The Covid-19 pandemic has highlighted the importance of fibre-based connectivity like never before. Since the beginning of the pandemic, telecom industry experts have been advocating the expansion of fibre-based networks to meet the massive demand for data-based applications. Further, the pandemic has given a new stimulus to in-building solutions such as fibre-to-the-home (FTTH) broadband, which require huge investments in fibre roll-out inside buildings and to the curbs. While a lot has happened in terms of scaling up fibre roll-out during the past year, more needs to be done to prepare the country for the upcoming 5G era to pave the way for the adoption of numerous other digital technologies.
A look at the key factors driving fiberisation in the country and the upcoming opportunities in this space…
Key growth drivers
Covid-induced demand for data
The primary growth driver for future-ready fibre networks is the surge in data usage being witnessed by the country especially after the onset of the Covid-19 pandemic. Post-Covid, applications such as remote working, videoconferencing, social media and telemedicine gathered steam and acted as a catalyst for data consumption. This strengthened the case for fibre-based networks as optical fibre cable (OFC) is crucial for the delivery of these high quality, high-bandwidth-demanding and content-rich services.
Fiberising towers and small cells
The rapid expansion of 4G services coupled with the government’s digital initiatives call for advancements in backhauling telecom towers with fibre. To this end, telcos have started revamping their backhaul networks to have a healthy microwave-fibre mix. This helps them leverage fibre’s virtually unlimited capacity and extensive reach. While operators are currently deploying a combination of microwave and fibre at their network backhaul, going forward they will have to make their networks entirely fiberised to roll out 5G. In fact, based on Nokia’s Mobile Broadband India Traffic Index (MBiT) report 2021, as the preparations for 5G roll-out gain pace, 70 per cent telecom towers will be fiberised in India by 2024, as against 32 per cent at present.
Fiberisation of small cells is another area that has started receiving industry attention, especially after the surge in indoor connectivity. Operators are increasingly deploying small cells to better manage the growing indoor data traffic. While small cells bring cost benefits, their efficacy is mainly dependent on the availability of a fibre connection. Small cell deployments often utilise millimetre wave spectrum, relying heavily on fibre-cabled connections for the backhaul portion of the network.
FTTH takes centre stage
Among the several transformational changes that the pandemic ushered in, the key one was the large-scale adoption of FTTH broadband. FTTH services emerged as an ideal medium to deliver high speed data as the country shifted to tele-working and virtual education. According to industry reports, FTTH connections in India grew from 0.7 million in 2014 to 4 million in 2020, and are forecast to reach 10 million by 2025. Further, as per Nokia’s MBiT report 2021, India’s fixed broadband subscriber base grew by 12 per cent year on year to reach 22 million in 2020. This growth was driven by operators’ as well as internet service providers’ (ISP) initiatives in the FTTH space.
While telcos bundled their FTTH offerings with OTT platforms such as Amazon Prime, Hotstar and Netflix, ISPs too started offering bundled plans. In a bid to compete with the likes of Jio Fiber, Airtel Xstream Fiber and BSNL Bharat Fiber, ISPs such as ACT Fibernet also introduced unlimited data plans at upgraded speeds. ACT Fibernet revamped its broadband plans across key cities such as Bengaluru, Chennai, Delhi, Coimbatore, Madurai and Hyderabad. Excitel, another ISP, managed to install around 25,000 FTTH connections during the first phase of the lockdown. As a result, the company witnessed a growth of around 55 per cent in its FTTH subscriber base in 2020, with a total of 500,000 users at end 2020.
Going forward, fibre is expected to emerge as the leading fixed broadband technology by 2025 and will hold a market share of 53 per cent, well ahead of digital subscriber line (DSL) and cable (35 per cent), fixed wireless access (8 per cent), and other technologies (4 per cent), as per Nokia’s MBiT report. This growth would be driven by operator initiatives in this space. For instance, Airtel has recently announced that it will stop offering copper-based broadband connections and only offer FTTH services in the country. It is also planning to offer broadband through the local cable operator (LCO) partnership model in over 1,000 cities, up from 120 cities currently. Further, Reliance Jio and Airtel have announced plans to reach between 75 million and 40 million FTTH home passes in the coming years. Meanwhile, state-run Bharat Sanchar Nigam Limited (BSNL), too, is gradually planning to add around 100,000 FTTH customers per month. In the ISP space, Excitel has announced its plans to expand services to over 50 cities by end 2021 from the current 19 cities.
Moving towards edge data centres
A key concept gaining prominence owing to the proliferation of several low latency and high throughput applications that require edge computing technology is edge data centres. Edge data centres are small, regional, cost-effective, automated, micro-modular data sites that can power high speed computing. Fibre connectivity is a critical component of these data centres as it is essential for ensuring link quality. Besides, the equipment responsible for transmission of signals relies on data centre fibre, as fibre cable is the only network infrastructure solution that can support data rates of 50G and beyond.
Going forward, as India enters the 5G era and technologies such as artificial intelligence (AI), internet of things (IoT), machine learning, big data and cloud computing become mainstream, edge data centres are expected to gain traction, thereby propelling the demand for fibre.
Laying the groundwork for 5G
As India gears up for the launch of 5G services, the volume of data traffic is expected to increase further. In order to deliver the kind of speed and capacity that a 5G network requires, it is necessary to scale up the deployment of fibre. As per industry estimates, the country needs to deploy 100 million fibre km OFC per year as against the current deployment rate of 25 million fibre km in order to have robust 5G connectivity. This is because deeper fibre connectivity to cell sites enables high capacity backhaul network, which is an essential foundation for 5G services. Moreover, 5G calls for building new-age converged networks, which combine fibre to the cell, FTTH and fibre to the enterprise to provide high speed connectivity.
Challenges and opportunities
While the industry as a whole seems to have realised the importance of enhancing fibre-based connectivity in order to leverage upcoming digital opportunities, many challenges still need to be addressed. These include delays in right-of-way (RoW) approvals that can increase the overall fiberisation cost per km, non-uniform and multiple fibre deployment policies across states, multiple levies, lack of an effective dispute resolution mechanism, and high reinstatement charges that need to be incurred after the deployment of fibre to compensate for the damages to roads or infrastructure, and the absence of a single-window clearance mechanism.
However, challenges notwithstanding, the trajectory of fibre roll-out in India is expected to move onwards and upwards in the coming years. This evolving fibre ecosystem would present a plethora of opportunities not only for telcos but also for other stakeholders such as towercos and OFC manufacturers. For instance, towercos are well positioned to leverage the fibre opportunity with their existing experience in managing distributed infrastructure assets. They can transition into neutral hosts that provide fibre to telcos and help them scale up their FTTH networks. Meanwhile, utilities in sectors such as power, gas, water and railways, which already are deploying fibre networks, can also operate as fibre providers for telcos. Moreover, the government’s Atmanirbhar Bharat programme can help lead the way for the next decade of network creation in India by incentivising OFC manufacturers to build scalable and robust fibre solutions that can support the roll-out of cutting-edge future technologies.
By Kuhu Singh Abbhi