Home >Opinion >The telecom industry is set for a tech revolution

The second largest telecom market crossed the 1 billion subscriber mark in 2015. The year saw dynamic policy changes when the industry faced major challenges of call drop and quality of service. The spectrum auction saw intense competition and fetched the government 1.09 trillion for 418 megahertz (MHz) of spectrum in 800 MHz, 900 MHz, 1800 MHz and 2100 MHz bands. Spectrum sharing and trading rules were a welcome relief for the sector that faced scarcity and fragmented spectrum issues. The sector saw growing 3G footprint and data usage in 2015.

The interplay of government initiatives such as Digital India, Smart City Project, payments banks, Make in India and the roll-out of 4G LTE services will create a platform for exponential growth of M2M (machine-to-machine), cloud, Internet of Things (IoT), analytics and big data, which will lead to massive growth of voice, data and video. The sky is the limit in this regard.

A broad review of some of the following aspects of technology will make it clear that the Indian telecom industry is waiting to create revolutionary growth not only for itself but also for the economy.

4G/LTE services: The launch of 4G services is expected by more operators as they are trying to build the ecosystem in terms of devices, applications, services, etc., that are relevant for Indians. These could further boost the data market in the country. Mobile data consumption is expected to reach 1,869 petabytes per month by 2020. Online services such as e-health, e-education, e-governance and banking are expected to ride on the success of data growth.

Broadband: The number of broadband Internet users has already crossed the 100 million mark and is expected to reach 250 million by 2017. The National Optical Fibre Network (NOFN) project, which is expected to be completed by December 2016, is likely to bring more Internet users in the ecosystem and help to bridge the digital divide in the society.

Smartphones and applications market: Smartphone shipments increased by 44% to reach 26.5 million in the fiscal second quarter and is expected to overtake the US market by 2017. The liberal policies and demand for smartphones are bringing global manufacturers to build and sell in India. 2016 will see more budget smartphones with 4G capability manufactured locally. Similarly, app usage grew by 131% supported by a strong IT presence. India is slowly becoming the app development hub of the world.

Big data and analytics: Telcos have started to use big data analytics for better customer understanding, churn management, network optimization and increasing the efficiency of other processes. They are expected to leverage on the huge volume of data generated every day and roll out innovative services based on the insights.

M2M and IoT: The M2M market is estimated to generate $7.1 billion in 2015. As per GSMA (GSM Association), the business impact of connected life is expected to be $4.5 trillion by 2020 for the global economy. The widening scope of M2M in India has been seen in sectors like healthcare, education, auto, agriculture, security, surveillance, etc. The Smart Cities project is further expected to boost the IoT as well as the Internet and communication technologies market in India. Telecom is a backbone for all these.

Wi-Fi offloading: Many service providers are working on Wi-Fi hotspots and applications that can help in decongesting the networks and improve the quality of service. It is crucial for India to look for alternative technologies in view of limited spectrum and huge population. Wi-Fi offloading helps telcos in improving user experience, build brand loyalty and reduce churn. This will lead to further data growth. Seamless authentication and security are challenges for higher deployment of Wi-Fi. Countries such as Thailand and the US have been able to transfer 72% and 68% traffic, respectively, to Wi-Fi.

Digital banking: Electronic transactions were to the tune of 92 trillion in 2014-15. A digital banking system has better capability to reach remotely located and rural customers due to technology and telecom presence.

According to analysts, the payments market in India stood at 15.5 trillion in 2015 and is likely to grow at about 12%. Digital banking customers may reach 300 million with the expansion of Internet services and payments banks.

However, the above is predicated on:

1. Adopting best-in-class regulations, which enable the growth of telecom industry through healthy competition and level playing field for all.

2. Out-of-the-box thinking and imaginative policies, which will help to complete the roll-out of NOFN so that all panchayats, talukas and villages are connected.

3. Make available contiguous spectrum in appropriate quantity at price points that will support adoption of newer technologies in an aggressive manner. In this regard, a relook at the spectrum auctioning method is required by learning from global experiences to see what is in the best interest of the industry and the country.

4. Clear policy regime with a committed time horizon.

Hemant Joshi is a partner at Deloitte Haskins & Sells.

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