NEW DELHI: India’s telecom sector is expected to see some major developments in 2021 which will fuel the growth for all telecom operators. The government announced 4G spectrum auctions in March this year even as Reliance Jio expects 5G launch to take place in 2021. Additionally, clarity on BSNL’s 4G tender is expected this year even as other telcos and internet service providers continue to focus on their wired broadband businesses. India is also likely to see some adoption on the OpenRAN front this year.
Here are some trends and key developments that are expected to emerge in the Indian telecom sector in 2021:
This year, the big 3 telcos Reliance Jio, Bharti Airtel, and Vodafone Idea are expected to participate in spectrum after nearly four years. The auction is expected to fetch about Rs 55,000-Rs 60,000 crore the exchequer according to credit rating agency ICRA.
The government plans to auction 2,251 MHz with a total valuation of Rs 3.92 trillion in March 2021. It will sell spectrum in 700MHz, 800MHz, 900MHz, 1800MHz, 2100MHz, 2300 MHz and 2500 MHz bands.
The telecom department (DoT) is also expected to release the Notice Inviting Application (NIA) shortly ahead of the spectrum auction scheduled for Q1CY21.
While Reliance Jio with a subscribers base of over 406 million will seek to renew a large chunk of its expiring spectrum, Vodafone Idea (Vi) and Bharti Airtel would strengthen their broadband prowess to cater to increased data demand.
This is also the first time when only three private telcos would be bidding for spectrum holdings as the stiff competition in the sector has not only led to consolidation of telcos but also forced some telcos to exit completely.
Bharti Airtel and Vi – with about 294 million users and 272 million each – have less expensive airwaves, mostly in the 1800 MHz band, set to expire across eight circles each from July. Both have backup airwaves in most service areas.
According to a telecom analyst, Reliance Jio will have to shell out up to Rs 30,000 crore while Airtel would pay up to Rs 15,000 crore and Vodafone Idea only a few thousand crore since it has backup waves in services areas.
The successful bidders will also have to pay 3% of AGR, excluding wireline services, as spectrum usage charges for airwaves won through this auction.
5G likely in 2021?
Recently at the India Mobile Congress 2020 (IMC 2020), Reliance Jio chairman and managing director Mukesh Ambani said Jio would take the lead in launching 5G in India in 2H21 using in-house 5G hardware. He also added that Jio would take the lead in pioneering the 5G revolution in India. “5G auction should be done early enough after resolving all spectrum challenges. The technology is already proven and a plethora of handsets are available in the market. The use cases are available as well,” said Nokia India head Sanjay Malik in an interview to ETTelecom.
The low-latency, high-speed 5G technology presents use cases such as AR/VR, AI, high-speed broadband, among others. However, the spectrum quantum and the pricing have been a pain point for telcos in India.
Bharti Airtel, Vodafone Idea, and Reliance Jio have expressed that “right amount” of spectrum quantum along with a robust infrastructure policy is the need of hour, and not ensuring their availability would derail India’s 5G prospects.
Telcos have also said that the current availability of just 175 MHz for all service providers in the 3300-3600 mid band is “grossly inadequate” and would adversely impact the 5G rollout in the country.
COAI, which represent all three telcos, has urged the DoT to ensure at least 400 MHz per telco in mmwave bands (26, 28, 37 GHz) and at least 2x10MHz per operator in sub-GHz bands 600MHz and 700MHz.
The rollout of 5G has already been delayed considerably in India considerably. But the spectrum auctions coupled with the increased appetite for high-speed mobile networks may spell a boon for telcos in India this year.
According to industry body GSA, there are more than 85 commercial live 5G networks and 300 devices.
Telcos to prefer Open RAN over traditional architectures
The Open Radio Access Network (ORAN) technology which allows the disaggregation of hardware and software modules of a network, is expected to be the preferred mode of building networks in 2021 and beyond as telcos aim to cut Capex related costs and move towards an open vendors ecosystem
Airtel, for instance, partnered with US-based Altiostar to deploy the latter’s software-centric cloud-based architecture open vRAN solution to roll out vRAN based 4G and 5G services, applications, and use cases on its network.
Vodafone Idea also revealed that it is trialing OpenRAN trials with Mavenir, which also managed to poach the telco’s chief technology officer, Vishant Vora. Jio’s focus is to develop in-house capabilities to build 4G and 5G equipment and solutions in 2020 based on OpenRAN technology.
Wired broadband players will witness growth
The corona pandemic forced scores of employees to work from home, leading to an increased demand for broadband connectivity for work and entertainment. Consequently, smaller players increased their market share during the lockdown to 43.2% in August 2020 from 40.5% in April 2020, according to Motilal Oswal even as bigger rivals like Jio and Airtel continued to grow further.
Now, Jio and Airtel have 1.7 million and 2.7 million fixed broadband subscribers, respectively, as per Trai’s October data. BSNL and MTNL lost 0.07 million subscribers in October and took their total base to 8.3 million subscribers. On the other hand, ACT had 1.7 million wired broadband subscribers, while other smaller wired broadband players had a total 7.2 million subscribers in October, as per the data.
The battle among telcos and smaller internet service providers (ISP) will gain momentum in 2021. Even though telcos enjoy a larger chunk of mobile broadband subscribers, they are likely to face stiff competition from local and regional broadband providers.
New identity verification tech sans OTP in 1H21
Airtel, Vodafone Idea, and Jio are likely to verify user identities using the number of subscribers only on account of increasing password fatigue age groups, technical barriers, and to counter SIM mirroring fraud.
Subject to regulatory approvals, the feature would be made available publicly in 1H21. It is currently being piloted, ET had reported.
BSNL 4G launch
BSNL’s 4G launch is expected in 2021 and it has finally come out with a detailed notice inviting e-tender, for planning, testing, deployment, and annual maintenance of its much-awaited 4G network across four operational zones in addition to Delhi and Mumbai circles for 57,000 sites on a turnkey basis.
“BSNL intends to float a tender enquiry for planning, engineering, supply, installation, testing, commissioning and annual maintenance of 4G mobile network in north, east, west and south zones of BSNL, and Delhi and Mumbai LSA of MTNL on turnkey basis for tentative 57,000 4G sites along with associated elements,” the telco in a notice Fsaid on 1 January 2021.
The state-owned service provider further sought proposals through Expression of Interest (EoI) for prior registration or proof-of-concept (PoC) from Indian companies showing interest to participate in the bidding process.
The telecom department had last month extended BSNL’s Universal Access Service License (USAL) by 20 years by taking a bank guarantee of Rs 250 crore, in addition to approving the telco to manage and offer MTNL’s services in Delhi and Mumbai metro cities.
Following the issuance of the licence, the telco would be able to provide seamless 2G, 3G and 4G services across all telecom circles in the 900MHz, 1800MHz, 2100MHz and 2500 spectrum bands.
To help the two ailing state-owned telcos, Mahanagar Telephone Nigam Limited (MTNL) and Bharat Sanchar Nigam Limited (BSNL) overcome their long salary dues and meet the daily cash flow requirement, the government had introduced a Rs 69,000 crore four-step revival process on October 23, 2019. The steps were taken to help telecom carriers overcome financial stress.
BSNL had sought radio waves in the 2100 MHz spectrum for pan India operation except in the Rajasthan circle, while MTNL, which only operates in two metros, had asked for the 1800 MHz spectrum in Delhi and 2100 MHz in Mumbai.
Public WiFi to be available widely
The government recently launched its public WiFi project, called PM Wani, to drive penetration across the country. The simplified scheme will allow unlicensed entities, such as a ration shop, tea stall, among others, will now be able to provide public WiFi services by obtaining bandwidth from ISPs.
The project will not just increase broadband penetration in India but will also help telcos reduce capacity crunch on their networks through offloading resulting in better customer experience.
After shutting down 3G services in Chennai and Bengaluru, Vodafone Idea said it will follow suit and shut down its 3G services in Delhi on 15 January 2021. The telco’s move to switch off 3G comes after its bigger rival’s decision to refarm 3G spectrum for 4G services last year.
Both Vodafone Idea and Bharti Airtel will continue their respective 2G networks in India due to feature phone installed base. Mukesh Ambani, however, had asked the government to bring policies to phase out 2G services and migrate users to 4G networks. Jio is planning to bring its new JioPhone and affordable 4G smartphones to accelerate 4G adoption.