In a two day conference – Telecom Infrastructure in India: Growth, New Developments, Issues and the Way Forward organised by tele.net at the Hyatt Regency, the keynote session on Infrastructure Provider Perspective discussed the future demand-supply outlook of the tower industry.
With telecom infrastructure and its management playing a key role in facilitating growth in the telecom industry, panelists B.S. Shantharaju, CEO, Indus Towers, Amit Sharma, President, Asia-Pacific, ATC Tower Company, Arun Kapur, CEO, Viom Networks, Rupinder Singh Ahluwalia, President, Business Development, GTL Infrastructure and Sai Ram Prasad, CTO, Bharti Infratel discussed the tower company?s perspective on key issues, concerns and emerging opportunities with the launch of 3G and BWA service roll out.
According to the panelists, data usage in India is still in its infancy. While it contributes to less than 10 per cent of traffic here, in the US, for instance, it comprises 80 per cent. However, with the launch of 3G and Broadband Wireless Access services, the revenue landscape is likely to change as the potential of data is fully explored.
?With the launch of 3G services there will be a deluge in data usage. This will call for the creation of faster networks to support higher bandwidth requirements? claims Kapur.
Deliberating on the competitive landscape of this sector, Shantharaju noted, ?While there are several infrastructure providers, nearly 98 per cent of the market is dominated by four to five key tower companies?.
Panelists agreed that while the tower coverage in the country has reached almost 90 per cent, 30-40 per cent of the teledensity still remains untapped. Thus, there is tremendous potential for growth in the passive infrastructure segment.
However, ?given the regulatory uncertainty presently, most telecom operators have slowed down their growth plans. This in turn has impacted the Infrastructure Provider (IP) industry as its growth is largely dependent on the service provider community,? commented Sharma.
It was felt that while the Telecom Regulatory Authority of India?s (TRAI) recommendations on Telecommunications Infrastructure Policy were by and large positive, it would be difficult to implement the recommendations at the state level. The panelists also strongly objected to the regulator?s view that infrastructure provider companies should be brought under the Unified licencing regime.
According to Ahluwalia, though the infrastructure providers have propagated high growth for the telecom sector, the government has not given any incentive or tax benefits. ?Despite assisting new operators in rolling out networks in 18 months, we are still considered vendors and not the operator partners,? stated Ahluwalia.
The next logical step therefore would be for the government to help the telecom industry move forward. ?Also, at a local level, the charges imposed by municipal corporations should be uniform. Currently, no clear-cut rules for tower placement exist, which has led to tower companies paying extra levies,? says Sharma.
According to the Shantharaju, to ensure growth of the Infrastructure industry, there is an urgent need to keep costs low.
Today, any infrastructure player spends over Rs 3 million to set up a tower in normal terrain and an additional Rs 1 million in a difficult terrain. These costs are often not recovered and companies have inadequate funds to invest in passive infrastructure.
Going forward infrastructure players are currently not looking to roll out more towers. Though they estimate a requirement of over 1,00,000 more towers over the next three to five years, their focus is more on achieving operational efficiencies and in reaching an optimal tenancy ratio of around 2.5 to 3 per tower.
Tower companies also see a huge opportunity in deploying energy efficient solutions. According to Prasad, Bharti Infratel has launched a 7 point strategy, called B7 to achieve energy efficiency, use renewable energy solutions, solar hybrid systems, efficient DG sets and adopt new battery solutions.
