Peeyush Vaish, partner and telecom leader, Deloitte India

The roll-out of 5G and satellite communication services has ushered in a new era of development in the telecom space. Together, these technologies hold immense promise for enabling the transition of the telecom sector from a service provider to a service enabler. In an interview with, Peeyush Vaish, partner and telecom leader, Deloitte India, discusses emerging opportunities in the telecom space, key challenges in the sector and the way forward…

How is the telecom sector emer­g­ing as an enabler in India’s dig­i­tal transformation?

The changing times have created a plethora of opportunities for telecommunication com­panies to move towards the role of a service enabler from just be­ing a service provider. By us­ing te­chnologies such as 5G and satellite communication, the usage pattern will shift towar­ds internet of things (IoT), augmented and virtual reality, and cloud computing. The telecom industry has started serving as an enabler and a force multiplier for all other sectors, including banking, education, health, and automobile, by setting the groundwork for future advancements. Going forward, the telecom sector will see an upsurge in enter­prise revenues.

What are your thoughts on the government’s recent initiatives to drive the growth of the sec­tor? What other steps are needed in this regard?

The reforms announced by the government in September 2021 mark the beginning of a new age. They are indicative of the government’s resolve to bolster the industry’s growth and tackle the long-standing challenges faced by the sector. The­se reforms also empower telecom ser­vice providers (TSPs) to address their liquidity woes and reduce their cash flow pressure. A dip into the Universal Service Obligation Fund to increase fiberisation in rural areas could also help in the spee­dy roll-out of 5G services.

How is the satcom space evolvi­ng in India? What role will it pl­ay in the internet/broadband sp­a­­­­ce, es­p­ecially in rural areas? Wha­t op­p­ortunities will it open up for sta­keholders in the telecom domain?

Satellite communications will play a pivotal role in India by pr­o­viding broadband in rural areas at aff-ordable prices. Also, given the fact that only 25-30 per cent towers are fi­berised, sat­com will be beneficial for backhaul network connectivity. India is on the right track and is making progress in the satellite communication space, with satcom companies partnering with Indian manufacturers to build satcom gear. A prominent Indian te­lecom operator is teaming up with a Br­it­ish company to roll out satcom services. Satcom will also be a low-cost and feasible option to provide 5G services in disconn­e­c­ted rural and distant places, thereby complementing 5G rather than competing with it.

How soon can we expect the commercialisation of 5G services in India? What new op­p­ortunities will it open up for telcos?

As part of the recent telecom reforms, the government specified that it would come up with a calendar for auction. With the operators already having carried out 5G trials on the trial spectrum released earlier by the government and the minister indicating that auctions would happen in the first quarter next year, we will definitely see the roll-out of 5G in the first half of 2022.

Unlike the previous-generation technologies, the industrial uptake of 5G is going to be very significant in terms of automated factories, IoT and robotics. Further, 5G will enable enhanced video qua­lity to support 4K/8K content and make streaming of live sporting events far smoother. Also, cloud gaming, which has become very popular in India, will see a significant uptake with the younger population (Gen Z).

What are the key challenges hampering the growth of the telecom space?

We are much behind in the fiberisation of towers (just 33 per cent) as compared to other digitally advanced economies in the world and need to achieve a target of 70 per cent to fully enjoy the benefits of 5G services. The leverage stress on the balance sheet of operators, coupled with the upcoming auctions, leaves little money for network upgrades and 5G roll-out. TSPs also need to work together to gradually increase tariffs to a sustainable level to be able to invest in the future. Moreover, cy­bersecurity challenges and underlying regulations will surely be a high priority.

What is the outlook for the Indian telecom space? Which technologies/trends will be driving growth for the next two to three years?

India will be the second largest smartphone market by 2025 and this will help push some of the most attractive services to consumers. Operators must look beyond connectivity and focus on offering end-to-end solutions for both enterprise and consumers as old business models based on content alliances will soon become history. TSPs will need to differentiate themselves with multiple subscription-based services and artificial intelligence/machine learning-based segmentation of subscribers will be the key to revenue uptake. With internet penetration below 40 per cent in two-thirds of the states, there is a significant opportunity in the Indian market for vernacular content and applications that touch the life of every Indian.