Telecom sector: Charting new growth gradients

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New Delhi | Published: August 24, 2018 3:06:05 AM

Government must address the sector’s needs of lower taxes & levies to ease financial stress.

TELECOM SECTOR, TELECOM INDUSTRYTelcos’ inclusive approach led to increased teledensity, from 75% in June 2014 to 93% in March 2018, with 305 million new subscribers. (IE)

The Indian telecom sector has witnessed a paradigm shift—crossing the billion-user mark and rolling out new technologies along with other leading markets. Just four years ago, it faced multiple challenges—falling revenues and increasing debt were wreaking havoc. The new government initiated many steps, and with BharatNet, EoDB, GST, easier M&A rules and the draft National Digital Communications Policy 2018, the government remained forward-looking. Telcos are also investing heavily to meet the government’s ambitious targets—universal broadband coverage (50Mbps), 10Gbps at all gram panchayats, 10 million public Wi-Fi hotspots by 2022. Other challenges straining an already stressed sector, including poor rural connectivity and lack of adequate spectrum for service providers, have been addressed.

DoT concluded auctioning of 700, 800, 900, 1800, 2100, 2300 and 2500 MHz spectrum bands successfully. The October 2016 auction went smoothly. DoT harmonised airwaves in 1800 MHz band. Harmonisation makes airwaves contiguous or ‘continuous’—critical for 4G services. Non-contiguous airwaves severely impact quality of 4G services.

The government launched Tarang Sanchar portal to correct misconceptions around electromagnetic emissions from towers. It allows people to check emission (EMF) compliance status of mobile towers, giving information about any site, on request, via email. The portal has details of over 14.5 lakh base transceiver stations across India.

To minimise delays in rolling out the next generation 5G, the sector, in partnership with the government, has established a high-level 5G forum. It has secretaries of all relevant ministries, industry representatives and academia as part of it. The government has also provided budgetary support for the establishment of 5G test bed in Chennai.

Connecting all citizens, and thereby laying a strong foundation for Digital India, is at the top of the government’s priority. Telcos’ inclusive approach led to increased teledensity, from 75% in June 2014 to 93% in March 2018, with 305 million new subscribers. The mobile internet subscriber base doubled from 233 million in March 2014 to 425 million in December 2017, clocking 75% rise in overall internet coverage. Data usage has also grown in tandem. Broadband access has grown seven times, from 61 million subscribers in March 2014 to 412 million subscribers in March 2018.

To achieve its targets, robust telecom infrastructure is critical. For this, the industry ensured doubling of the aggregate telecom infrastructure over the last four years. Under BharatNet, 1 lakh gram panchayats were connected with high-speed optical fibre cable by December 2017. The plan is to connect all 2.5 lakh gram panchayats by March 2019.

A 17% increase in internet traffic in 2015-16 resulted in an absolute increase of $103.9 billion in India’s GDP during the year. Mobile payments more than doubled from 168 million in November 2016 to 380 million in December 2017, moving towards a cashless digital ecosystem.

While data tariffs continue to fall and voice is all but free, operators have still witnessed huge growth in consumption on the back of investments of around Rs 3 lakh crore over the last three years. Telcos have invested to expand broadband coverage despite debt of around Rs 5 lakh crore.

The draft National Digital Communications Policy 2018 has set ambitious targets. It aims to make broadband connectivity ubiquitous while facilitating digital sovereignty, adding 4 million new jobs and increasing the sector’s contribution to GDP to 8% from the current 6%.

The industry now has the India Mobile Congress—one of the biggest telecom events in South East Asia, similar to Barcelona’s Mobile World Congress. India Mobile Congress 2018, to be held during October 25-27 in New Delhi, has the theme of “New Digital Horizons: Connect, Create, Innovate.” and aims at building ideas, forging lasting industry relationships and showcasing India’s tech prowess to the world.

The industry has invested heavily in telecom coverage and readied the ground for future technologies like 5G, IoT and M2M. We are confident the government will continue its efforts to address the sector’s pressing needs of lower taxes and levies to ease financial stress. The right kind of policies and regulatory mechanisms are all that is required to fulfil the aspirations of the country of a billion dreams.

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