Rebuilding, reloading and rebooting telecoms 

The Tower and Infrastructure Providers Association (TAIPA) was constituted in 2011 as an industry representative body registered under the Indian Society registration act, 1860, for promotion of healthy growth in telecom services. As an industry voice, TAIPA has made significant contribution on policy advocacy front.

Reflecting on “25 years of business communication” Robust telecom infrastructure is an essential enabler for telecom growth, which is important for economic development and improvement of the quality of human life. In the last decade, mobile service providers, device makers and internet companies built a virtual second world for us to live, work and play in – a digital one.

The sector has emerged as key enabler of digital India, with various new services / applications like digital payments, Aadhar, financial inclusion and e governance, e commerce, etc., dependent upon the creation of a robust telecom infrastructure. During the last few years, growth become data centric as the proportion of 3G/ 4G customers has risen dramatically.

The journey had effectively started in 1994, when, in line with new economic policy 1991, the Government opened the telecom sector for private investments.  In the beginning, the Government issued two cellular licenses per telecom circle followed by allocation of third cellular license to BSNL/ MTNL in 2000.

In 2001, the fourth cellular license was awarded through an auction. Between 2003 and 2008, the unified access service license was awarded based on the price arrived for the fourth cellular license. Pursuant to the Supreme Court order in 2012, the spectrum was auctioned and auction continues to be the norm today.

The telecom tower industry has played a critical and pivotal role in the unhindered growth of India’s telecom sector. It is quite evident that the growth of telecom services could not have been possible without a robust and ubiquitous telecom infrastructure.

India is a significant player in the Asia tower market. India has the second largest number of towers in the Asia region.
Evolution of telecom infrastructure industry in IndiaIn 2000, the telecom infrastructure industry came into existence with the DoT inviting applications for IP-I registrations. Prior to that, telecom service providers were installing towers and other passive infrastructures on their own and there was no sharing. Even up to 2005, the telecom towers were being operated under integrated model and no sharing was taking place.

However, post 2005, the tower industry evolved under the independent tower companies. The telecom sector requires continual investments for ever increasing capacity and coverage requirements as well as due to technology evolution. The tower companies/ IPs reduced the capex burden on telecom operators and brought in much needed investments through a novel concept of “sharing”.

The model has led to faster geographic rollout and an improved quality of service and lower prices for consumers. The tower sharing has been the benchmark concept globally and has become a Harvard Business study. The energy savings depend upon the tenancy factor.

Advantages of passive infrastructure sharing model
The sharing model has many direct and indirect benefits. The major benefits are given below:
Economics: More efficient use of capital for creating national assets
Aesthetics: Reduce Tower Proliferation and improved aesthetics
Service access: Faster rollout
Safety: Players have incentive to follow prescribed norms
Protects environment and energy savings
Quality of service: Better coverage quality
Standardisation: By using IIT/ TEC design for towers.

The capex and opex efficiencies achievable, due to passive and active infrastructure sharing:
Passive infra sharing cost savings 16-35%; capex 16-35%; opex active infrastructure sharing (excl. spectrum) 33-35%; capex 25-35%; opex active Infrastructure sharing (with spectrum) 33-45%; capex 30-33%; opex

TAIPA achievements TAIPA has been making significant contributions to the telecom infrastructure sector. A few of these are listed below:
* Due to the sustained efforts by TAIPA, telecom was accorded infrastructure status vide gazette notification number 81 on 28th March 2012.
* The first telecom infrastructure policy was brought out by Madhya Pradesh in 2012. Subsequently, advisory guidelines on tower rollout were issued by DoT to states in August 2013.
* TRAI, recommended enhancement of scope to include active infrastructure sharing in addition of passive infrastructure sharing, with the Infrastructure Provider-1 (IP-1) category of registration, in its recommendations issued in January 2015 and February 2018.
* In 2018, the National Digital Communication Policy was notified which, under its missions, has embarked on an enhanced scope for IP-1 registration with the introduction of active infrastructure sharing in addition to passive infrastructure sharing.
* The Government notified Right of Way rules in 2016, which were applicable to telecom licensees initially. Due to sustained advocacy efforts by TAIPA, vide a clarification issued by DoT in May 2018, the IP – 1 service providers were christened as a licensee under Right of Way rules, 2016.
* The targets set up to install RET solutions were technically infeasible. After TRAI recommendations, DoT, in 2019 has revised its circular and made the installations of RET solution voluntary, while retaining the Carbon footprint reduction targets.
* TAIPA has been collaborating with state and central government officials and the sustained efforts have resulted in alignment of 15 states’ policies with Right of Wary Rules, 2016 so far. It has also assisted the State Governments in developing online portals for single window clearance and so far, 5 states have launched their portal for granting online approvals.

Innovations – reduction in energy intensity by infrastructure industry/ TAIPA
-- Development of unique model to promote renewable energy “Renewable Energy Supply Company” known as RESCO model
-- Emphasis on other green solutions like storage batteries, energy efficient solutions like FCUs, indoor to outdoor conversion etc.
-- The concept of diesel free towers was developed. The diesel free towers are those which have diesel consumption of less than 100 litres per quarter.
-- TAIPA has been monitoring the key performance indicators like use of high efficiency battery banks, indoor to outdoor conversion, Renewable energy based towers and above all, the diesel-free sites.

Government initiatives
The sharing business model has thrived on enabling Government policies. In 2013, the Government issued advisory guidelines to states for rollout of towers. This was followed by notification of Right of Way rules in 2016 under the Indian Telegraph Act, 2016.

The Right of Way rules, 2016 have provided a truly transformational framework to the States as well as industry with provisions like state- wide single uniform policy, reasonable fee structure, web based single window mechanism etc.  So far, 15 states have aligned their policies with RoW rules, 2016.

National Digital Communication Policy, 2018
The Government has notified a transformational, innovative and progressive policy “ National Digital Communication Policy” in October 2018. The policy through, its Connect India, Propel India and Secure India Mission, has set up the vision to fulfil the information and communication needs of the citizen and has laid emphasis on creating digital communication infrastructure.

The policy document also envisages the enhancement in the scope to active infrastructure sharing has been envisaged within the IP-I registration. The implementation of this policy framework would bring in the much needed investments to the telecom sector.

Digital India and smart cities
The Government of India has embarked upon Digital India mission; to transform India into digitally empowered society and knowledge economy. The mission is to drive economic growth and improve the quality of life of people by enabling local development and harnessing technology that leads to smart outcomes.

About 100 Smart cities are being set up with the objective to promote cities that provide core infrastructure and give decent quality of life to the citizens, a clean and sustainable environment and application of “smart solutions”.

Telecom infrastructure industry: Forward path for rebuilding, reloading and rebooting
The Indian telecom market has shrunk from a 10-12 player market to a mature four player construct. The carrier neutral tower co model, which hinged on tenant addition, has to be rebuilt, reloaded and rebooted as well.

The market is now data centric, aided by reduced prices of smart phones, data tariffs and availability of various kinds of applications/ services over the smart phones. New generation technology such as 4G, 5G and IoT require formidable network performance, which has triggered the need for diverse infrastructure mix.

The growth of macro sites is expected to be modest in the coming years, majorly driven by capacity expansion for data services for 4G services in immediate term, and later for 5G launch. Going further, the enhancement of scope for active infrastructure within the IP I registration would prepare the tower companies to embrace emerging opportunities in small cell, Wi-Fi, IoT, fibre-to-the-tower, etc.

The telecommunications sector is preparing the next generation ecosystem where “data” is the main stream and enabler for the upcoming technologies such as the Internet of Things, blockchain, AR/VR and artificial intelligence. Keeping in pace with the growing data consumption, the tower companies are reshaping their business models and exploring newer business avenues such as small cells, in building solution, fibre leasing, data centres and Wi-Fi deployments by leveraging the sharing concept.

The ubiquitous rollout of 5G would require mushrooming of small cells and huge backhaul bandwidth, which could only be enabled by tower fibrisation.

The number of telecom towers required to rollout 5G may be double the current numbers. 5G would require rollout of small cells as it would be operational on a higher frequency spectrum and therefore, lesser coverage. Small cell rollout may require special provisions for street furniture, Government land and buildings, metros, bridges etc. In order to be future ready and for continually developing a robust infrastructure suitable for new generation technology, TAIPA has been engaged with the Government and the regulator and has provided its recommendation.

To summarise, the infrastructure providers are in the transformational mode to support the data centric growth in telecom series which would continue to grow as the technology evolves to 5G and aided by reduced data prices, smart phones and mobile applications. The policy reforms like enhancement in scope for IP-1, rationalisation of taxes and duties i.e. property taxes and administration fee, securitisation of telecom infrastructure, single window clearance and availability of Government lands/ buildings would provide tremendous impetus to the telecom infrastructure sector.

-- Tilak Raj Dua
-- The author is the Director General, TAIPA and Chairman ITU-APT