Lt General Dr S.P. Kochhar, Director General, Cellular Operators Association of India
Lt General Dr S.P. Kochhar, Director General, Cellular Operators Association of India
India has the second largest mobile network base in the world with 1.19 billion active subscribers. It aspires to become the world’s second largest smartphone market by 2025. The year 2022 will set the roadmap for the industry to achieve its long-term goals as we gear up for the commercial roll-out of 5G. There is a lot to look forward to this year. Telcos wait in anticipation for the new set of reforms, which will finally end the suspense around spectrum pricing and clear the roadmap for 5G roll-out in the near future.
The year 2021 has been a defining year for the industry. It would be remembered for milestone reforms such as the relief package announced in September 2021, allowing 100 per cent foreign direct investment (FDI) under the automatic route in the telecom sector, reduction of financial bank guarantee and performance bank guarantee requirements, amendment to the Indian Telegraph Right of Way (RoW) Rules, benefits for companies under the Rs 120 billion production-linked incentive scheme for building network products, developments in 5G trials for 5G roll-out, among others, which changed the face of the telecom sector.
The reform package was quick to alleviate the financial health of telecom service providers (TSPs), giving them the necessary impetus to re-inspire confidence in the sector for making investments. It not only gave operators a chance at survival but also prevented a feared duopoly that would have been detrimental for the sector.
Covid-19 has pushed the world towards digitalisation and accelerated the adoption of digital technology. It has helped us stay connected and businesses to survive, completely transforming the business paradigm forever. Today, we stand at the threshold of a digital revolution stimulated by 5G. It is the roadmap to the future growth and socio-economic development of our country, which aspires to become a $5 trillion economy by 2025. The wireless mobile user base is only going to grow in the future as more and more people rely on high speed connectivity for their daily utility. Therefore, there is a need to spur investment in this area to produce a reliable and affordable broadband connection that reaches every corner of the nation to provide connectivity. Through the National Broadband Mission 2019, the government has embarked on this intrepid journey of eliminating the digital divide by bringing broadband access to all the villages by 2022.
However, there are challenges. Being a capital-intensive sector, operators are hurdled by the insufficiency of telecom infrastructure to provide pan-Indian network coverage. An investment of around Rs 2.2 trillion is required in optical fibre infrastructure to fiberise 70 per cent towers in the next four years, and an investment of Rs 2.5 trillion will be required to establish a network of 1,500,000 towers connected to fibre in the next four years, as per the National Broadband Mission and COAI estimates. Huge investment is under way for procuring 5G network components but a large chunk of it comprises radiowave spectrum. During the last round of auctions, over 63 per cent of the spectrum remained unsold, pertaining to extremely high reserve prices compared to other Asian countries. As per COAI estimates, India has one of the lowest spectrum holdings of 62-79 MHz per operator in the sub-3 GHz band and does not have even sufficient spectrum in 3.5 GHz for 5G deployments. Hence, spectrum affordability becomes the biggest challenge for operators. Slashing the spectrum reserve price will provide relaxation to TSPs and speed up the adoption of 5G.
Operators struggle with other internal challenges spread across different states, such as non-uniform RoW charges, irrational regulatory levies such as licence fee, spectrum usage charge and universal service obligation levy. The government is yet to allocate high capacity backhaul E band and V band to eliminate the issue of backhaul as only 34 per cent of base transceiver station sites have been connected to fibre networks in the country. There is a lack of centralised regulated frameworks and single-window online portals for monitoring or managing digital growth, which causes this lag in implementation.
To better prepare for 5G roll-out, the industry has three major expectations from the new set of reforms: a reduction in spectrum pricing, infrastructure building and ease in licensing norms. The Indian market needs to get ready for 5G-enabled devices to have a successful roll-out in the near future. Apart from the developments and prospects of 5G in India, the year 2022 will pave the way for various other new-age technologies such as internet of things, big data analytics, artificial intelligence (AI), augmented reality (AR) and virtual reality (VR), drone technology coupled with 5G technology, which will positively impact various sectors. For example, these technologies will boost the agricultural sector by improving the yield, bringing transparency across the value chain, ensuring smarter supporting infrastructure while also increasing farm returns. The integration of technology in the classroom is the key to educating and skilling students for success. AR and VR will change the educational landscape by making learning more engrossing and tech oriented. Similarly, in robotics, India will benefit from increased productivity, reliability and scalability as the robotic process automation market is expected to reach Rs 135 billion by 2035.
By end 2026, 5G will represent around 26 per cent of mobile subscriptions in India, with an estimated 330 million subscriptions. Telcos’ investment in AI technologies for improving their infrastructure planning, operation and products will rise from 30 per cent in 2020 to 70 per cent in 2025. 5G is here to stay and is rapidly transforming our approach towards life and work. The future holds limitless possibilities for the sector to establish itself as an economic stronghold for the country by harnessing the potential of this new-age technology.
