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Advancing Indian telecom sector towards intelligent hyper-connectivity

While data utilization grew exponentially, data monetization did not keep pace, leading to visible financial strains on the telecom industry

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VoicenData Bureau
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Telecom PLI

The Indian telecommunications landscape has seen many heady booms and few teary busts over the past 25 years. The exponential growth in the sector over the past two and half decades has catapulted the Indian telecom market into the global top two in terms of the number of subscribers.

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The sector received its first fillip when in 1985 the Government of India carved out the Department of Telecommunications (DoT). However, telecommunications services largely remained a luxury through the 1980s and early part of 1990s. The major policy boost came in 1994 when the National Telecom Policy was announced. The primary motive was to pave the way for rapid penetration by soliciting private sector participation and funding to mobilize the resources needed for the sector's explosive growth.

Over the next couple of decades, the evolution of the Indian telecom sector was nothing short of a miracle as it grew at a CAGR over 40% . Today, India is the world's second-largest telecommunications market, with about 1,183.53 million telephone subscribers, predominantly wireless (>90 percent). Gross revenue of the telecom sector stood at INR 2,37,416.6 crore (USD 33.97 billion) in 2018-19.

While the above achievement is truly a global success story, the last three years have not been so rosy for the industry. The telco revenue model has shifted from per-minute voice charge to bulk data packages. While data utilization grew exponentially, data monetization did not keep pace, leading to visible financial strains on the industry.

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As a result, there was rapid consolidation - the number of operators has come down to four from a heady and unsustainable 11 operators a few years ago. With 4G (LTE) increasingly becoming the mainstay and 5G on the anvil, there is renewed hope for sustained growth of the industry.

Four ways to boost sector

Here are four ways to boost the sector further:

* While the Government of India has launched the National Digital Communications Policy 2018 that envisages attracting investments worth USD 100 billion in the telecommunications sector by 2022, there is an urgent need to ensure a clear and consistent level playing field to bring back rigour in the sector.

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* Revenue models need to be enhanced through innovative new offerings as flat data bundles are incapable of driving sustained revenue growth. One needs to garner high-calorie revenues by creating the right ecosystem of content, applications and services over the hyper-fast, intelligent data network; else the telecom operators will be reduced to being a bit pipe.

The telecom industry needs to boost service delivery experience and unlock new revenue streams via creating business networks and ecosystems to enable at scale ecommerce, blockchain-based b2b transactions, media content distribution, telemedicine, education, digital identity etc.

* Infrastructure deployment is needed at a radically low cost if the industry has to sustain and grow despite such low average revenue per user (ARPU) levels. The mass adoption of hybrid multi-cloud can be a game-changer. IBM, post the Redhat acquisition, is in an ideal position to helping telecom operators virtualize their network at scale via cloudification, thereby, securing a vastly streamlined CapEx and OpEx curve.

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The need of the hour is to build a truly open-source based ’virtualized’ environment to host network applications. This will not only enable a dramatically faster deployment but also reduce the deployment costs significantly.

* Brutal automation at scale in network operations can move the needle on key business parameters viz. cost take-out, revenue boost or end-user experience. Despite the advent of 3G and 4G, network management approach remained more or less the same over the past decade. As a result, the cost of running huge nationwide networks became unsustainable. Self-provisioning, self-healing and autonomous operations are of paramount importance.

Artificial Intelligence (AI) led automation is key to alignment of cost to new realities while delivering much better customer experience. Enterprise-grade AI such as IBM's Watson platform can help automate many routine tasks that result in significant cost savings in network operations.

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Telecom is at the epicentre of the fast-accelerating industry convergence. Creation of business networks spanning industries requires telecom bedrock. Indian telecom operators have a massive opportunity to contribute to Government of India's ’Digital India’ mission by designing pan-industry value-chains that deliver convenience, experience, reach and functionality at reasonable cost levels.

-- Vishal Awal

-- The author is VP & Managing Partner – Telecom, Global Business Services, IBM India/South Asia.

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