The past year saw the vendor community undertake key initiatives to support the giant leap towards 5G. Network upgradation, 5G trials and augmentation of infrastructure were some of the many initiatives taken by telecom vendors. Leading telecom network, equipment and technology vendors share their views on the performance of the sector in 2021, the key initiatives taken during the year, the opportunities in the evolving 5G ecosystem and the future outlook…
How did the Indian telecom technology landscape evolve in 2021? What were some of the key business highlights for your company?
The year 2021 was an exciting one for the telecom industry. By ensuring that networks are able to manage the massive data loads, thus, enabling business and life to continue uninterrupted – the telecom industry has played a crucial role in keeping India running. If anything, the ongoing pandemic has underscored the significance of connectivity. As per the recent Ericsson Mobility Report, the average traffic per smartphone increased to 18.4 GB per month in 2021, up from 16.1 GB per month in 2020, owing to the reliance on mobile networks to stay connected and work from home.
We witnessed critical developments in this sector such as allocation of spectrum for conducting field trials; introduction of the production-linked incentive (PLI) scheme to support local manufacturing, amongst others. We are confident these steps will provide impetus to the overall industry growth.
In fact, various 5G field trials conducted successfully have set the stage for 5G service roll-out in the country. Bharti Airtel and Ericsson demonstrated India’s first 5G live network in Hyderabad, along with trials in Gurugram and Manesar. This was followed by a demonstration of India’s first 5G rural trial in Bhaipur Bramanan village on the outskirts of Delhi/ NCR. Ericsson also partnered with Vodafone Idea Limited (Vi) to showcase the power of 5G to reach healthcare in remote parts of the country. This demonstration showed how a doctor located in an urban centre can carry out an ultrasound scan on a patient who is in a remote rural location, using Ericsson’s 5G infrastructure. The telco also demonstrated blazing speeds of 4 Gbps in November as part of the trial.
From an overall business perspective, India ranked amongst top five contributors to Ericsson’s global sales, with sales being majorly driven by the continued investments in LTE (long-term evolution). With 5G spectrum auctions expected this year, 2022 holds a lot of promise for the sector.
The year 2021 witnessed a turnaround for Indian telecom service providers (TSPs). Open cloud architecture is increasingly being embraced by telcos as a part of their cloud-native transformation as next-generation service providers. Telecom operators in the country are seeking to be future-ready by leveraging new technologies such as artificial intelligence (AI), machine learning (ML) and data analytics to reap 5G benefits. As the transition to 5G is accelerated, Indian telecom operators are gearing up to leverage new revenue streams by becoming digital service providers.
The Indian telecom technology landscape is at its most promising juncture, with the 5G technology expected to be rolled out in the country soon. NEC Corporation has been at the forefront when it comes to telecom technology deployment in India. The company is investing heavily in its India operations through various centres of excellence (COEs), research and development (R&D) laboratories and a huge pool of talent working behind these innovations and technologies. The company’s footprint has expanded in the past one year through both large enterprise and government projects.
NEC’s first open RAN (O-RAN) lab was inaugurated in December 2020 in Chennai as a part of the company’s plan of “In India, for India and from India for Global” and to contribute to the 5G market actively.
Owing to the pandemic, which brought about a massive demand from enterprise businesses at the operators’ end, the main focus throughout the year has been capacity upgradation, be it in base stations or microwave backhaul. The year saw a lot of investment in cloud and virtualisation across telecom operators. With this insight, at NEC, we have introduced our high-capacity E-BAND solutions in India, with equal focus on 5G O-RAN as we lead the global market. Over the past one year, we have been working on hybrid solutions that can cater to 4G and scale up to support 5G for various operators in the country. After the successful completion of 2,300-km long Chennai-Andaman submarine cable project, we have been recently awarded the prestigious Kochi-Lakshadweep submarine project.
This year brought spotlight on the need for digitalisation across every segment. The increase in data traffic provided opportunities for consumer businesses to grow and a strong need for digitalisation drove industries and enterprises to invest more in capacity building, cloud infrastructure and data centres. The lockdown hampered network expansion and roll-out by restricting telecom equipment and workforce movement. With global issues such as the chipset shortage and supply chain disruptions, the industry faced numerous challenges. Despite all restrictions and supply chain issues, Nokia was able to roll out over 150,000 sites in 2021 that include new sites, expansions and relocations and we intend to continue this pace in 2022 as well to help our communication service provider (CSP) partners enhance their capacity, reach and service capabilities. We launched our next-generation AirScale 5G portfolio in 2021 powered by ReefShark technology, which provides high capacity, high power efficiency and OpEx efficiency, along with ease of deployment for a faster roll-out. Our CSP partners in India will hugely benefit from these state-of-the-art products. We continue to proudly maintain our position as a leading telecom supplier in India, with a presence across all four CSPs.
2021 was a transformative year for the Indian telecom industry. Continued Covid-19 lockdowns and associated mobility restrictions have brought about a marked change in network usage habits. What’s more, WfH (work from home) and LfH (learn from home) have become the norm and consumers are increasingly relying on the internet for their daily needs, socialising and entertainment. As a result, we saw significant surge in data traffic on telecom networks with instances of one year’s worth of traffic observed only in a matter of weeks. Overall, there is a sharp rise in demand for new home broadband connections based on FTTX (fibre-to-the-home/ office) technologies both in cities and small towns across the country. The growth in the broadband traffic called for increasing investments by telcos in dense wavelength division multiplexing (DWDM) and optical transport networking (OTN) technologies to augment capacities in their metro and long-haul networks, even as they continued to focus on cell tower fiberisation and densification to efficiently cater to the growth in 4G traffic. With the advent of advanced 5G networks in the near future, these trends are expected to sustain or even accelerate further.
From a business standpoint, 2021 has been a good year overall for Tejas and we ended the year with the largest order book in our company’s history. We continued to execute on our strategy to grow international business and register new business wins in Africa, Southeast Asia and the Americas. In India, we were selected as a gigabit passive optical network (GPON) equipment supplier for multiple regional and pan-India FTTX roll-outs. Besides FTTX, we were selected by Airtel to supply our state-of-the-art multi-terabit OTN/DWDM products for their metro capacity expansion for 5G. The company continued to be a preferred telecom equipment vendor in India’s critical infrastructure sector and won multiple contracts in the power sector, railways, smart and safe city tenders. In 2021, we saw significant increase in orders from this segment for the full range of our products that covered optical networking, packet switching and broadband access.
We are also happy that Tata Sons, a $100 billion plus global conglomerate, has acquired a majority stake in Tejas Networks through its wholly-owned subsidiary, Panatone Finvest recently. This gives us access to new resources and capabilities to drive more value for our clientele around the world and the opportunity to build a world-class top-tier global telecom equipment company from India.
What are your views on India’s 5G readiness from a network/equipment point of view? How are you engaging with your partners /telcos on this front?
We believe that the industry is ready for 5G. For effective commercial roll-out, it is imperative that 5G spectrum is made available at reasonable prices. Given the “long-term benefits” that 5G technology will bring to India, it needs to be viewed as critical infrastructure and the foundation on which the Digital India vision can be realised.
It is worth highlighting that Ericsson’s Radio System hardware has been 5G-ready since 2015, enabling operators to upgrade to 5G with a remote software installation. With 5G expected to be rolled out by the second half of this year, reliable indoor coverage will be one of the major focus areas. According to the Ericsson Consumer Lab report titled, “Five ways to a better 5G”, one in five 5G users globally are already reducing their dependency on Wi-Fi as they are experiencing better connectivity on their mobile phones even in indoor areas. Going forward, it will be imperative for the sector to make fresh investments to deploy street infrastructure such as small cells and in-building solutions for deploying a robust 5G network to offer a seamless network experience.
At Ericsson, we have been engaging closely with our operator partners as well as the academic community, to test and curate various 5G use cases that are most relevant for the country. In fact, the trials that we carried out in 2021 showcased the possibilities that 5G will enable for consumers and enterprises in India.
5G can create new possibilities for India’s people and business, but network modernisation is the need of the hour to enable higher speeds and a seamless experience. At Cisco, we are engaged in 360-degree relationships with all leading TSPs in India, helping them build open, secure and intelligent networks, enhancing their go-to-market strategies and ensuring greater returns on 5G investments. With our new service provider portfolio, we have made it easier than ever before, for service providers and web-scale companies to build and operate mass-scale networks for the 5G, AI and internet of things (IoT) era.
5G is an emerging technology ecosystem, the operational boundaries of which are still shaping. While the know-how that exists worldwide is promising, the business model around the same needs to be further developed and made stronger for a seamless roll-out. India is uniquely poised for success vis-a-vis the global 5G market, given the sheer size and user base. This is a clear reflection of the capacity for scale that the country holds with regard to telecom operations. There is immense scope for India to become a cost-disruptive geography for 5G globally.
India is still grappling with low fibre penetration, making it difficult for 5G high capacity to be actualised. The disparity in this density between rural and urban belts in India and the lack of uniform fibre penetration across the country will be one of the key challenges for the industry to solve. From a capability’s perspective, NEC India is fully equipped to support the increased backhaul demand that this tech roll-out will pose. 5G base stations in both O-RAN and D-RAN mode are available for testing in India currently. Our latest project, creating an OpenRAN 5G network for Rakuten in late September gives us an advantageous position in the market as OpenRAN provides enormous flexibility and opportunity for operators to better deploy their cash, as opposed to conventional 5G models. On the telco front, we are currently engaging with leading telcos for the promotion of 5G and microwave solutions in India.
India has officially started its journey towards 5G with 5G trials underway. India stands to gain economic and social value from 5G with India relevant use-cases for affordable healthcare, rural connectivity, smart cities application, etc., in addition to faster network speed and new business models. While earlier motivations for India 5G trials were to validate the technology, India trials are now from the perspective of use-case validation and the co-existence of 5G with existing technologies, including 4G.
Nokia is actively engaged with all three CSPs – Bharti Airtel, Vi and Jio for 5G trials. We have made several public announcements on the milestones achieved during the trials. To mention a few – we recently conducted the first 5G standalone trial with Airtel in the 700 MHz band demonstrated a range of 5G use cases, in collaboration with Vi at Gandhinagar, Gujarat. Our global delivery centres in Chennai and Noida are already handling 5G network operations for CSPs in several countries, while our R&D centre in Bengaluru is heavily engaged in 5G – be it research work, use cases or applications. We have achieved the trusted source approval by the National Cyber Security Coordinator (NCSC) – that qualifies us as a trusted supplier of 5G technology solutions in India.
With 5G spectrum auctions scheduled to be held in the financial year 2023, full-scale roll-out of 5G services is 18-24 months away. This presents the government a great opportunity to help create a complete domestic ecosystem for 5G by incentivising design-led manufacturing as has also been proposed in this year’s budget. India has all the necessary elements to create a vibrant domestic ecosystem for designing and developing 5G radios and backhaul systems, software, chips and handsets.
Moreover, 5G will drive a new cloud-based architecture that will make the network predominantly software driven, which makes it ideally “sweet spotted” for India with its strong software and design talent pool. When coupled with the mission-critical nature of several 5G use cases, inherent vulnerabilities of key technologies underlying 5G implementations such as IoT, internet protocol and cloud services and changing geopolitical dynamics, there are major security concerns regarding 5G network implementations. The focus for policymakers is, therefore, to ensure a careful selection of trusted domestic suppliers for the design, construction, maintenance and management of the 5G networks.
Tejas’ indigenously designed and developed TJ1400 product supports 4G RAN functionality today and can be upgraded to support 5G NSA mode as per 3GPP standards.
What are your views on the government’s Atmanirbhar Bharat mission? How are you contributing to this mission?
India is a strategic market for Ericsson and for us and we have been present in the country since 1903. We are committed to the country and will continue to invest. To this effect, we have participated in the government’s PLI scheme for the telecom sector and additional investments made under this scheme will help us scale our Pune facility. We stay committed to India and look forward to the opportunity of helping Indian service providers seamlessly evolve their networks from 4G to 5G.
In fact, Ericsson was the first telecom equipment vendor to start manufacturing in the country in 1994. Since then, we are catering to all requirements for supplies in India from our Pune facility as well as exporting both 4G and 5G gear to other countries.
NEC has been India’s long-standing partner, committed to the country’s growth and realisation of the Atmanirbhar Bharat mission. Our 2025 vision is to accelerate growth in India. Banking on the brand legacy, NEC India is building global COEs in India across multiple domains, strengthening the R&D lab in Bengaluru (one of the seven in the world) and inching towards its mission of delivering “Made in Japan” quality solutions out of India. Our global development centre in India across sectors, including telecom, manufacturing, logistics, etc., is one of our crucial growth drivers where we leverage our solution development and delivery capability from India to aid global business growth.
We fully endorse and support the government’s Atmanirbhar Bharat mission and are fully committed to the cause. Our factory in Chennai has been producing telecom equipment since 2008 and we have been exporting telecom equipment to markets including the US, Europe and the Asia-Pacific. We were the first to start the manufacturing of 5G NR products in India. With commercial 5G services expected to be launched this year, after the completion of the ongoing trials, companies are investing in indigenous manufacturing of the 5G network equipment and our Chennai factory is well equipped to cater to the domestic demand, alongside the ongoing exports.
Telecom equipment manufacturers have produced more than Rs 62 billion worth of products, with an investment of close to Rs 2.47 billion since the launch of the PLI scheme. Nokia is one of the major investors and producers and we intend to grow our manufacturing base in India.
The Government of India’s Atmanirbhar Bharat mission is a welcome step and will give a massive boost to indigenous telecom R&D and manufacturing in the country. As part of this mission, the cabinet has approved several forward-looking measures such as the Rs 120 billion PLI scheme for telecom and networking equipment and the national security directive on the telecommunications sector, which, if effectively implemented, will promote self-reliance, strengthen national security and increase domestic value addition in the country. As India’s leading R&D-driven telecom products company, our indigenously “designed and Made-in-India” optical, broadband and data networking products are deployed in all large telco and mission-critical networks in the country. We are the largest telecom equipment supplier for many government projects of national importance such as the BharatNet, railway WiFi and national knowledge network and look forward to contributing our part in upcoming projects such as extension of BharatNet to every village, BSNL’s pan-India 4G expansion, and safe and smart cities to help realise our prime minister’s dream of an “Atmanirbhar Bharat” in the high technology sector. The size of the global opportunity is huge.
Going forward, how do you see Indian telecom networks transforming to become future-ready? What will be the key opportunities and challenges?
Given the surge in mobile data traffic over the years, networks have become more complex. To handle current requirements and become future-ready, telecom operators are looking to manage the network complexities, while ensuring their efficient management. Operators are increasingly adopting technologies such as AI and ML to manage their network operations better.
Running a 5G network, combined with the demands of increased connectivity and mission-critical use cases is only possible when applying AI automation and data analytics. Evolving consumer expectations means there will be a strong shift to a “customer-centric” network and an IT operations approach that is more responsive to customer requirements. AI operations and optimisation tackles these challenges by providing proactive, preventive operations, reduced fault detection and resolution time as well as enhanced performance.
The growing momentum in 5G innovation rests on its ability to serve a wide range of use cases with technologies such as gigabit performance, edge computing, network slicing and inherent security. Looking ahead, 5G provides innovators with an open network platform that offers all benefits of the previous technology generations – resilience, robustness and security, among many others – as well as being designed for innovation and global scaling.
Service providers have an opportunity today to play a vital role in the recovery from the Covid-19 crisis. Enterprises will increasingly become a significant market for TSPs as they get more distributed, virtualise their processes and workflow and switch to hybrid work and business models. TSPs are the lynchpin of this hybrid world, enabling seamless and secure connectivity, access to information and collaboration.
First and foremost, we foresee Indian telecom networks becoming virtualised, software-centric and modular. In many ways, the telecom network will follow the path of the IT transformation. We are beyond the point where one could achieve competitive positioning just by lowering price points. Indian consumers have matured to seek out telcos that can keep up with their on-demand services, which will lead to massive innovation on all fronts. We will get to see massive convergence of the network and IT world to optimise the overall management and delivery.
Telecom networks are the backbone of ICT services, facilitating ecosystem convergence across domains. Especially technology and telecom domains are interlinked through integral points such as carrier data centres, cloud players, hyper convergence players, IT companies and global capability centres in the country.
Transformation in this sector can be accelerated by introducing new and modified business models that are easy for enterprises to adopt. The business models should be customised depending on the enterprises’ requirement and tailored to suit various needs of the sectoral spectrum.
We see a huge potential in personalised services using telecom innovation. The future will hold space for high-capacity solutions such as 5G, O-RAN, cloud and E-BAND like never before. However, high 5G spectrum prices and lack of uniform fibre penetration will continue to be major challenges.
India has been witnessing an uptick in data consumption with consumers spending a total of 4 hours 48 minutes on their smartphone per day – among the highest in the world. We have also seen the average monthly data usage per user grow almost 17 times over the past five years (source: Nokia Mbit report Feb. 2021).
This is further set to change once 5G is introduced in India as it is set to bring a paradigm shift in the role of mobile technologies beyond connectivity. Along with related technologies such as edge computing and AI/ML, 5G will enable CSPs to reinvent and transform into digital service providers. They will be able to address new segments such as automotive, energy, agriculture, healthcare, manufacturing and public transport, among others. Furthermore, it will also lay the foundation for a connected digital society. However, successful adoption of 5G will take the combined efforts of the government, CSPs, equipment vendors, enterprise and ecosystem partners. Cooperation among stakeholders will be key to making 5G a reality in India and realising its full economic and social value.
India is an exciting telecom market, given the exponential rate at which data usage is growing and the increased digitisation of our economy. The pandemic has catalysed the stagnant home and small and medium enterprise broadband market in India. Going forward, we expect to see significant growth in this segment, with massive country-wide roll-outs of GPON/10G-PON based fibre broadband networks. ARPUs offered by fixed broadband services are at least 3-4x that of 4G, which is a huge incentive for telcos to invest in fibre broadband networks. With over 100,000 GPON optical line terminal ports shipped in the past three years, Tejas is among the top 10 companies in this space and has been selected as a supplier by leading Indian service providers for their pan-India FTTX roll-outs.
In terms of optical networks, telcos in India are making significant investments in upgrading their metro and backbone network capacities to cater to the exponential traffic surge, while preparing for the impending 5G roll-outs.