2020 has been a tough journey for Indian telecom Industry. With AGR penalties on Airtel and Vodafone, the industry has seen turbulent times. Capex investments have seen a downward trend. At the same time, Reliance Jio and Airtel have led the telecom market. The industry is moving towards duopoly in the private sector with Jio and Airtel. Jio has received $28 billion investments from multiple firms and in that context, it seems positioned for future investments.
Mobile data consumption has grown steadily. However, 2021 is going to be defining moment for telecom sector as 5G arrives in. It is expected that there will be $30 billion capex investment for 5G.
With the pandemic accelerating the digital first approach across all verticals, Indian telecom sector is set to undergo massive disruption on the heels of the 5G revolution. The year 2020 has been the turnstile for digital adoption in the country. With life going digital at every touchpoint, 2021 is going to be equally aggressive on making the transition as seamless as possible. Telecom and ICT of course, will play the directive.
Digitising India is the key focal point of the industry, with various discourses happening around strengthening the digital infrastructure for the future of Digital India and making India self-reliant. Telecom serves as the backbone for several industries including digital health and telemedicine, edtech, entertainment through OTT platforms, fintech and digital banking, e-commerce and even remote working and management for enterprise/corporates.
All these verticals have been depending on seamless connectivity to further achieve maximum customer retention and customer experience to drive their business. With Covid-19 revealing the gaping holes of connectivity in India, the next year will be set aside for patching the connectivity quilt seamlessly to nurture and deliver on the digital India dream.
When it comes to enterprises and corporate workspaces, connectivity is the axis on which they have been functioning. With more than 80 per cent of the workforce migrating suddenly to work from home (WFH) practices, the connectivity issues that the heightened traffic ensued was nightmarish. Now, as more and more enterprises switch to cloud and IoT based business models, seamless connections become an inevitable requirement.
India is currently the second largest telecommunication market and has the second highest number of internet users in the world. The conversations and propositions for rolling out the next big technology, i.e., 5G is as high as it has gotten. It will be a crucial factor determining, not only the future of Indian telcos, but also the digital infrastructure in totality. As per industry reports, revenue from the telecom equipment sector is expected to grow to $26.38 billion by the end of 2020. The number of internet subscribers in the country is expected to double by 2021 to 829 million and overall IP traffic is expected to grow four-fold at a CAGR of 30 per cent by 2021. Here are my thoughts on how Indian telecom sector will chart its journey in the aftermath of a pandemic.
Focus on fiberisation and infrastructure development: India’s current penetration into fiberized connectivity is less than 30 per cent of mobile towers and 7 per cent households. In order to usher in 5G and high-speed connectivity, heavy fiberisation and infrastructural development has to be made and is going to be a major focus area for 2021 and beyond. In order to carry high capacity 5G, entire Fiber network needs to be upgraded. I anticipate massive investments not only by private telecom players but BSNL as well. With government mandate to Fiberize, every village/town, we can expect massive development in this space.
Advent of O-RAN as a popular choice for 5G: The promise of 5G is the biggest growth driver in the sector. O-RAN and its immense possibilities for collaborative work between vendors and telecom operators. ORAN needs to be popularised in order to make the transition to 5G seamless and cost effective. Encouraging integrated operational network and ensuring interoperability is key. 5G success depends on open innovation and that can only be brought by flexibility driven by open RAN and corresponding Cloud infrastructures. Currently every Indian operator are on Open RAN exploration phase. Industry needs to come together to ensure that Open RAN becomes dominant in coming years.
Increased adoption of telecom and ICT services for Industrial revolution 4.0 & connected ecosystem: Industrial IoT, connected mobility, smart homes and autonomous appliances and gadgets are all heavily reliant on hyper connectivity. This trend will continue to rule the roost in 2021. Smart cities too are also going to need a robust digital neural network to function seamlessly. 2021 will be year of hyper verticalization (healthcare/education/manufacturing etc.) and it will be supported by flexible network architectures.
Digitising customer touch points: Life is going uber modern in all aspects with technology intervening at every human interaction point. Biometrics to Robotics, deep technology has become part and parcel of everyday human life. As more devices get connected, the data consumption will also proportionally increase, with the current state of infra, it is sure to open up a plethora of connectivity issues and slow browsing speed. The latest outage of UPI/Digital banking platforms are just a glimpse of what lies ahead, if we do not address the issue soon
Optical fibre connectivity in the suburbs and rural India as part of the Digital India mission will continue to gain momentum: With minimum infrastructure available, Rural and Suburb India is missing out on the hyper connectivity wagon. The relevance and advantage of Microwave Backhaul is put to test in this scenario. MW Backhaul is economic and easily deployable technology that can ensure seamless connectivity even in Rural clusters. We will need to encourage wider adoption for the tech as we near data user/telecom subscriber saturation threshold
Green Telecom will be on the rise as sustainable practices take the mainstage across verticals: Tower industry and telecom operators will need to consciously take a step towards lowering their energy consumption and look at means to develop without hurting the environment further. Alternate energy sources to power operations are sought and the intervention has already happened at a ministerial level
Telecom Security: In 2021, we will see an era of hyper connectivity (anything, anywhere and anytime). This will create immense security challenges and hence, security will become extremely important. There will be imminent threats and hence, entire device, application and network infrastructure eco-system needs to develop security mitigation strategies.