The past two decades have been remarkable for the Indian telecom sector. By being a flagbearer of the Digital India initiative, the telecom sector has positioned itself as a core infrastructure service provider that can touch and transform over a billion lives. However, poor financial health continues to impact the sector’s growth prospects and its transition towards a 5G economy. T.V. Ramachandran, President, Broadband India Forum shares his views on the key achievements of the sector, challenges being faced and policy interventions needed to overcome these.
How would you assess the progress made in the Indian telecom sector over the past two decades? What were the key drivers of change during this period?
Telecom and, in particular, mobile telecommunications, have been, indubitably, the flagbearer of privatisation, competition and liberalisation in India. The great performance of telecom opened up a plethora of opportunities; brought forth numerous players, robust competition and affordable telecom at the world’s lowest end-user prices; and led to higher uptake of telecom services on a phenomenal scale. The remarkable takeoff of Indian telecom happened with the launch of the New Telecom Policy 1999 in April 1999, and the subsequent migration of existing operators to the new policy. The next decade (2000-2010) witnessed the explosive growth of the sector and the conversion of what was once a luxury commodity, into an essential utility for one and all, with the ubiquitous mobile phone penetrating to every nook and corner of the country and contributing significantly to the economic growth of the country. Such a game-changing mobile revolution had not been witnessed anywhere else in the world till then.
For the first time in India, an industry segment had successfully created a world-class digital infrastructure without a single rupee invested by the government. In fact, the industry has been consistently providing the exchequer, year after year, thousands of crores of rupees through spectrum payments, licence fees and various other taxes and levies.
The following decade could perhaps be called the “decade of data revolution” wherein the voice revolution of the earlier decade paved the way for increased use of data, and internet access soared. The rapid advancement of technology, the dramatic and disruptive arrival of 4G/LTE, the increased use of smartphones, and a reduction in the cost of data access have all led to a near explosion in data consumption, raising it to the world’s highest standard. The most significant highlight of the telecom sector in the past few years has been its transformation from a telecom services supplier to that of a digital communications services provider, taking a fully digital approach.
Another great milestone was the release of the National Digital Communications Policy 2018, which truly epitomises, in letter and spirit, the push towards creating a $1 trillion digital economy by 2022. The policy created with key inputs from TRAI and after months of intense consultations with all stakeholders, is balanced, strategic, detailed and lays down a clear roadmap for the entire sector. Even so, it is somewhat disheartening that such a fine policy remains largely unimplemented.
Acceleration of 4G deployments in the past couple of years has brought about staggering growth in mobile data consumption. From languishing at around the 100thposition in mobile data consumption in 2016, we have achieved the numero uno position in data usage in just three years. Average per capita data consumption shot up multiple times from around 250 MB per subscriber per month to nearly 11 GB. Most importantly, India became the world’s second-largest user of smartphones.
How different are the challenges for the sector at present as compared to two decades ago? What are some of the areas that urgently need policy and regulatory attention?
While earlier the focus was on mobile penetration, the emphasis has clearly shifted to achieving the Digital India programme, and making the digital revolution all-inclusive so that it acts as a tool for transforming the societyin an enabling manner. Digital India requires the entire underlying telecom infrastructure to undergo digital transformation. However, overhauling the existing infrastructure involves a significant cost and thereby requires increased investments. Based on a conservative estimate, the investment levels are expected to be upwards of Rs 5,000 billion.
Further, all playersneed to adapt to a different mindset since not only are customer expectations in the digital/data world quite different to that in the voice era, but business models are also quite diverse. Moreover, due to the high velocity of innovations and disruptive changes, all players have to be far more dynamic, flexible and attuned to market needs.
Do you have a regulatory/policy wish list?
Attention to the following areas of policy is required:
- Redesigning of spectrum auctions to help achieve optimal pricing
- Rationalisation of taxes and levies including issues around “double taxation”
- Implementing the Fibre First Initiative and setting up the National Fibre/Digital Infrastructure Authority
- Fiscal incentive for fiberisation of towers
- Acceptance of TRAI recommendations as regards the proliferation of public Wi-Fi hotspots through public data office aggregators/public data offices and Wi-Fi access network interfacearchitecture
- Opening up of E&V bands as per TRAI recommendations
- Permission of active infra sharing by IP-1s
- Rationalisation of RoW guidelines across the states
- Implementation of satcom initiatives, including the Open Sky Policy, as per NDCP guidelines
- Availability of low cost, long-term funds from a “Digital Infrastructure Fund”
- Acceleration of the BharatNet project including leveraging ongoing infrastructure roll-out by operators
Our greatest wish is that the NDCP 2018 be implemented immediately. This will help resolve most of the difficulties in the sector and propel the nation to the global digital centre stage.
From a long-term sustainability standpoint, strategic interventions are required to enhance viability, innovations, R&D, and speed up the adoption of new technologies.
What are your views on the evolving 5G ecosystem in the country? What are the key opportunities and challenges?
India made a great start in respect to 5G with the government setting up the multi-stakeholder High Level Forum for 5G. The multi-stakeholder forum developed a fine roadmap for placing India on the global 5G map. The other noteworthy factor is the development and promotion of a homegrown 5G standard known as LMLC (Low Mobility Large Cell), which seeks to put us on a par with global players. However, various challenges appear to have delayed our start.
Although we are at least one to two years behind the world, by commencing 5G trials at least in 2020, India has the opportunity to establish its own robust applications and business cases, without rushing headlong behind other nations. It would have been nice to be amongst the firsts, but it is better still to be sustainable in the long term.
At the same time, we need to fully exploit 4G/LTE and the latest LTE-advanced (4.5G) technology before rushing to adopt 5G. On 4G, we still have a long way to go in terms of coverage and speeds. We need to fully realise the potential of 4G while crafting our 5G strategy so that when we implement it, we have optimum results for India.
We also need to commence work as regards standards for 6G. Countries such as China, Korea and Finland are already ahead in this respect, and we need to hasten to catch up with them. Otherwise, we would be left behind in respect of 6G standards as well as manufacturing.
What is your outlook for the telecom sector in the coming years? What key trends will shape the future of telecom in India?
The next billion Indians who are yet to cross the digital divide offer huge untapped opportunity to Indian enterprises. Data consumption trends indicate that the outlook of the sector will continue to remain very positive in the immediate future. This is further enhanced by the NDCP 2018 and its progressive provisions to ensure that the government’s Digital India goals are being sustainably met. The continued organic growth of 4G into 4.5G, which offers almost the same benefits as 5G, and a smooth transition to 5G will be a catalyst for the growth of AI and IoT use cases across enterprises and this will drive the creation of new as well as additional jobs.
However, the emergence and adoption of new and higher technologies would also necessitate the implementation of advanced security measures, especially in relation to cybersecurity, 5G and IoT. The explosion of IoT and mobile end points in future and their associated security threats need to be addressed. Standardisation of the technology and device protocols would be key in this regard and may help bring about increased resiliency. The adoption of security by design or security in-depth practices would also be needed.
For digital communications in India, the future indeed holds tremendous prospects, provided, of course, the government addresses various policy challenges expeditiously and the industry also adapts itself to the data world and adequately supports innovation, competition and liberalisation.