Indian Telecom 2013: The year that was and the way forward

End of Year 2012, the internet subs in India totaled 135 million and mobility subs were 864 million
2013 exit numbers would be 205+ million internet subs and 904+ million mobility subs
It is expected that the figures for Internet subs would pass 330 million by 2015
At the same time, Internet’s contribution from India’s GDP to grow from 1.6% in 2011 to 3.4% in 2015. India’s i-GDP (internet contribution to GDP) is expected to hit about $100 billion by 2015 – making it one of the most attractive investment locations and industries globally.

As a state, India is fully aware of the criticality of telecom sector not only in its contribution to the GDP – but also in its ability to transcend geographies as an enabler – and telecom as the portal to next generation services on wireless.

NTP provides the policy framework but the process based uncertainties exist – most of these around the spectrum pricing and tax disputes. The under-pinning policy regime and execution road map has to be clear.

In 2013, two important policy enablers have been the announcement and approval of the mergers and acquisitions policy and foreign equity participation of 100% in Telecom sector. Dominant players can now old up-to 50% telecom market shares.

However in the same breath, regulations such as airwaves acquired by a acquiring major would only be used for 2G services becomes extremely self limiting.

Telecom players were looking for market capitalization and consolidation. The operators have started to focus on subscriber quality and have done away with the lucrative dealer commissions and promotional minutes. After 2008, for the first time, India has witnessed a surge in voice tariff

While the industry hopes to hit the 1 billion subscription mark by 2014, it continues to be deeply constrained by the negative growth witnessed in 2012.While the industry hopes to hit the 1 billion subscription mark by 2014, it continues to be deeply constrained by the negative growth witnessed in 2012. The Indian Telecom Industry accounts for 13% subscriptions and 2.3% share of the global telecom revenue.

Low cost driving reach and affordability would be critical but a derivative of a favorable Tax regime. Telecom tower companies given slew of benefits (such as gap funding, external commercial borrowing, lower import duties, excise exemptions) with Infrastructure status is a major step forward in this direction.

I am not sure why MVNO is a dirty word for Indian Telecom – may be because Indian Telecom barons only see it wholesale voice and data resale. However, the more successful MVNOs world over(especially in Europe) offer far enhanced services to its customers.

Digital Literacy through Vernacular applications is a key enabler for spread of Internet.

Indian Telecom also need to get their act right in terms of spectrum, pricing and business cases. For instance, TDD LTE which has been provided the 2300/2500 MHz band, doesnot make any commercial sense. The network at those bands will be extremely local and patchy and thus a below par experience. There needs to be a clarity on the Digital Dividend 700MHz, which will not only help operator business cases but also enable wider coverages for broadband – which is so critical to the growth of the iGDP.