10 Focus Areas for Telcos

Tech & Business Trends

By Gagandeep Kaur

1. Network Upgradation and Expansion: Data growth is finally picking up momentum across the country and not just in metros. This means that the telcos would need to further expand 3G and 4G networks. Besides this, newer technologies mean that the service providers would need to upgrade the existing network. This process has already started with Vodafone launching Project Spring for upgrading its network in the country. Besides, Bharti Airtel is also going through overhauling of its network across the country.

All this means that good times are here again for the equipment vendors.

2. Small Cells Surge: The growth of data means that the telcos would need to upgrade and expand their network. The availability of spectrum in the higher frequency band implies that service providers would need to deploy small cells. The movement in this segment is already visible with Ericsson’s recent announcement of launching small cells product in the country.

However, the year will witness deployment of small cells in dense urban areas only. The telcos experience heightened congestion in these areas.

“Small cell market is likely to witness a surge in dense urban areas/large cities especially with the launch of 4G services as it allows operators to address network coverage issues associated with 2300MHz band. However, the small cell deployment will remain limited to areas with high data traffic or those which require in-building coverage (e.g. malls, airport, corporate building etc.),” says Rohan Dhamija, Partner, Head - India & South Asia, Analysys Mason.

3. SDN and NFV: In an effort to reduce operational cost, the Indian telcos are likely to start movement towards deploying Software Defined Network and Network Functions Virtualization (NFV) this year. Some trials are already believed to be underway to virtualize network functions. The coming year is likely to witness service providers adopting SDN and NFV to offer enhanced services to their customers.

4. Analytics Integration: The Indian service providers will be seen adopting technologies to improve the customer experience. These involve deployment of Customer Experience Management (CEM), dynamic policy applications, predictive analysis and lastly artificial intelligence.

“Indian telcos would be adopting a number of dynamic policy application to improve the experience being offered to their customers. The coming year will see a lot of investment in the first two stages in India. Besides investment in the network expansion, it will witness a lot of investment in analytics and top-end applications and how to provide better experience to the customers,” says Kamlesh Bhatia, Research Director, Gartner.

5. Enterprise Mobility Uptake: Experts believe that enterprise mobility will come into its own in the coming year. The enterprise segment still does not view mobility as critical to their strategy but this will change in the coming year.

“The coming year will also see an uptake of enterprise mobility. The enterprise community will see it as an enabler of change and will start investing and moving towards a more structured approach to adopt mobility,” says Bhatia.

The trends like Machine-to-Machine (M2M) and Internet of Things (IoT) are further likely to provide impetus to enterprise mobility. Expansion of IoT will also fuel Big Data, compelling the industry to come up with solutions to deal with humungous amount of data, both structured and unstructured.

The mainstreaming of enterprise mobility will emerge as a business opportunity for the operators. Most of the service providers are already focusing on enterprise mobility and this is likely to increase in the coming year.

6. Spectrum Auction: The upcoming auction is critical for the industry in more than one way. The Government will auction spectrum in 900 Mhz, 1800 Mhz and 800 Mhz. It is absolutely critical for some of the service providers who must get spectrum for survival in these auctions.

It is also critical for the industry that it does not end up spending more than necessary on the spectrum otherwise like in 2010 it might plummet the industry in a cautious mode. This would also mean that the momentum to upgrade network and expand 3G and 4G network would be seriously hampered. At the same time, limited spectrum up for auction means the chances are that the telcos might end up going overboard during the auctions.

7. Launch of 4G By Reliance Jio: It is easily the most awaited event, not just for the industry but for the entire country as well. Last year, Reliance Jio, the only pan India telco with 2300 Mhz spectrum, announced that it would be launching operations in 2015, five years after procuring the spectrum in 2010. Being a new technology the company took time to research and conduct trials before launching the operations. Reliance Jio also acquired a fair amount of spectrum in 1800 Mhz frequency band earlier this year.

Last time the company launched operations in 2002, it brought down the tariffs dramatically. This time again the indications are that the launch will be disruptive in more than one ways

8. Data Growth: This is a given. The telcos will continue to record growth in data across all the technologies like 3G, 4G, and so on.

“Data will continue to grow, not just in metros but also in tier 2 and tier 3 cities—it is a no-brainer. The dropping prices of smartphones and ecommerce is further helping the uptake of data,” says Kamlesh Bhatia, Research Director, Gartner.

9. Tariff Increase: Experts believe that there is a good chance the coming year will witness an increase in tariff. Increased investment to acquire spectrum in the upcoming auctions might result in an increase in retail tariff.

“The entire thing will lead to substantial cost to the industry, with no concomitant benefits, which will result in a reduction in competition, an increase in retail tariffs and cause significant inconvenience to consumers, with no benefit to any involved stakeholders,” says Rajan Mathews, Director General of Cellular Operators Association of India.

10. Consolidation: Indications are that the industry might go in for consolidation in the coming year. There was some movement in this regard in 2014 with Bharti trying to acquire Loop Telecom in Mumbai but it didn’t work out. With telcos like Tata DoCoMo and Aircel up for grab the signs are that the year will record mergers and acquisitions deals in the coming year.