From connecting people with 5G services to slashing operational costs, the country’s revitalized telecoms sector is enjoying a blossoming of reforms and is expected to attract more than Rs 1.5 crore in network-building investments in the new year.
Once the poster child of India’s growth story, then a debt-ridden segment with many players atrophied and now riding the wave of reforms and big investments, the telecoms sector is turning a page in 2022.
During Adani group has yet to unveil its comprehensive plan for the telecom business, trust industries Chairman Mukesh Ambani has pledged Rs. 2 lakh crore investment for the launch of a 5G nationwide network by December 2023.
“It has been an exciting year due to the launch of 5G, a technology that has been awaited for 4-5 years. This is a big step forward. We look forward to a robust rollout of 5G over the next year, because this year is just the beginning.
“We are all working on use cases. We call on governments, ministries, start-ups and innovators to come out with innovative use cases in the Indian context that will boost businesses and also solve some public problems and some challenges,” Telecom Secretary K Rajaraman told PTI.
He also said the government will continue to take measures that will reduce operating costs for telecom operators, a move that will result in higher margins for the sector, which has been suffering from a debt burden for more than a decade.
trust jio has pledged Rs 87,946.93 crore for the spectrum, which it must pay over a period of 20 years, leaving a balance of Rs 1.12 crore. While the company had invested a portion in building its own 5G core, it will invest the bulk of the Rs.1.12 in capital expenditures for 5G in 2023, sources say.
Bharti Airtel It is expected to invest in the range of Rs 27,000-28,000 crore and will be state owned BSNL around Rs 16,000 crore in 2023 for the rollout of a self-developed 4G network TKS and C-DoT-led consortium. Later, the system will be upgraded to 5G.
Collectively, investments worth more than Rs 1.5 lakh crore are expected in the telecom sector.
COAI Director-General SP Kochhar said the structural and procedural reforms in the telecoms sector approved by the government last year, such as the automatic route, as well as streamlining the bank guarantee, Adjusted Gross Revenue (AGR), interest rates and penalties and easing the Right of Way (RoW) have had a positive impact on the sector in 2022.
Digital Infrastructure Providers Association director-general TR Dua said most state governments followed the reforms led by the center and developed policies suitable for telecom infrastructure this year.
Recently, Minister of State for Telecommunications Devusinh Chauhan informed Parliament that telecom operators are installing an average of 2,500 base stations per week to provide 5G services in the country, and as of November 26, 20,980 cellular base stations had been installed.
Telecom Equipment Majors — Nokia and ericsson — have ramped up production in India. The Government has also secured investment commitments of Rs 4,115 crore from 42 firms shortlisted under the Production Linked Incentive (PLI) scheme for the manufacture of telecommunications equipment.
Nokia said it witnessed the world’s fastest 5G network rollout in India.
“In 2023, we hope for continued government support to enable the digital ecosystem to truly reap the benefits of the socio-economic applications of 5G technology. 2023 is also expected to see wider adoption of private networks by businesses and businesses to increase efficiency and security,” said a spokesman for Nokia India.
Nitin Bansal, MD, India & Ericsson’s Head of Networks, Southeast Asia, Oceania and India said Enhanced Mobile Broadband (eMBB) and Fixed Wireless Access (FWA) are expected to be the first 5G use cases in India. This technology will help bridge the digital divide by addressing concerns about the limited penetration of fixed broadband and enhancing the data experience on the go.
Manish Vyas, President, Communications, Media and Entertainment Business, and CEO, Network Services at Tech Mahindra, said 5G will be used to develop revolutionary applications and innovative use cases in industries such as manufacturing, healthcare, BFSI and autonomous driving.
“We see 5G for Enterprise (5G4E) as our next growth strategy and are already running several pilot projects around the world,” he said.
Rahul Tandon, Senior Vice President of IDEMIA India said that with the rollout of 5G connectivity, India is opening up many new opportunities to improve the productivity and security of not only online transactions but also Machine2Machine (M2M) transactions.
As telecom operators invest billions in building a 5G network, a senior Airtel official said there are currently no applications that could help companies monetize 5G.
“5G helps offload data traffic from the 4G network. 5G is a very efficient and better technology, but currently applications like video, games, etc. work well with 4G. We have yet to see applications that can specifically help monetize 5G,” the official said.
He also said the company expects growth from customers upgrading their service from 2G to 4G, prepaid to postpaid and postpaid to home broadband, as well as tariff increases.
The annual tariff increase by telecom operators – Bharti Airtel, Vodafone idea and Jio – in the range of 18 to 42 percent has brought companies a sustainable level of average revenue per user (ARPU) in 2022.
Vodafone Idea had taken the lead in November 2019 to increase mobile service tariffs by as much as 42 percent. Bharti Airtel and Reliance Jio followed VIL in rate hike.
The 2019 tariff increase came after a break of around five years. Data prices have fallen 95 percent from Rs 269 per GB in 2014 to Rs 11.78 per GB in 2017.
Bharti Airtel is conducting a pilot to increase its entry-level mobile plan by about 57 percent. The company has increased the minimum top-up price for a 28-day mobile plan in Haryana and Odisha by about 57 percent to Rs.155.
A company official said it would look at the outcome of the tariff increase in another six weeks to decide whether to increase tariffs across India.
While VIL has sailed into 2022, 2023 is likely to be a pivotal year for the company as the heavily indebted company waits for the government to take a roughly 33 percent stake under the program to convert interest charges into equity.
A statement from JM Financial in October 2021 said VIL must have an APRU of at least Rs 190-200 by March 2023 to survive, but the company is far from there and struggling to control subscriber churn.
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