The year 2020 can easily be termed as the year of broadband, with the Covid-19 pandemic being the single biggest driver for the segment. In a bid to provide seamless connectivity to millions of people working from home, the expansion of 4G coverage emerged as the key theme. The fibre-to-the-home (FTTH) segment gained traction as high speed connectivity became paramount. Further, satcom was explored as a suitable alternative to extend connectivity to rural and remote areas, where terrestrial means ceased to work. Towards the end of the year, the government gave its approval for the PM-WANI project, which is likely to alter the landscape of the public Wi-Fi market in India. While the industry did not witness the sale of 5G spectrum, the technology landscape evolved significantly, from the emergence of promising use cases to talks around developing indigenous 5G capabilities.
A look at the key trends that dominated the internet and broadband segment during 2020 and the future outlook…
FTTH takes centre stage
Covid-19 in many ways has underlined the importance of fixed broadband networks. Fibre is now being considered essential and an “absolute must” for supporting next-generation data-intensive networks. As working from home has become the new normal, the need for fixed broadband has become more pertinent than ever. In fact, Covid-19 caused a multifold increase in demand for fibre connection as millions of people stayed glued to their phones and laptop screens. For instance, Airtel Xstream recorded a 50 per cent jump in streaming volume during the lockdown. Further, the number of daily sessions per user was up by 40 per cent as people spent more time inside homes. Likewise, in March 2020, ACT Fibernet witnessed an over 40 per cent surge in peak traffic on its network and Excitel witnessed a three times increase in new installations during the beginning of the lockdown period.
In an effort to tap this increasing demand, operators took key initiatives during the year. For instance, BSNL prolonged the provision of its Rs 499 Bharat Fiber entry plan from March 31, 2020 until June 29, 2020, when lockdown restrictions were most stringent. Also, Airtel announced plans to expand its Xstream Fibre offering to 25 more cities. To this end, the telco has been accelerating collaboration with local cable operators for upgrading its copper network to FTTH.
4G remained high on the agenda
4G remained a key highlight during the year as operators focused on expanding their capacity and coverage. Airtel, for instance, became the first operator to launch 4G services in Ladakh. The operator has been rapidly expanding its 4G footprint in rural hamlets of Ladakh and connecting the region to the digital superhighway. Following this, over a dozen remote villages in the districts of Leh and Kargil in Ladakh will have access to 4G services.
In another development, BSNL, in October 2020, installed three 4G base transceiver stations in the Atal Tunnel, which is situated at a height of 13,051 feet, to offer 4G connectivity. The telcos also launched a SIM upgradation campaign in areas where it rolled out 4G services, including in Himachal Pradesh. As part of this campaign, customers who are using 2G and 3G BSNL SIMs can upgrade to 4G SIMs free of cost. The state-run telco currently offers 4G services through its 3G spectrum in some areas of Kerala, Andhra Pradesh, Telangana, Tamil Nadu, Karnataka, Maharashtra, Gujarat and Kolkata.
Meanwhile, Vi upped its 4G game by refarming its 3G spectrum for the provisioning of 4G services across 11 cities in Gujarat, Bengaluru, Delhi and NCR, and Mumbai to substantially enhance its GIGAnet 4G capacity. As part of this exercise, the operator deployed 5 MHz of 2100 MHz spectrum in the respective circles, thus enabling its customers to enjoy higher download and upload speeds, and better indoor coverage. This helped Vi in upgrading its 3G users to 4G in key markets and get on par with competitors Bharti Airtel and Reliance Jio that have a larger 4G subscriber base. Further, the telco’s enterprise customers currently using 3G-based services are being upgraded to 4G and 4G-based IoT applications and services in a phased manner.
Enhancing rural connectivity with satcom
Of late, there has been an increased focus on using satellite connectivity to meet the country’s increasing communication needs. While terrestrial connectivity mediums such as towers are feasible and economically viable to be deployed in urban areas, the cost of providing terrestrial connectivity increases by 10-20 times in rural and remote areas, thereby making it economically unviable for the last 20 per cent of the population. It is in such areas that broadband through satellite will serve as an ideal solution as it will not have to face the challenges associated with right of way and huge capex requirement for the roll-out of terrestrial technologies. In October 2020, Hughes India was selected by Bharat Broadband Nigam Limited and Telecommunications Consultants India Limited to provide high speed satellite connectivity to 5,000 remote gram panchayats spread across over 15 states and union territories. These include the hilly states in North and Northeast India, the heavily forested states such as Chhattisgarh and Jharkhand, and island territories such as the Andaman & Nicobar and Lakshadweep Islands. Among the Northeast states, the project will cover Manipur, Meghalaya, Tripura, Mizoram and Arunachal Pradesh as well as the Galwan valley in eastern Ladakh.
Debate on E and V bands
The increased focus on improving rural and remote connectivity has brought to the fore a new debate around spectrum allocation in the E and V bands. E and V band spectrum has significant commercial value. The airwaves in these bands can transmit data at very high speeds. Thus, they are the most conducive for providing high speed broadband services, especially in remote areas, and for better in-building coverage. Further, these bands will play a critical role in the proliferation of 5G services in the country.
As such, the year 2020 witnessed intense debate amongst industry stakeholders over the approach that should be adopted to allocate this spectrum. The bone of contention is whether spectrum in these bands should be delicensed and administratively allocated or put up for auctions. While ISPs and tech giants are in favour of the former approach, telecom operators prefer the latter. However, according to industry sources, the Department of Telecommunications (DoT) has ruled out both auction and administrative allocation of spectrum. Rather, what is expected is a light-touch licensing approach, which is what TRAI suggested in its recommendations.
Progress under BharatNet Phase II
According to the government, as on September 1, 2020, a total of 23,133 GPs including block headquarters have been made service ready and 147,000 km of optical fibre cable (OFC) has been laid under BharatNet Phase II. The Covid-19 outbreak and the ensuing lockdown during the first half of the year impacted the progress of the project. As a result, the timeline for completion of Phase II was extended by the government and the project is now envisaged to be completed by August 2021.
The state governments had a key role in the project’s progress. For instance, the Odisha government aims to provide high speed internet connectivity to all gram panchayats in phases, by April 2021. As part of this, the government will work towards the provision of Wi-Fi connectivity at the main activity points of gram panchayats so that all government offices are able to stay connected. As per government estimates, as of October 2020, 22,541 km of OFC had been laid as against the target of 27,610 km in the state. The balance 5,069 km will be completed soon. Further, 4,651 gram panchayats and 230 blocks have been provided connectivity and the rest will be linked up in phases. Meanwhile, the Tamil Nadu government, in September 2020, had announced plans to connect over 12,500 villages through broadband in the next 18 months.
With the BharatNet project set to be complete by mid-2021, the government has announced that it now wants to take fibre connectivity to all the 600,000 villages in the country within 1,000 days.
New impetus to public Wi-Fi
In December 2020, the union cabinet announced the launch of the PM-WANI project to promote the development of public Wi-Fi networks in the country. As part of the project, public Wi-Fi networks will be set up by public data office aggregators to provide public Wi-Fi services through public data offices (PDOs). As per the government, there will be no licence fee or registration for opening such PDOs. Businesses can take services from Bharti Airtel, Reliance Jio or any other ISP and use their physical location to provide Wi-Fi to anyone who happens to be nearby.
As per industry sources, the government aims to increase public Wi-Fi access points four times to 2 million by end 2021. At present, India has around 500,000 hotspot access points. The PM-WANI policy will result in the creation of an enormous demand and scope for developing the components for this crucial, pan-India activity.
With the deferment of 5G spectrum auctions, it is clear that 2020 was not a favourable year for 5G in India. However, the space did see some key developments. In October 2020, Bharti Airtel and Ericsson strengthened their long-standing partnership with a renewed multi-year contract to supply and deploy 5G-ready radio and transport solutions from Ericsson. Vodafone Idea too said that it will be able to launch 5G whenever spectrum is made available through auction. Further, Vi upgraded its 4G network with 5G architecture and other technologies to make it 5G ready.
Meanwhile, Jio claims to have developed a completely home-grown 5G solution. This indigenously developed 5G solution will enable the telco to easily upgrade its 4G network to 5G and also enable the telco to launch 5G services in India. The company has said that its Made-in-India 5G solution will be ready for trials as soon as 5G spectrum is available and will be ready for field deployment in 2021.
Any further delay in 5G spectrum allocation will hamper India’s 5G dream. To this end, DoT is believed to be in discussion with the defence ministry, broadcasting ministry, and the Department of Space to vacate spectrum that can be used for commercial 5G roll-out. Since these ministries are already using sub-GHz, 600 MHz, mid, and millimetre wave bands for providing services, DoT is in consultation with them to identify which services can be shifted to other bands and made available for 5G auctions. Initially, DoT had identified the 3300-3600 MHz (300 MHz) frequency band for 5G services. However, as per the recent spectrum allocation document, the government is allocating just 175 MHz (3425 -3600 MHz) for 5G. In addition to this, DoT has also constituted working groups that will explore the implementation of 5G across various sectors.
The year 2020 proved to be a great one for the Indian broadband market. FTTH emerged in a big way and will continue to be instrumental in addressing the bandwidth demand in a post-Covid world. In fact, according to a recent report by GlobalData, the fixed broadband revenues in India are forecast to increase at a compounded annual growth rate (CAGR) of 6.9 per cent during 2020-25, driven by an increase in broadband ARPUs due to the adoption of higher-value plans by consumers.
Satcom is also expected to hold a significant share in the broadband space given its potential to connect the remote and rural hinterlands of the country.
In addition, the emergence of Wi-Fi 6 in the near future will help in delivering extremely high capacity, high speed, and highly secure broadband services to consumers by synergising with the PM-WANI model. Going forward, this would complement the future 5G roll-out in urban areas by providing similar services to the masses at large. s
By Diskha Sharma