New technologies around AI, ML, cloud robotics, and block chain have been executed or implemented for operations in significant ways, in order to make sure that we are ready for that rollout, which will happen in future.
At the recently concluded TLF 5G conference conducted by Voice&Data, P Balaji, Chief Regulatory and Corporate Affairs Office, Vodafone Idea spoke about the opportunities and challenges for the telecom sector.
“The good news is a lot of progress has happened in the last 12 to 18 months as far as the sector is concerned. I think we hit a low in 2019, when there was a lot of adverse judgment, and a lot of headwinds for the industry as a whole. Since then, the government has really done a stellar job in terms of coming up with the reform package in September 2021, which allowed for the industry to stabilize. They’ve also given a very clear signal about the industry structure. They want to make sure that there is fair operator play in the industry. They're also clear that they need to provide adequate time for the industry to repair itself because the last six or seven years have been brutal. All of that is very far-reaching, and one must absolutely congratulate the government for transformation policy,” he said.
Mr Balaji highlighted two points where the government played a vital role. The recent 5G auctions are a very clear reflection; the way they were conducted was to ensure a fair amount of spectrum available for all operators to buy what they needed. Secondly, the government ensured that the payment terms put in place allowed for investments to go into the network rather than ending up in huge upfront contributions to the government exchequer by way of paying for spectrum.
He also concurred with Mr Akhil Gupta of Bharti Enterprises, regarding the financial health of the telecom sector, the need for repair, and the necessity of having an adequate return on capital. “He's absolutely right when he says that the ARPU needs to between 250 and 300 Rupees at a minimum in the next one to one-and-a-half years’ time. I'm sure that with new technologies, new services, and everything else that's being rolled out, that would be a journey that would actually start soon.”
The overall digitization plan that the government has, and that the industry has is tremendous, which is driving the need for a lot more investment into robust infrastructure, Mr Balaji said. There are 700,000 base stations installed across the country, all on 4G that over the next few years will start to migrate to 5G. For enhanced coverage, 500,000 more sites would be needed – which will be the microcells needed for 5G to be ubiquitous. “I'm not talking about just the telecom space, or the tower space, but also what AWS does, what the device manufacturers will put in and so on. But that's a significant amount of investment that needs to be made in this industry. Therefore, making sure that every layer of the ecosystem is having enough cash flow and returns is going to be a very critical part,” he said.
Speaking from the parent company, Vodafone’s experience, Mr Balaji said that a lot would be driven around industry 4.0 – on enterprise solutions, the opportunities of which are expected to be significant. “It requires a lot of collaboration and partnership which has to come in between the telecom players, the infrastructure providers, as well as the intent enterprises. In the space of automotive, manufacturing, we expect a lot of use cases to come up, whether it's in the space of smart factories, or in synchronized planning, smart supply chain networks or smart logistics operations - all of those will be significant drivers for uptake of 5G.”
The second area, he said is healthcare. “It's very evident that with the with the need for primary and secondary health care to tier two and rural India, it's a good opportunity that you have these robust networks coming up and the speeds available to make sure that there is the adequate interplay between the healthcare providers and the telcos to provide services around health care area.”
Smart cities are another area that will take off in a pretty big way, said Mr Balaji, “with smart lead management over the smart grids or metering system, whether it's smart traffic management systems, or traffic lights, or video surveillance, and so on. Or even for that matter, waste management, I think there'll be significant opportunities that are going to come up in this dimension as well. Agriculture is another area that potentially 5G can make a transformational impact.”
In order for the expected impact to occur, operators need to prepare the groundwork. “4G needs to go deeper and 5G needs to come in… But I think at the heart of the whole thing, the architecture of networks has been substantially improved in the last 24 to 36 months in preparation.”
Taking Vodafone Idea’s example, Mr Balaji said, “We’ve absolutely moved a lot of our applications to the cloud. New technologies around AI, ML, cloud robotics, and blockchain have been executed or implemented for operations in a significant way, in order to make sure that we are ready for that rollout, which will happen in the future. With the virtualization, and with all the cloud players, the ability to turn up capacity on the server side on the data side is, very easily done, as you start to see scale up in the enterprise spaces. So as a company Vodafone Idea, building on the experience of our parent company, as well as our own strong position in the enterprise space, is engaged with our enterprise partners. And looking at the use cases that can be put up in the early rollout of 5G into enterprises, to begin with. And over time, as the devices pick up, as the density of 5G devices and our customers pick up and the competitive intensity picks up that we will also go into more large-scale deployment in tier one cities, and then thereafter the tier two and tier three cities.” Talking about government support, Mr Balaji also agreed that Gati Shakti is a great initiative with the state and local administrations collaborating with the center and the industry. “The fact that today we have 35 - 36% of towers fiberized needing to go up to about 80-85% is a real thing. The fact that the government has made E and V Bands available for microwave backhaul, as an interim step is again a very good step. In effect, from planning to execution is where the industry, the government, and the ecosystem players are. But at the core of it is to make sure that financially, things are sorted out sooner than later. 18 months is a good time rather than leaving it for three years. I am quite hopeful that with the maturity that's come into the sector, with the space that is there a structurally good number of operators, strong infrastructure players, and renewed interest in the sector in terms of investment, I think we're looking at a good opportunity in the future, of course, with a few headwinds, which I'm sure will disappear over time.”