After 5G Auctions, what next?

After the auctions, what next? This is a question frequently asked after the successful completion of India’s 5G auctions. During the recently held TLF 5G conference, a fireside chat explored that, and other questions in detail. The session moderator was Pradeep Gupta, Cybermedia Chairman. The panelists were Sameer Vuyyuru, Head of WW Business Development for Communication Service Providers, Amazon Web Services (AWS), Rashim Kapoor, Executive VP & CTO Networks, Bharti Airtel and Lt Gen Dr SP Kocchar, DG- COAI.

Cybermedia Chairman, Pradeep Gupta started off the conversation by mentioning the unprecedented collaboration between the government and the industry but noted there were still challenges.

Lt Gen SP Kocchar, DG COAI said, “The cooperation between industry and government has been unprecedented and very fast-paced. It is certain to continue in the future.” The areas where a lot more work has to be done can be put in bullet points. The first area is infrastructure. About 65% to 70% of our towers are not fiberised as of now. With 5G coming in fiberisation is a must. There is a lot of effort by the government to bring in Essential Laws and regulations. For example, the RoW portal, the Gati Shakti portal is of great help. We as an industry are also trying to put in our best to see that fiberisation happens.

Pradeep further noted, RoW has been around now for more than a decade. Government has time and again said, if there is any problem come to us, but still, practically it doesn't work. What can specifically be done now?

Lt Gen Kocchar continued, “Practically it doesn't work because one is trying to solve a physical problem by physical means, ie, by the movement of files. This is the first time that we are trying to solve a physical problem with technology. The power of a baboo is to stop a file. With technology that will not happen. That is what we are seeing in the recent drive that the government has undertaken.  The cut in the processing time has come down to 21 days. This is the power of technology, to solve non-technical problems. So fiberisation of Towers, as well as RoW related or clearance-related issues. I would put that under ease of doing business. There are many factors, which are regulatory, policy, operational, and even strategic. The recent amendment of the Telegraph Act is a step in that direction. The government has taken a realistic view that outdated rules, regulations and laws have to go. In conjunction and in consultation with the industry. And the third one is cost optimization, which has always been a problem, and revenue generation. That is where a lot of collaboration is happening.”

Rashim Kapoor of Airtel, spoke about Airtel’s readiness and what is happening behind the scenes. “Our backend infrastructure is already with 5G, our core is ready, transport is ready. We have made our data center's infrastructure ready. We have also demonstrated lots of use cases during our trials in Hyderabad. During our trials in the key cities, we have demonstrated use cases both on the enterprise side and on the retail side, both on the high-speed broadband and on the enterprise side. As time goes by, we'll be basically rushing our rollout starting from the metros to the other places. And we'll be able to leverage our existing fiber assets to give the best customer experience”.

When asked if fiberisation of towers was one of the challenges faced by Airtel, Rashim said, “Fiberisation of towers is good to have, but now there are other options available. E-band has been a very welcome opportunity. E-band will complement fiber. It will give speed as high as one Gbps as the last mile speed, but challenges on fiber remain. Our endeavor is to fiberise our sites as much as possible. But as I mentioned, both RoW issues, the cost of RoW and time to fiberise, those issues still remain”.

Pradeep noted, A big debate that has been going on is, who is going to pay for all these investments that are being made by the telcos in the infrastructure? Is it going to be retail? Is it going to be business?

Sameer Vuyyuru of AWS said, “The cost aspect is going to depend on the revenue generation aspects. Those are tied together. When you can basically align the cost of implementation with the revenue generation and not have that two-to-three-year lag that has historically happened in the industry, that question kind of goes away. The consumer, whether it be an enterprise, or a person, is the one who's actually funding the service that he or she or the corporation needs. So we're a big proponent of experimenting in multiple industries with multiple use cases, and figuring out which of those historically generate revenue, and aligning the investment to that”.

Sameer added, “There is a large belief that the 5G deployments will be enterprise-driven. We share that belief. But I don't think we should ever prognosticate as to which industry vertical is going to be the first one to go”

On the broader picture, Enterprise would be perhaps 20%, and 80%, would be coming from retail the moderator noted. Sameer elaborated, “I think there is about a five-year ramp for the enterprise side to actually start becoming profitable and meaningful. Until then the consumer is still going to be the prime driver of adoption” our role as collaborators in the industry is how do you shorten that adoption cycle for the enterprise? Because right now, it's way too long.

Posing the same question to Lt. Gen. Kocchar, the moderator said, “It has always been difficult to get more money out of the consumer. Especially with past experience where competitors have come out with cheaper services and so on, ARPU is something that needs to go up.  what do you think can be the methodology for that?

Kochhar said, “Over a longer period, it will finally be the consumer who will be paying, but in the shorter period, I don't think with the Indian sensitivities’ that consumer is going to pay extra for just speed and latency. Initially, revenues will start ramping up on the enterprise side and the indirect effect will be on the consumer. The services which will be rolled out by the enterprise will be consumed by the consumer only if he/ she subscribes to 5G services and that is how the cycle will proceed. Revenue coming from enterprise should be around 70 to 80% initially, but over a period of maybe four to five years, it'll reverse. It will go back to the consumer but that is because the driving force will be enterprise adaptation.

On the question of what sort of technology solutions is Airtel working on to ensure those revenue streams can be captured, Rashim said, “Mobile broadband will continue to be one of the major use cases and because the speed will increase, the consumption will also increase. We have seen across the globe consumption increasing by 2x to 3x. That should be one of the revenue drivers. Fixed wireless access would be a new service that would get launched wherever fiber visibility is not there. Gaming requires very low latency and some guarantee on QS which can be one of the revenue opportunities on the retail side. On the Enterprise, I would say whenever the ultra low-density use cases become real, there will be many more use cases, but initially, data centers should be one big use case, then private 5G With a complement of slicing, and renting to the enterprise customer would be one of the use cases.

On what industry or enterprise could be the driving factor, Sameer said he gets asked this question all the time by most of the telco executives. Which industry should I invest in? My answer has always been, we don’t know. We’ve seen about 280 different industries being served. Pick the most flexible platform, and experiment in all 280. It costs nothing to experiment.

Sameer went on to share examples of other countries where security, safety, and education are some of use cases, he said, “I'll give you three use cases that we're starting to see really ramp at a broad level. The first one is the computer vision use cases. Really looking at a vertically integrated stack that uses intelligence to pursue where the decisioning on the computer vision takes place. So its security cameras. The telcos, in my opinion, should own that market, the wireless security aspect. The second one we're seeing in the United States, primarily, but also in Europe, is the state local education departments where the private networks are being asked for and being deployed. And the third one is really public safety.”

Kocchar shared additional views on what could be the verticals, and whether m2m, and industry 4.0 is becoming a reality. “Let me start by making an assertion, he said, nobody in the world knows which is the killer app today, everybody is guessing. He continued, wherever we require artificial intelligence insertions, wherever we require AR VR, augmented reality; those are the areas which we need to focus on. If we are going to look at 5G, wearing the spectacles of 4G, we will go wrong. This is what is happening today. We haven't yet started looking at 5G as 5G. Whenever we discuss, we talk of healthcare, we talk of education - that can be done with even 4G. So what is so special about 5G? That is where sensors come in. Computer vision comes in, processing comes in, which will not only change the lives of people but will also raise the level of employment to a different scale. Those are the things that affect people. And in a democracy, anything that affects the people is an application. I think anything which touches the lives of people in India will be the first application to work, which includes governance.

On the question of Open RAN, Rashim said, Airtel has a big focus on Open RAN. We started the journey early. Even with our 4G networks, we invested a lot of time and effort into that. With 5G, we have started doing some testing and even live deployment in some of the clusters. The main intent is to check the performance and the interop with the 4G network, which still remains a bit of a challenge. The second challenge to solve on ORAN is the cost of ORAN and with the new chipsets which are coming up, both from Intel and Qualcomm and building ORANS on those particular chips would definitely reduce the cost.

The last question was on the public cloud and directed to Sameer. What is the reality in India, in terms of the adaption of the public cloud? Sameer said, “specifically for the telco industry, we have engagements with all four and more of the operators here in India. There are multiple aspects to this. There is the application layer, and the data layer, but my sense is you're asking about the network itself. In the network, it is very early days. What I would encourage the community here to think about is, experiment with us. It costs close to zero and the upside is massive. Let's experiment and see how it works. Lt Gen Kocchar concurred, "Cost of experimentation is the reason why it will happen. Cost optimization and increasing efficiencies are what telcos want."