While the telecom regulator and telcos battle it out over call drops and who is to be blamed for this, the problem is all set to get a lot worse.
While the telecom regulator and the telcos battle it out over call drops and who is to be blamed for this – and the likely impact of the proposed penalties on the industry – the problem is all set to get a lot worse. And not just for call drops, but for Internet services that Indian customers have already begun to consume voraciously on their mobile phones – as the Hindustan Unilever ad said in the context of stains once clothes had been given the Surf treatment, dhoondte reh jaoge. The latest set of quarterly results from Bharti Airtel and Idea Cellular make clear just how fast subscribers are gobbling up data services, and this is before the 4G rollout has really begun, before Reliance Jio has even made its entry. During the second quarter of FY16, data accounted for 21.5% of Bharti Airtel’s revenues as compared to 14.5% a year ago; for Idea Cellular, the number rose to 19.6% from 14% a year ago. While Bharti Airtel has seen a 60% rise in data revenues over a year ago, voice revenues are down 1.8%. With both voice and data customers offering the same Rs 193 realisation per month for Bharti Airtel, this could well be the inflexion point for data services in the country. The second half of this fiscal will see data revenues rise further as operators complete their 3G coverage and start offering 4G services.
While the rising share of data revenue is something that operators would welcome, they need to be prepared for the coming data tsunami – data consumes much more spectrum than voice, especially when large video files are downloaded as a matter of routine. According to an Ericsson study, in 2008 the total petabytes of traffic generated by voice traffic was roughly 70% of the total, with data traffic making up the rest. By the first quarter of 2012, roughly 80% of all traffic was generated by data users and by 2013, just about a tenth of all traffic was generated by voice callers.
This has big consequences in terms of spectrum shortages. In Delhi, a top telecom operator carries 49 hours of voice traffic every day per MHz per telecom tower as compared to 6.5 in Shanghai and 8.9 in Singapore; for data traffic, the comparable numbers are 3.4 GB, 0.2 GB and 2 GB respectively. An even bigger problem arises after this data is aggregated at the level of the telecom tower since this traffic has to be carried to the central switch. Right now, most telcos transmit this data – backhaul, in telecom jargon – using microwave towers while they should actually be using optic fibre cable as in done globally. But with each municipality arm-twisting telcos and charging them exorbitantly to dig the ground to lay fibre – and taking a long time to give permissions for small stretches – this is as big a challenge as poor availability of spectrum. Which is why, it is high time the government gave telecom the status of a public utility where right of way is assured. Levying penalties on telcos for call drops may help soothe public nerves – though, as the telcos rightly point out, no such penalty is levied on water/electricity suppliers or the railways/airline firms – but unless the government and telcos work together, Digital India is dead in the water if access to it is choked.