The telecom sector has witnessed a number of path-breaking developments during the past year. Key among these are the announcement of the much-awaited telecom reform package, the setting up of a centralised right-of-way (RoW) portal, and the conclusion of the 5G spectrum auctions. With the successful round of bidding for 5G spectrum, India is now set to begin rolling out 5G services, opening up a plethora of opportunities across the telecom domain. Sector experts share their views on the key developments that took place during the past year and the way ahead for the sector…
What has been the progress in the telecom sector over the past one year?
P. Balaji
The robust telecom and digital infrastructure helped the country tide over the pandemic, ensuring that work, education, businesses and livelihoods could carry on. Telcos such as Vodafone Idea (Vi) continued to make progress in augmenting their network capacity to meet the constant demand for higher speed networks. Vi kept people and businesses connected by building India’s fastest 4G network.
India is on the cusp of 5G roll-outs, facilitated by favourable government policies over the last one year. The bold steps taken by the government by way of the unprecedented telecom reforms of 2021 and the recent auctions have set the stage for our enterprises and citizens to experience 5G in the near future. Industry players such as Vi have taken several concrete steps, enabling the development of the 5G ecosystem and use cases for Indian enterprises and consumers. India is therefore ready for 5G at the right time, as the market and ecosystem are maturing.
Operators such as Vi have also been working on deploying technologies such as internet of things (IoT), augmented reality, virtual reality on the back of cloudification and virtualisation of networks.
The path-breaking and bold reforms in September 2021 provided a much required relief, covering structural, procedural and liquidity aspects. This is helping the industry stabilise and plan future investments in the business for further growth.
Another big reform has been around spectrum auctions, with more predictability regarding timelines and annual payment terms. All this has been a result of the government’s open dialogue with the industry, which is highly commendable. The government’s visionary programmes – Digital India, Make in India, Gati Shakti – are built on the strong foundation of the telecom sector and will be the cornerstones for Atmanirbhar Bharat.
The prompt allocation of 5G spectrum, right on the day of spectrum payment, was unprecedented. It is a clear signal of a reformist approach on the part of the government and the Department of Telecommunications (DoT), and was highly appreciated by the industry.
We have seen other positive steps from the government such as the Indian Telegraph Right of Way (Amendment) Rules, 2022, along with the launch of the 5G RoW application form on the Gati Shakti Sanchar portal. This will help the industry in facilitating faster proliferation of digital infrastructure, and deployment of small cells, aerial fibre and street furniture.
“The prompt allocation of 5G spectrum, right on the day of spectrum payment, was unprecedented.” P. Balaji
T.R. Dua
Given the current surge in data traffic, which is expected to go up even further with the launch of 5G services, industry stakeholders are increasingly realising the need to improve the capacity of the existing networks. While the current capacity per tower site is about 1 Gbps for 2G/3G/4G services, going forward, the capacity needed for each site will increase to 10-20 Gbps, once 5G kicks in. This also needs a fundamental change in the technology deployed at these tower sites.
With the world becoming increasingly dependent on the information and communication technology industry, new technologies and innovations in this domain are driving the world towards complete digital transformation. This digital transformation has aided the growth of the digital economy and information society, which has formed formidable lines of defence against any critical and challenging situations. Infrastructure plays an extremely symbiotic role in the success or failure of any industry. For telecom in specific, there is no exception. Therefore, the digital infrastructure industry has played a pivotal role in the unhindered growth of India’s telecom sector.
“The country is moving rapidly towards a robust digital infrastructure. The acceleration has just begun; we are merely at the cusp and still have a long way to go.” T.R. Dua
T.V. Ramachandran
The most significant development in the past year has been the Phase I telecom reforms announced in September 2021, whereby nine structural reforms and five procedural reforms were approved, along with relief measures for the sector. This package of bold and immediately beneficial telecom reforms effectively resulted in the industry’s quarterly AGR bouncing back for the first time since 2016. In fact, they were largely responsible for the success of the 5G spectrum auctions concluded recently. These measures would infuse liquidity, encourage investments and reduce the regulatory burden on the sector.
Phase II of the reforms is already in the works. The ministry is working on licensing reforms focused on ease of doing business, legislative reforms, satcom services, spectrum reforms and measures to reduce litigation in the next tranche. Migration to this regime of Telecom 2.0 could be on similar lines as was done in 1999 for Migration to NTP99, which was effected as an optional settlement on a quid pro quo basis.
The recent amendments to the Indian Telegraph Right of Way Rules, 2016 are expected to facilitate quicker and easier roll-out of telecom infrastructure. DoT has also rationalised the administrative fees to reduce the cost of compliance. In a welcome move, telecom licensees can now enter into agreements with private property owners for the installation of telecom infrastructure, without the need for government approval. A 5G RoW application form on the Gati Shakti Sanchar portal has also been launched recently to aid faster 5G roll-out. The IT systems of all states/UTs and major infrastructure central ministries such as railways/ highways have been integrated with this portal to make India ready for 5G launch.
Our progress in the adoption of next-generation 5G technology has been another major development. The mega spectrum auction, which included 5G bands, resulted in a total of 51.27 GHz (71.06 per cent of the total spectrum put to auction) being sold for over Rs 1.5 trillion – the highest collection through spectrum auctions since 2010.
Even more significant was the union cabinet’s approval to enable private 5G networks through direct assignment of spectrum to enterprises in an administrative manner. A truly forward-looking step, this will accelerate the Digital Transformation of Enterprises to Industry 4.0, and boost both “Atmanirbharta” and “Make in India”, leading to better efficiencies, productivity and output for enterprises, as well as accelerate digitalisation, boost capabilities and propel indigenous manufacturing and industrial automation, thereby catalysing economic growth of the country to the next level.
On the manufacturing front, MeitY announced a production-linked incentive (PLI) scheme for consumer devices, IT hardware and accessories as well as IoT devices; while DoT announced a PLI scheme for network equipment manufacturing and an incentive scheme for design-led manufacturing.
DoT’s forward-looking guidelines on machine-to-machine (M2M) services will lead to a plethora of citizen-centric services across different verticals, while also propelling innovations and enabling applications and solutions that will deliver benefits to Indian citizens.
“The most significant development in the past year has been the Phase I telecom reforms announced in September 2021, whereby nine structural reforms and five procedural reforms were approved, along with relief measures for the sector.” T.V. Ramachandran
Dr Mahesh Uppal
There has been a significant increase in broadband access across the country. The government has taken several measures to address the cash flow challenges faced by private telecom players. This was crucial, especially for Vi, which faced a major crisis. There has been a welcome reform in the computation of AGR, which will now exclude non-telecom revenues of the licensed players. Players have seen a steady rise in their revenues. The government’s decision to remove SUC on the auctioned spectrum meets the long-pending industry demand. The auction of 5G spectrum has at last been completed and spectrum has been allocated seamlessly, in record time.
“The government’s decision to remove SUC charges on the auctioned spectrum meets the long-pending
industry demand.” Dr Mahesh Uppal
How soon do you expect telcos to roll out 5G services in India? What trends do you see in the ARPU levels of telcos?
Dr Mahesh Uppal
5G services could start in two months for a few targeted commercially attractive regions and enterprises. However, access to the general public could take much longer, probably over two years.
What are the key challenges that remain unaddressed?
P.Balaji
As we set to roll out 5G in the country, continued implementation of the September 2021 reforms and policy enablement for the future will be important. Further, Reforms 2.0 should offer relief such as rationalisation of levies and duties, settlement of old litigation, and maintainance of the optimum market structure of three private plus one PSU player, in line with global trends in similar-sized markets.
The adoption of 5G and the influx of new technologies such as artificial intelligence (AI), machine learning (ML), cloud, robotics and blockchain will require a fresh outlook with respect to policymaking. We not only need to draw best practices from other advanced markets, but also use this as an opportunity to stay ahead of the curve in formulating the policy and regulatory regime of the future. As per estimates, there are over 700,000 4G base transceiver stations in the country that will need to be augmented to 5G. Add to that the need for additional sites due to densification of the network over the next couple of decades. The launch of the Gati Shakti Sanchar portal is a great step, but it will be critical for its success that all states/UTs/central agencies integrate their own portals with this one to facilitate speedy clearances at affordable rates.
T.R. Dua
Traditional microwave can only provide speeds of 500 Mbps-1 Gbps. E-band microwave can provide 1-2.5 Gbps of speed depending on the allocation of the number of spots. To achieve capacities of 10-20 Gbps, there is a need to deploy small cells across all tower sites. With small cells paving the way, fiberisation will be the key. But despite India being the second-largest telecommunications market globally, a comparison of optical fibre cable (OFC) roll-out among the top performing telecom markets shows that the fibre kilometre (fkm) per capita in India is much less than that in several other key markets. India has approximately 3.3 million km of OFC and 35.11 per cent of towers are currently fiberised. About 70 per cent of the towers need to be fiberised by 2024 to cater to 5G services and the investment required in India for incremental tower fiberisation will be Rs 520 billion-Rs 595 billion.
However, getting permissions for the most optimum OFC route is a herculean task in itself, even if there are clear guidelines available in a state. There are charges and levies to be paid, which are through the roof in many cities, not just the metros. Furthermore, despite telecom being a central subject, there are state rules for digital infrastructure service providers to be followed. There is an RoW regulation in every state, which lists out the procedure for putting up digital infrastructure.
Amidst all this chaos, the National Master Plan, popularly known as Gati Shakti, comes as a much-needed and timely intervention. The prime objective of this mega initiative is integrated planning and coordinated implementation of infrastructure connectivity projects. Gati Shakti is helping bring the needed synergy to create world-class, seamless multimodal digital infrastructure in India.
Hence, challenges can only have a debilitating effect on the industry when the authorities do not pay timely heed to those challenges. In that regard, we must express our gratitude to the honourable authority for not only giving due consideration to these issues but also taking steps for alleviating these issues.
The RoW guidelines are being carefully examined by the government with regard to these concerns and the role of the distribution companies and electricity boards is also being augmented for the sole purpose of making India a 5G-ready nation. In May 2022, DoT launched a single-window clearance system for obtaining RoW clearances online, which has been more than welcomed by the industry as it addresses a major part of the incumbent issues.
T.V. Ramachandran
- QoS for broadband: Data speeds for mobile connectivity in India are well below the international norms. On the global index, India ranked 117th among 140 nations in terms of mobile broadband speeds and 70th among 182 countries in fixed line broadband (SpeedTest Global Index, July 2022). Our average download speed is way below the global average of 30.78 Mbps. Given that 97-98 per cent of Indian broadband users are on mobile, it is critical to note that there are no minimum speeds defined to ensure quality delivery of broadband services to this huge majority of people. Broadband should be facilitated as a fundamental right for all citizens of India in the coming years. Unless this is mandated, we will not see equality and inclusion in our digital progress, and the rural as well as disadvantaged sections of society would lag behind.
- Leveraging PM WANI for public Wi-Fi: PM-WANI is a great initiative of the government. However, to achieve critical mass, the government needs to provide some handholding to PDOs by way of financial support in the initial two to three years through the Universal Service Obligation Fund. This would help in bringing a large number of entrepreneurs to join the PM-WANI ecosystem, help them scale up, and also enhance the uptake of hotspots and usage.
- Delicensing of the 6 GHz band: Currently, India has only a very small fraction of the total quantum of unlicensed spectrum as compared to countries such as the US, the UK, Korea and Germany (India has about 650 MHz compared to about 15000 MHz in these countries). To promote state-of-the-art technologies such as Wi-Fi 6/6E, which can complement 4G, 4G-Advanced and 5G, we need delicensing of the entire 6 GHz spectrum band – the full 1200 MHz (5925-7125 MHz).
- Delicensing of lower V-band (57–66 GHz): For optimum use of the unique potential of the entire V-band, the lower part of the V-band (57-66 GHz), which is less suitable for backhaul, should be delicensed for a number of consumer welfare applications and services – secondary broadband access via Wi-Fi, short-range devices and other innovative applications. This is in line with well-established international best practices followed in over 80 countries. The upper part of the band (66-71 GHz), which does not suffer from oxygen attenuation, is well suited for backhaul purposes, and may be provided to TSPs/ISPs for the same.
- Private 5G networks: DoT has mandated demand studies to be conducted for direct assignment of spectrum to enterprises for setting up captive non-public networks. We are unaware of such studies being practicable or having been done in any other regime. Moreover, non-public networks (NPNs) are already globally prevalent, with applications in over 794 private networks operating in 68 countries. The requirement for demand studies would unfortunately delay the implementation of captive private 5G usage in the country and we will lag behind the advanced countries. We urge the government to urgently review this aspect.
- Satcom: Satellite broadband is well poised to become a mainstream digital connectivity solution for connecting the massive and diverse Indian terrain and Population. The introduction of the national spacecom policy is expected to provide a framework for organisations operating in the spacecom domain to introduce robust and effective satellite broadband services via a prudent and proportionate mix of LEO and MEO satellites, along with the existing geostationary satellites in play.
Dr Mahesh Uppal
India needs a liberal regulatory framework so that players, technologies and business models face no entry barriers like levies and unreasonable compliance. Our licensing regime is unorthodox and complex. Circle-based licensing and revenue sharing do not reflect global best practices. It is still not possible for a service provider, such as a technology player, to operate its choice of services without a telecom licence for a whole circle (for a telecom operator) and district/city (for an ISP). The weak framework for the resale of telco services is a major barrier for players like virtual network operators and Wi-Fi players who are struggling to acquire a market share. Rural and remote users still face challenges with coverage and bandwidth. The lack of a conducive framework for satellite services is hurting them the most.
What is the sector outlook for the next one to two years?
P.Balaji
India still has a large 2G population. They will move to 4G services at a rapid pace. Thus, 4G will remain important for consumer services over the next couple of years. 5G networks will get rolled out as the device ecosystem picks up. The initial adoption of 5G services will be more in the enterprise space for Industry 4.0 applications.
The roll-out of 5G services will revolutionise the digital realm. With its high speed and ultra-low latency, 5G will not only drastically accelerate Industry 4.0, streaming, social media and the e-commerce experience, but will also take many social and economic functions into the digital realm. 5G will also require high capex for fiberisation of towers, network densification and setting up of specialised base stations. The National Digital Communications Policy estimates investment requirements to the tune of $100 billion.
5G is going to give a major push to IoT adoption in India. New technologies such as AI, ML, cloud, robotics and blockchain are expected to boost economic growth and solve population scale problems. Billions of IoT-connected devices and several Industry 4.0 applications will be the new order.
Telecom has been the foundation of India’s digital economy growth and will play a crucial role in helping India meet its $5 trillion economy target with a trillion-dollar contribution from the digital economy, over the next few years.
T.R. Dua
We are on the verge of experiencing 5G and its associated technologies in our daily life. The next decade belongs to advancements in these technological fields and very soon we will all witness a paradigm shift in our day-to-day functioning and handling of challenges. With India fast-tracked to meet the urgent need for digital infrastructure deployment, the novice concept of infrastructure sharing will not just provide a reduction in costs but also enhance coverage and reduce the go-to-market time for services. DoT is also promoting infrastructure sharing owing to its many benefits. Furthermore, the Telecom Regulatory Authority of India has recommended the enhancement of the scope of telecom infrastructure providers, as IP-1s are well equipped to fulfil the current needs of the Indian market.
In the process of development, our transitioning economy has been through various phases and now it is stepping into the ultimate future. The country is moving rapidly towards a robust digital infrastructure. The acceleration has just begun; we are merely at the cusp and still have a long way to go. In due time, when 5G expansion and roll-outs are in full swing, infrastructure providers will be in a pole position for not just accommodating the influx of users, but also for enablement and incorporation of ancillary elements such as data centres, content delivery networks, hybrid infrastructure capable of supporting electronic vehicle charging stations on premises and small cell roll-outs for 5G. With the continuous support of our government, a truly digital India is no more a far cry.
T.V. Ramachandran
India will probably witness the roll-out of public 5G networks starting end 2022 or early-2023. However, with 5G NPNs, we have an excellent opportunity to showcase the early adoption of 5G across several sectors – be it healthcare, education, manufacturing, and others. Early availability and processing of direct spectrum allocation to enterprises for building captive 5G networks would be a decisive factor in determining India’s progress in the endeavour to become a global manufacturing, R&D and supply chain hub.
New and emerging technologies such as virtualisation, software-defined networking/network functions virtualisation, IoT, AI and blockchain are likely to play a significant role in automating networks and with the introduction of 5G, will result in much faster broadband speeds, various new applications and a huge number of M2M communications.
Amendments to the Indian Telegraph Right of Way Rules, 2016 are expected to facilitate quicker and easier roll-out of telecom infrastructure, and expedite 5G deployments across the nation, since 5G will necessitate fibre connectivity with thousands of small cells and base stations per city.
Dr Mahesh Uppal
The outlook is good. With growing digitalisation across all parts of the economy and governance, the demand for telecom technologies, bandwidth and other services is expanding exponentially. The success of fintech is especially impressive and will inevitably expand the market further. The residual unmet demand for data connectivity in rural and remote areas should attract players with new technologies and business models if appropriate changes are made in the licensing regime.
