Chinnu Senthilkumar, Kartik Raja & V Sridhar
Ever since India’s first mobile phone call was made from Kolkata’s Writers’ Building in July 1995, mobile service has become ubiquitous and the sector has contributed significantly to India’s growth story. According to the latest Department of Industrial Policy & Promotion (DIPP) report, telecom sector accounts for 6.5% of India’s GDP and employs about 40 lakh people (both direct and indirect). The telecom sector, once applauded as the “poster boy” of the country’s “socio-economic reforms,” is undergoing a short-term crisis—severely impacting all stakeholders in its ecosystem.
Despite the current issues being faced by our telecom industry, its digital transformation initiatives and our growing digital economy will continue to play a significant role in the country’s growth. While short-term issues such as mismatched regulations and debt restructuring demand immediate attention, longer-term opportunities will not only reduce job-losses, but also reverse the same, thereby bringing back the halo to this transformational sector.
Globally, the future telecom industry opportunities are centred around three major areas:
l Manufacturing of telecommunications equipment and devices;
l Network operations management of telecom, internet and associated networks; and l Management of telecom/internet data for associated personalised services.
Manufacturing: A lost cause
According to IDC 2017 reports, foreign-based device manufacturers hold 80% market share in India’s smartphone market, squeezing out Indian players. Apart from a few stars such as Tejas Networks, the potential for India’s network equipment manufacturing is very much limited by a well-entrenched global ecosystem, which controls the higher value-added components in design and chipset research. India’s past missteps and relatively late entry into the manufacturing ecosystem severely limits our chances of dominating this space. It is high time to discard our “follow the leader” approach blindly and, instead, leverage our significant strengths to dominate the new world of software-driven telecom.
Software-driven telecom: Translating our core competency
On-going mega disruptions in the telecommunications industry due to software defined networks, cloud computing and data management models are driving the switch from hardware to virtualisation of software. In simple terms, data centre-led “software-driven telecom” approach is the new norm for managing telecom networks, data and analytics layers. Combined with consumer/enterprise-centric layers built on the data security, payment gateways, apps and artificial intelligence-driven workflows, virtualisation will form the key pillar for any business solution architecture or service delivery platforms in different verticals—education, governance, healthcare, finance and e-commerce. India has both the experience and supply of skilled labour in the areas of information technology and software, and managed infrastructure services (MIS), along with the know-how in managing digital workflows. This management expertise in different business verticals accumulated over years of servicing global clients offers a greater business value in the emerging scenario in the telecommunications ecosystem.
Green shoots in the start-up space and the bigger IT players focusing on the emerging Internet of Things (IoT) networks and its associated platforms provide us with unique competencies to play a major role in telecom network management and delivery platforms in the global arena.
Taking inspiration from the late Vanu Bose—the pioneer of software-defined radios—our telecom and IT industries should come together to address the needs of emerging “software-driven telecom” and build relevant competencies. As an example, comprehensive test-beds to monitor Quality of Service and experience of global telecom networks and services can showcase India as a global hub and a centre of excellence in this area.
Data management: Potential for first-mover advantage
A major global concern in digital transformation initiatives is the emerging threats to data security and privacy. India’s open democratic systems combined with mature audit practices in other domains offer us a unique opportunity to establish a first-mover advantage in the data management and analytics space. Established firms in the neutral audit arena and the vibrant new-age start-ups in the audit, platform and security areas promise that the opportunity can be effectively captured by Indian firms.
While firms and industry associations in the areas of IT and telecom should largely drive the above initiatives, the government policy planners have a critical role to play. Our recent Supreme Court’s ruling on “right to privacy” and India’s fundamental democratic framework (compared to China) are viewed favourably to set up legal free zones to meet global clients’ cyber security, data privacy, confidentiality and legality requirements. Our policy planners should take initiatives to implement such neutral “legal zones” and to complete the ecosystem with a set of independent and neutral auditors to build the confidence of global telecom industry clients. This is also in tune with the requirements for such initiatives due to enforcement of the European Union’s “General Data Protection Regulation (GDPR)” from May 25, 2018.
To paraphrase Silicon Valley’s legendary investor Robert Smith, “enabling enterprises to transition from a slice-focused industry vertical to participate as a leader into their enlarged industry ecosystems” is the key to become an emperor, instead of focused on becoming a king.
Today’s business solution platforms are shifting from “digitisation” silos to “digitised” workflows across industries. If India’s IT and telecom industries come together in a meaningful manner to enable solutions for the transformed telecommunications ecosystem, it can not only stem current job losses, but also reverse it to create huge employment opportunities. Most importantly, it can position India as the leading provider of global telecom solutions.
Senthilkumar is Partner & CTO, Exfinity Venture Partners; Raja is CEO, QoSBEE,
an Indo-French start-up; Sridhar is Professor, IIIT-Bangalore