Subscribe / Unsubscribe Enewsletters | Login | Register

Pencil Banner

Will India see a second telecom revolution?

Zafar Anjum | June 16, 2014
In this exclusive interview, Raju Wadalkar, Global Head, CTO, Tech Mahindra, talks about the prospects of the Indian telecom sector after a new government under the leadership of Narendra Modi was recently inaugurated in New Delhi.

The new, industry friendly government may be further persuaded to resolve the outstanding tax and spectrum auction issues given the strong growth of Mobile and Broadband services and their value in rural areas.

The main challenge for the industry results from intense competition. With more than 6-8 operators in each service area and tariffs that are among the world's lowest, revenue is significantly weaker while infrastructure and regulatory costs (including service tax, license fee, graded spectrum usage charges and revised spectrum reserve price) are high. To spur investment to meet market demands, the Government should consider providing some tax relief to operators.

How far has this set back India relative to other countries in terms of telecom innovation and proliferation?

India's mobile and broadband subscriptions continue to grow significantly. The Cellular Operators Association of India (COAI) has reported that the cellular industry's gross revenues increased from 1,580 billion rupees in 2010 to 2,048 billion rupees (projected) in FY2013. Subscriber numbers increased from 585 million in 2010 to 998 million in 2013 and are expected to reach 1 billion by 2014. The rural customer segment has registered significant growth.

The downside from low revenue is compensated by the scale of the subscriber base, which has led the industry to invest aggressively with aggregate assets now at 663 billion rupees.

Indian operators are now planning to launch 4G LTE services. One operator has already done so in select cities, while another plans to deploy 4G using the nationwide optical fiber network.  Voice services will play a key role in attracting consumer demand and many operators are considering VoLTE (voice over LTE). The fact that operators are optimistic and aggressive in rolling out advanced services bodes well for the industry.

However, 4G/LTE requires significant investment in the backhaul network and the cost could become a hurdle. Operators are also not sure of the additional revenue they will earn from data services as their 3G experiences have not been encouraging.

The Indian Government has started to take steps to create a technology friendly atmosphere in India. The Cabinet has approved the setting up of two Semiconductor Wafer Fabrication (FAB) Manufacturing Facilities. These FABs will provide critical support in promoting Electronics System Design and Manufacturing.

How do you think the tricky question of "Right of Way" can be addressed by the new government?

Past efforts at implementing "Right of Way" (RoW) guidelines have met with limited success, hindering the optical fiber network in the country. However, the Telecom Regulatory Authority of India (TRAI) has acknowledged the urgent need to engage with State Governments to resolve RoW issues or to modify the legal framework such that a uniform policy is formulated and implemented country wide.

 

Previous Page  1  2  3  4  Next Page 

Sign up for CIO Asia eNewsletters.