Home India 2015 Indian Televolution: The Next Frontier

Indian Televolution: The Next Frontier

by Administrator
Cai LiqunIssue:India 2015
Article no.:7
Topic:Indian Televolution: The Next Frontier
Author:Cai Liqun
Organisation:Huawei India
PDF size:195KB

About author

Mr. Cai Liqun is the CEO of Huawei Telecommunications India, the Indian region marketing, sales and services arm of Huawei, a global leading ICT solutions provider.
As the CEO of Huawei Telecommunications India, Cai Liqun is responsible for leading all aspects of business in India region, including the management and implementation of strategy, management and operations.
Cai is a member of Huawei’s Investment Review Board which is the senior executive committee that decides on investing in products.

Since joining Huawei in 1995, Cai has worked on various Huawei products that include WiFi, CDMA, WiMAX and Core Network. Mr. Cai served in multiple roles in these product lines. Prior to his current role, Mr. Cai was the President of Core Network Product Line.

Cai has a bachelor degree of EE from University of Science and Technology of China.

Article abstract

It is high time a new round of telecom revolution swept the country, spreading economic growth and benefiting the masses.

Full Article

If ever there is an industry that has had the most pronounced impact on the growth of businesses worldwide and that has added tremendous economic value to the people at large, it is the telecom industry. In particular, the mobile revolution that has swept across the globe has boosted growth and brought services such as healthcare, education and banking closer to the masses living in urban as well as rural areas.

This has been most visible in a country like India, which is vast and diverse not only in its geography but in its language, culture and belief. Before the telecom sector was opened up for investment as part of the liberalisation of economy in the 1990s, procuring a telephone connection (only wireline at that time) was a lengthy and arduous process. As per data from government-owned telco BSNL, there were fewer than 15 million phone connections in the mid 1990s. Even after opening up the sector for mobile telephony in 1995, growth was slow in the initial years mainly due to very high tariffs and handset costs. However, as the call charges and device costs began to come down during the next decade, the use of mobile phones grew phenomenally—often surpassing industry and analyst projections.

Today, there are 957 million telephone connections out of which a staggering 930 million are mobile and the rest are fixed lines (data as on Sept 30, 2014 according to TRAI, the Telecom Regulatory Authority of India). The provision of mobile services at such a humongous level involves large-scale development of physical infrastructure (towers, backbone, etc), network infrastructure (carrier equipment, cell sites, etc) and service infrastructure (training people, content development and value-added services, among others). All these activities imply millions of people in India now depend on the telecom segment for their livelihood. But that’s not all: the main beneficiary of the growth of telecom is the masses, who realise significant gains in productivity through better communication and availability of information at their fingertips. This has been made possible mainly through the mobile Internet using which hundreds of millions of Indians can access the information relevant to their sphere of economic activity and take informed decisions based on data.

To cite just a couple of examples: a lot of rural agriculture-based applications have been launched in India recently which are creating a positive impact. According to data compiled by Booz&Co. and the Confederation of Indian Industry, the agriculture market in India witnessed 6-7% reduction in price dispersion and 8% increase in price realisation for farmers who have started selling directly to traders (after taking advantage of the Internet). Such applications are now said to be used by as much as 90% of the farmer base that has access to these services. The availability of basic information like productivity tips, crop prices, weather forecasts, etc., can further streamline existing practices and enhance agricultural efficiency manifold.

Similarly, the Government of India is working on linking its Aadhaar ID system (under which close to 700 million unique numbers have been generated for people residing in India) to bank accounts and mobile numbers. The idea is to expand financial inclusion and directly transfer the benefits (fuel subsidies, etc) to those eligible to receive them. Mobile numbers, which most Indians now possess, are being seen as a key component of authenticating the genuine users as well as intimating the beneficiaries about various government schemes. In addition to being speedier and more accessible, such an Aadhaar-bank-mobile system is expected to minimise the leakages and pilferages that massive government schemes are often prone to.

The challenges
A wonderful growth story and a big success, the telecom sector in India, nevertheless, has its own ups and downs. After some blistering growth from 2007 to 2012, the years 2013 and 2014 have been somewhat tough or uncertain for the industry as a whole. While intense competition kept tariffs for the consumers low and benefited the masses, policy delays or lack of clarity, coupled with the political fallout of spectrum allocations for 2G services, have meant that a lot of operators suffered setbacks or proceeded cautiously; also, the move from voice to data through 3G has met with limited success.

The woes of the industry have been compounded by the growing need for more spectrum. Operators have been asking the government for the release of more spectrum so that they can satisfy the growing demand for mobile voice as well as data services without sacrificing service quality. Many have reached the capacity limits of their infrastructure and badly need the spectrum to continue serving customers satisfactorily.

Thankfully, the government is working on sorting out these issues and some of the spectrum held by the Indian Army will soon be released for telcos. There is also a lot of hope among industry watchers from the next round of spectrum auction due to take place in February 2015.

The next phase of growth
The Indian government has been pushing for wider broadband penetration in the country from time to time. However, these attempts have met with limited success thus far: the National Telecom Policy 2012 had set the target of 175 million broadband connections by 2017 and 600 million by 2020 at 2Mbps and higher speeds like 100Mbps on demand. Against this, India achieved only about 60 million broadband connections as of March 2014 (source: a TRAI consultation paper).

While initially, fixed lines, and cable and fibre optic were seen as the primary means to deliver broadband, the explosion of mobile connections and low-priced smartphones in the past couple of years signals that for a country like India, mobile broadband is the way ahead.

India’s burgeoning young population – half of its 1.2 billion people are said to be below 25 years of age (as per data from Census of India, 2011) – is embracing the mobile Internet like never before. Despite relatively slower speeds and other constraints, as per industry estimates, India is said to be home to 100 million Facebook users, over 50 million WhatsApp users and close to 30 million online shoppers.

The impressive-looking numbers notwithstanding, India ranks quite low in global lists of broadband penetration, e-commerce or overall social media/Internet usage (number of hours spent online, for instance). The next phase of growth will come from new and enabling technologies such as LTE for the provision of high-speed 4G mobile services. This will help take the economic benefit accruing from higher mobile penetration even further. According to analysis by EIU and Booz & Company, there is a high correlation between per capita GDP and broadband penetration for national economies. A 10% increase in broadband penetration corresponds to a 1% increment in per capita GDP on the regression curve. What’s more, the higher the broadband penetration (and higher the speed of access) in a country, the higher is its competitiveness, as per the Global Competitiveness Index of the World Economic Forum.

To realise the social, economic and technological aspirations of its youth and to avoid missing the bus on the mobile data revolution now underway in many parts of the world, India would need to quickly ramp up its telecom infrastructure. Leaving the policy confusion and other issues behind, the country is at a juncture where it can make another leapfrog technologically—from 2G and 2.5G (there isn’t much true 3G to speak about) directly on to 4G.

Worldwide, more and more telcos are putting their trust in the LTE technology to roll out 4G—and given the current market dynamics and the enhanced spectrum availability in the 1800 MHz band, LTE is also the way India should go. Among the motivations for the country to opt for LTE: better access speed, latency, capacity and cost efficiency of 4G/LTE against 3G; wide global availability of devices compatible with the 1800 MHz band; and the existence of a preliminary LTE ecosystem that can leverage the previously auctioned spectrum in the 2100/2300 MHz band (as many as 215 devices are compatible with 2100 MHz and over 100 with the 2300 MHz band).

Not only do 4G networks deliver higher throughput (82Mbps downlink and 18Mbps uplink), but the higher capacity is also delivered across the entire cell. This means a much improved consumer experience and thus higher productivity and economic benefit. In addition to delivering enhanced services on multiple quality parameters, LTE also offers better cost efficiency, providing the lowest total cost of ownership (TCO) compared to other technologies such as EDGE and 3G. With increased coding efficiency and higher throughput per site, LTE can indeed reduce the TCO per Mbps to at least one-third that of current 3G technologies.

With a new government at the centre that has shown keen intent and resolve to accelerate economic development powered by technology, India is once again at an inflection point of ICT-led growth. From the signs of revival of hectic economic activity visible all around, it could be just a matter of time before the mobility story of the country moves forward to a newer, even more exciting climax.


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