The Telecom enablers register 21% overall growth taking the total revenues to Rs 291,227 crore in FY 2017-18

The entire telecom enablement ecosystem – infrastructure, equipment, devices and solutions providers, had another difficult year of transition. With the telecom debts crossing over Rs 5 Lakh crore cumulatively, the investments into infrastructure, equipment and solutions continued to be on the lowest ebb. For every rupee being spent on the expansion, the operators looked to evaluate with all caution to ensure that there is a return on the investment immediately rather than developing for the future.

With that approach, it was more of network strengthening rather than expansion beyond the normal repairs and maintenance costs critical for service continuity. Nevertheless, operators continued to invest in expanding 4G networks, upgrading to 4G Advanced as well as bootstrapping the digital experience to enhance the customer experience. The investments were aligned to effectuate a shift from traditional telecom to the new age digital telecom.

However, this did not reason in growth across the various segments of telecom Infra and equipment ecosystem of the telecommunications. It continued to be the growth of user devices – smartphones and data cards (MiFi devices) that had a positive bearing on the overall ‘vendor’ or supply side of the telecom sector.

It was due to a strong growth of over 42% in the user devices segment that the overall revenues for the infrastructure and equipment providers grew by 21% to Rs 291,227 crore. If the supply side of the equation is looked without the user devices, there is hardly any growth, in absolute terms 0.8% compared to previous year.

Last financial year, FY 2016-17, the carrier equipment, infrastructure and solutions side saw activity primarily due to Jio investments in the network. In FY 2017-18, it was for incumbents to ramp up and bring their networks closer to Jio in terms of technology as well as capabilities. This year, the networks saw upgrade in terms of IMS (IP Multimedia Subsystem) architecture, essentially, to digitalise the networks and be able to offer VoLTE and other IP grade services. At the same time, incumbent operators also geared up to have massive MIMO installations (4G advanced) as well as FTTx on the fixed line telephony side.

Among the segments within telecom infra, equipment, devices and solutions, Data Cards (MiFi devices) led the industry in terms of growth registering a whopping 79% increase in year on year revenues, followed by Smartphones with 43% increase and Test and Measurement ranking third in growth at 20%. The growth in these segments was primarily due to massive penetration of JioFi (MiFi) devices, upgrade of Smartphones to pre-premium and premium categories and testing of 4G and 4G advanced networks being commissioned during the period, respectively.

Among the fast-declining segments, PBX Systems and enterprise Desk Phones saw a steep decline in the overall revenues at 25% and 19% respectively. The distant third segment was Optical Networks and IP Integration for carrier networks with 8% decline in revenues.

The outlook for the next financial year looks in the same direction. However, the key to rejuvenate the market would be in how soon 5G becomes a reality. Nevertheless, tests and pilot networks - if all regulatory steps are journeyed till then – shall keep the infra and equipment side excited and could also see some growth in the market. The other opportunity would be further investing in the IP-fication of the networks that would include laying of fibre as well as development of digital solutions to interface with customers on the service as well as application levels giving a digital face to the telecom networks.