- Efforts towards government payments: The industry needs a prompt “payment policy” for all government-related payments to enable a healthy supply chain ecosystem.
- Ease of doing business: The centre should bring in an “ease of business” policy, specifically for the telecom infrastructure segment to enable faster broadband deployments.
Deepak K. Chhabria
Industry has to find solutions for the limited availability of critical raw materials such as aramid yarn and helium gases, both of which are imported. A reduction in preform duty, which is critical raw material for the production of optic fibre, will benefit fibre manufacturers in India. We also need to monitor the dumping of telecom products, cables and optic fibres from other countries.
What is your outlook for the Indian market in 2019?
India’s data consumption has grown ten times during the past two years, with over a billion users. With ever-advancing technologies, broadband penetration to the rural last mile has to go up exponentially. Increased broadband penetration will translate into a 5-6 per cent growth in GDP and prepare the country for digital reinventions.
Deepak K. Chhabria
The OFC market will continue to grow at a CAGR of 20-25 per cent. China is slowing down and there are possibilities of various optic fibre products being dumped into the Indian market, which will adversely affect the domestic industry.