Is India 4G ready

Is India 4G ready

The answer to the question posed in the headline is yes but there are hurdles that need to be overcome before we get there, according to a leading telecom expert. As the second-largest telecommunication market in the world, India has more than a billion mobile subscribers. The country is now aiming to provide data connectivity to 1 billion subscribers. No mean feat for a country that made the first mobile call only about 20 years ago! However, while the growth of mobile services in the country has been nothing short of phenomenal, growth of mobile broadband has been happening at a far slower rate. As of April 2016, India had 151 million broadband customers. Of this, the 4G user base is estimated to be at about 6 million. Interestingly, unlike developed nations, broadband services in India are primarily delivered by mobile broadband services which constitute over 88.7 per cent (134 million) of the total broadband subscriptions. We expect to provide at least 350 million 4G connections by 2020.

At present, the country has 38 4G networks running across the country and 50 more networks are expected to be launched in the next six months. The total number of 4G BTS are 233,695.

As the economy accelerates towards achieving its millennium goals and thrust to make minimum infrastructure available to all, access to broadband services over state-of-the-art and efficient networks will gain traction that will help to serve a large volume of subscriber traffic. Despite roadblocks - and there are quite a few - the Indian telecom industry is on track to reap the benefits of 4G technology and improve user experience for all consumers. There is great potential in the Indian market waiting to be tapped. This is made evident from the fact that the total addressable market for the Mobile Broadband in India is projected to increase to 879m in 2020 from 720m in 2015.

As shown below, India ranks low in various indices of broadband and network readiness as compared to other countries. In order to achieve the target rankings, a more enabling policy and regulatory framework that actually facilitates the investment in networks, innovation in tariffs and services, development of content and availability of affordable handsets is required. Over a third of the world's population is expected to be covered by 4G-LTE networks, and this number is likely to accelerate as is the number of operators that provide 4G services. The mobile services sector in India has taken huge strides towards a 4G ecosystem, with handset manufacturers making mobile phones that are specially designed for 4G optimisation. In fact, some operators have also made the foray into manufacturing handsets to maximise the potential. The telecom industry and COAI does believe that the onset and adoption of 4G technology will be rapid and consumers - both retail and enterprise - which means that this particular space will set the trajectory for the future of mobile telephony in the coming months and years. However, hurdles remain that have affected the growth of broadband services in India. Operators face challenges in the form of high levies, policy complications and operational barriers. Add to these, there are also demand-side issues such as affordability and service attractiveness that operators need to be mindful of. It does not help that spectrum, the most valuable commodity for a mobile ecosystem to grow, is auctioned at a premium. The impending spectrum auctions will transform India from a spectrum-starved nation to a spectrum-rich one, although concerns remain over the high reserve prices that could discourage many players from participating in the bidding process. That would be an unfortunate turn of events, as we stand at the cusp of making major breakthroughs in telecommunications technology, and an inevitable move towards widespread 4G penetration. There is a need to understand the limitations under which the telecom industry operates before putting a price on premium bands like the 700MHz that offers the most conducive environment for 4G services. We are not aliens to the dangers of setting a high reserve price on spectrum. The 2000 auctions in the UK showed how operators could end up stretching their purse strings to such an extent that it eventually effects rollout plans. Indian telcos are debt-ridden (INR 3.8 lakh crores or approximately $45.9bn) and are likely to avoid getting into more debts if the reserve price is not kept competitive. There is a long way to go. Broadband penetration in India is still much lower: around 11 per cent as compared to a mobile penetration of 81 per cent at the end of February 2016. But there is enough reason to cheer. The National Telecom Policy-2012 has set a target of reaching 600 million broadband subscribers by 2020. To realise the goal of making broadband available to all parts of the country, the Government of India has launched several programmes such as Digital India, Skill India, Smart cities, the National Optical Fibre Network rechristened as BharatNet and others. All this will need a robust and fast mobile broadband that can only be possible through 4G/LTE technology. In order to facilitate country-wide 4G services, there is a need to harmonise site approvals / rights of way (RoW) procedures so as to lower the costs and expedite the process. Presently, exorbitant levies are imposed by various municipalities on RoW which increases the cost of service provision. Also, multiple agencies are required to be approached for obtaining RoW clearance, which leads to delays in network rollout. Hence, a coordinated effort must be initiated on the part of central and state governments for RoW. RoW permissions should be provided on priority and a time limit needs to be fixed. Use of wireless for providing last mile broadband access is critical. In addition to backhaul, such access requires a large number of towers and small cells. Non-discriminatory access to government land and street infrastructure (street lights, etc.) for putting up such towers and small cells is needed. In order to improve the efficiency of resources and reach the masses, such infrastructure should be allowed to be deployed, especially if it is shared among two or more broadband service providers.

More and more content should be brought to India, which will bring down the cost of content and will also improve the utilisation efficiency. This is possible by developing applications and content that is relevant, usable and understandable by the local people. Government should devise schemes to enhance domestic content thereby reducing dependency on International Internet bandwidth requirement. Even though the cost of handsets has fallen significantly, the rural households may still perceive mobile handsets or access devices to be expensive. It has been a long standing view of the industry that the bundling of handsets should be encouraged and the receipts from sale of handsets, accessories, etc. should not be included in AGR. Also, tax relief in terms of custom duty, import duty should be considered in order to reduce the cost of CPE imported in the country. Mobile broadband speeds will increase substantially in the coming 5 years. 3G speed will grow two-fold (15 per cent CAGR), reaching 3,889 kbps by 2020, while 4G speed is projected to reach 15,163 kbps (10 per cent CAGR). Further, Wi-Fi connection speeds are also expected to grow at the same click (14 per cent CAGR) from 2015 to 2020. This will entail major investments from the operators towards upgrading the network infrastructure in order to provide the requisite quality of services. Entry of a new player in 4G LTE space will have a positive impact on the entire 4G ecosystem in India. Pan India presence of this new entrant will increase competition and act as a fillip to the 4G penetration in India. Data offerings to consumers will also increase. As consumers will be inclined towards operators that will offer 4G, no player wants to miss this 4G bus. Clearly, each operator in India has to evaluate the opportunity cost of 4G and place its bets. All this will require sound investments and even more sound decisions both from the Government and the industry. As the apex association of telecom service providers in India, we are committed to this phase of growth. While the Industry is more than willing to contribute and play its role in achieving the above, it would certainly require the government's enabling support for crafting a viable and sustainable industry structure. For this, a predictable and stable regulatory and policy environment that ensures an investor-friendly climate, protection of existing investments, service continuity, availability of adequate, appropriate and contiguous spectrum, etc. would be a pre-requisite.

Rajan S. Mathews is director-general of the Cellular Operators Association of India (COAI), an industry association of GSM mobile service providers in India. He has also served in many senior executive positions at major telecom firms around the world.

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