Seite 2: Barnacles That Can Slow The Boa

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Challenges remain. The rural market penetration with telephone services is still at 58 percent. Telecom-analyst Gupta explains, that privately owned mobile 4G networks (Jio, Airtel) reach almost 99 percent of India's population. The remaining gaps persist because they are in the remotest villages and mountain regions of India.

Indian operators have been criticised for focusing too much on cities. A lot here depends on the different network they are deploying, i.e. 4G or 5G. "If we look at the private telcos, earlier, they were mostly concerned about providing telecom services mainly in towns and cities in India, as most of their revenue, mainly data revenue, would be generated from these places", says Gupta. But, he adds, the federal government is working on closing this digital-divide and has forced private telcos and BSNL itself to develop telecom infrastwructure in remote areas.

Partial nationalization rescues Vodafone Idea

Meanwhile, Vodafone Idea (VI) faces obstacles in its pursuit of 5G due to financial challenges, causing it to fall behind, turning India’s 5G race into a two-horse battle Between Airtel and Jio. During the price war, VI lost a number of subscribers, which lead to lower revenues. As a result, VI could not invest as much in their network, again leading to subscriber churn.

There are also doubts on the government's bail-out choice for some operators. VI is a debt-ridden operator, Gupta points out. "So, on the very early half of 2023, the Indian government decided to help VI by allowing it to convert interest on license fees owed to the government into equity." As a result, the government now owns more than a third of the telco. This move, Gupta argues, saved VI from going bankrupt: "It was crucial for network modernization and to stop the high churn rate." The move also protected competition; without VI, Airtel and Jio would have enjoyed a lot of market power.

Other issues in India include limited availability of reliable electricity, inadequate fibre-optic connectivity, insufficient network coverage, abrupt fibre cuts during lay-outs, and strong competition resulting in reduced profit margins combined with high capital expenditure requirements for infrastructure deployment and upgrades as well as spectrum acquisition. Here, as Gupta reasons, the launch of a national optical fibre network (BharatNet project) in 2012 is also going to be fruitful. "As of May 2023, 634,782 km of fibre has been laid, thereby, connecting 203,211 gram panchayats." (Gram panchayats are local districts, of which India has about 250,000.)

With 5G arriving in more cities, a lot will change. Incidentally, Opensignal's recent 5G analysis spotted that users across India are experiencing huge uplifts in experience with 5G compared to 4G. As per Omdia estimates, 5G mobile subscribers could grow to 893 million by 2028's end. Ericsson estimates 700 million, which still makes India the fastest growing 5G market in the world.

The Lighthouse Ahead

India has a huge population base – this "demographic billionaire" has recently become the most populous country on Earth. So it is a massive market. As Gupta reminds, "Policies like spectrum auctions, the National Digital Communications Policy, and the introduction of the Unified License have facilitated industry growth, improved service quality, and encouraged innovation." (Unified licenses allow telco operators to provide wireless and wireline services under a single licensing scheme.)

There are also glimpses of satellite telephony, Private LTE etc. If a Dr. Who were to descend in India now and take an average user to sometime ahead in the future, the view could show endless fibre, satellites, VR headsets and TARDIS defining connectivity there. Who knows! India always surprises. Didn't Dr. Who say: "There’s always something to look at if you open your eyes!"

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