As January ends, the projections for the operational and financial horizons of the Indian telecom sector look positive for 2016. The Indian telecom industry is likely to witness consolidation as newer technology trends emerge in terms of network and spectrum management, optimization, and sharing of active and passive infrastructure. Furthermore, newer technology protocols such as Internet of Things (IoT), M2M (machine-to-machine) are already at different levels of discussion and planning with the government and allied stakeholders. Infact, the global vision for 2020 focuses on innovation of tools and technology that determine how we communicate - facilitating an upward trend toward high data traffic in the age of the IoT.

One such step in the evolution of Indian telecom services is the clearance of the Spectrum Sharing and Trading Policy introduced by government of India, enabling resource optimization and maximization for superior quality of services and better revenue yields. Industry members have not just welcomed this positive step but have also effectuated business actions through strategic partnerships and consolidation of resources, including the recent spectrum-sharing deal between RCom and RJIO, spectrum-trading pact between Idea Cellular and Videocon Telecom, and M&A deals such as the three-way merger of RCOM, Aircel, and MTS.

This marks the emergence of new era of consolidation to not only maximize outcomes for shareholders but to the services-consuming public at large as well. The industry has seen successful roll out of 4th-generation LTE services, incorporating high-speed data as well as Voice-over-LTE, and it is expected that these superior communication technologies will facilitate the migration of consumers from 2G to the more efficient HSPA and LTE technology. In effect, COAI anticipates greater competitive realignment and projects substantial gains for the Indian consumer both in terms of value and experience.

LTE has been at the center of discussion and the fact that approximately 10 million users were using LTE in India by the end of 2015 testifies to the popularity of access Internet 10 times faster. The idea of long-term evolution gained much-needed encouragement after telecom operators and mobile handset makers understood the need to upgrade Internet technology, so that customers could access better and faster services. When implemented, LTE deployment will help in decreasing traffic congestion on networks by simultaneously improving network and call quality. Secondly, the government's much-anticipated announcement regarding the installation of public Wi-Fi in partnership with private industry was very well received by the public. This scheme has already seen the emergence of a few JVs, the government plans on reaching out to 500 million Internet subscribers along with ensuring the installation of 2500 Wi-Fi Hotspots by the next fiscal year.

It is being predicted that the regulator will work on creating a more transparent view on spectrum price, unconventional data monetization schemes, and differential pricing of data. High bids during spectrum auctions are often cited as one of the big issues in India. Industry expects the recently announced spectrum auction by DoT to provide a 60 percent increase in spectrum presently held by operators. For the first time, the industry will be faced with an abundant supply of spectrum. The industry will keenly await the pricing of spectrum to be put to auction. The financial condition of the industry will need to be addressed in order to assure a robust auction.

As we move on through the year, voice tariffs are expected to remain stable. Telecom operators will focus on maximizing marginal increase in respective areas due to exponential growth in data tariffs. Telcos should prioritize VAS services, content and applications offered in order to maximize data usage for innovative ways to improve data revenues.

With increasing demand, uptake, and adoption of new technologies for mobile communications, 2016 will prove to be a turning point for steps taken toward building effective infrastructure so that mobile telephony could be made available to one-third of the population in rural areas. It is essential to reach out to rural areas for the success of schemes like Digital India, Make in India, e- and mHealh, mEducation and e- and mgovernance.

The government as well as the industry have set ambitious targets toward proliferation of mobile telephony and broadband networks across the country, aimed at achieving 600 million broadband connections by 2020. Until November 2015, approximately 116 million had already been achieved and the remaining presents a challenging task of adding approximately 8 million subscribers per month until 2020. It will be of interest to see how telecom operators are able to tackle the requirements to install mobile sites and move ahead.


 

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