With over one billion mobile phone customers and an explosion of mobile data consumption over the past two years, the Indian telecom industry needs to migrate from traditional copper-based backhaul networks to dense optic fiber cable networks, according to Indian investment information and credit rating agency ICRA.
The proliferation of affordable smartphones, low data tariffs, increase in speeds of delivery and enhanced content have led to 539 million wireless internet subscribers in the country. This translates into daily consumption of 418,330 terabytes (TBs) of data. Each TB measures over 1,000 gigabytes. The data consumption is expected to grow over the long term with increasing applications, improving technology and more content. To meet the requirements, telecom networks need to be robust and have the capacity to carry large amounts of data and deliver it quickly, according to a new ICRA research report.
With each step on technology ladder from 2G to 3G to 4G and soon to be 5G, the fiber requirement has been increasing. 5G and its applications, which will likely grow exponentially in years to come, translate into speeds in excess of 10 Gbps as against the average speeds of 6 Mpbs achieved with 4G technologies in India (against a global average of 17 Mbps).
“Achieving such speeds make fiber connectivity essential. India’s high population density also translates into deeper and denser fiber network,” the report stated. At present, the country has about 500,000 towers of which only 22 per cent are fiberized as against 80 per cent in China. India has 110 million km of fiber deployed compared to 420 million km in the United States and 1,090 million km in China. Hence, India’s fiber coverage in km per capita works out to 0.09, which is far behind 0.87 for China and more than 1.3 for the United States and Japan. “The fiber density in India will have to increase at least four-fold. It means that fiber will evolve as a separate industry in some time, similar to the trajectory seen for telecom tower industry over the past two decades.”
ICRA estimates the present market value of fiber assets owned by major private telecom operators is about Rs 1.2 lakh crore. The extent of fiber rollout over the next few years will require investments of Rs 2.5 lakh crore to 3 lakh crore. Hence sharing of fiber among multiple telcos will be the key driver of a reasonable return on capital.
Trends of Indian Telecom Industry for January 2019 [SOURCE: ICRA Research]:
1) Total subscriber base at 1,203 million; YoY growth of 2.4%; MoM growth of 0.5%
2) 20 out of 22 circles reported increase in subscriber base on MoM basis; North East reported the highest MoM growth
3) Overall tele-density steady at 91.8%; Urban tele-density at 161.3%, rural tele-density at 59.4%
4) Wireless subscriber base at – 1,182 million; YoY growth of 2.6%; MoM growth of 0.5%
5) Active wireless subscriber base at 1,022 million; YoY growth of 1.0%; MoM de-growth of 0.4%
6) Vodafone Idea leads the market with active wireless subscriber market share of 37.6%, followed by Bharti at 32.4% and RJio
7) Urban wireless subscriber base at 654.2 million; YoY growth of 0.2%; MoM growth of 1.0%
8) Rural wireless subscriber base at 527.8 million; YoY growth at 5.7%; MoM decline of 0.1%
9) Wireline Subscriber base at 21.8 million; YoY decline of 5.5%; BSNL/MTNL continue to be the market leader
10) Broadband subscriber base at 540.0 million; strong YoY growth of 43%
11) For September 2018 quarter, total minutes on network grew 41.2% YoY, while MoU per subscriber grew by 43.9%.
12) For September 2018 quarter, data subscriber base and per subscriber usage continued to report healthy YoY growth