Out with the Old, In with the New

Key trends like BYOD, broadband, 4G, etc, are going to define the Indian telecom industry in 2012

Trend #1: BWA/4G Rollout: Wait and Watch

Sluggish adoption of third-generation mobile services and rising questions about return on investments in the country’s overcrowded telecom sector will push the launch of fourth-generation (Broadband Wireless Access) mobile services further into 2013.

Telecommunication Service Providers (TSPS) will continue to aggressively promote 3G services, build volumes, and stabilize returns during 2012 and use the learning before committing further resources to the as yet nascent 4G/BWA ecosystem. Specifically, the device and content pieces need to come together to make the go-to-market viable for the operators, and at the same time offer a compelling proposition to a user.

Trend #2: BYOD: A Gentle Progression

Today, multiple options of communication available to consumers (smartphones, media tablets, netbooks, and ultraportable PCS) are pushing enterprises to explore the possibility of adopting a Bring Your Own Device (BYOD) policy. Cybermedia Research believes that in 2012 BYOD as a concept will become more widespread among Indian enterprises; and the required network readiness would be put in place by the corporate technology heads to allow individuals to use a device of their choice, yet be a part of an enterprise mobility. Advantages that accrue from this approach would include lower capex spending by the organization, increased productivity, and more satisfied employees. However the adoption of a BYOD policy will require investments in strengthening the corporate network infrastructure and putting in place suitable governance and security framework.

Trend #3: Broadband Adoption in 2012: Significant Government Initiatives

The struggle between focus and attention will continue. On the one hand, govern-

ment’s focus on the development of the rural broadband infrastructure, either through fiber or by wireless methods, continues; on the other hand, vendors and operators will continue attending to the needs of the urban space, hence overcrowding it.

As per Trai, the current count of broadband (≥256 kbps) subscribers in India totalled 12.98 mn as of end October 2011, which includes fixedline and wireless subscribers. Starting 2003, with the launch of the first National e-governance Plan (NEGP), the Government of India as well as state governments have launched a broad range of initiatives, programs, and e-governance projects to bring services to people. The major ones can be summed up as those to shore up government IT infrastructure and build public service capacities: SWAN, SDC, MCA 21, CSCS, Passports Project of the Ministry of External Affairs, and so on. There are also those specifically aimed at the key segments of the population namely, youth, farmers, women, entrepreneurs, and government pensioners. A third and general category of projects aims to provide the most common government services to all categories of citizens, for instance, application for property ownership certificates, application for driving licenses, payment of utility bills, and so on.

As these programs are rolled out, often through the public-private partnership (PPP) mode, the total consumption of bandwidth by the government and allied services sector is expected to increase substantially in 2012. Specifically, broadband connectivity has been/is being provided under the following schemes:

Broadband in the Indian Village: Under the Government of India’s Bharat Nirman Program, broadband coverage is to be provided to all Gram Panchayats or Village Panchayats (VPS) by 2012. As of October 2011, nearly 140,000 of a total of 248,000 VPS have already been provided broadband connectivity. The government has approved creation of the National Optical Fibre Network (NOFN) for providing broadband connectivity to all panchayats. The cost of initial phase

Through the publicprivate partnership (PPP) mode, the total consumption of bandwidth by the government and allied services sector is expected to increase substantially in 2012

of the NOFN Scheme was pegged to be in the region of 20, 000 crore, with the proposed network under the scheme to be completed in 2 years.

Broadband in Colleges and Universities: As on October 31, 2011, 384 out of a total of 419 universities have been provided 1 Gbps connectivity and 13,371 out of a total of 28,616 colleges have been provided up to 10 Mbps connectivity under the National Mission on Education through ICT (NME-ICT) Scheme.

Trend #4: New M&A Norms: Impact on the India Telecom market

TSPS may adopt a circle-wise acquisition strategy, as the licenses have been awarded by circle. Cybermedia Research believes that there would be 6-7 telecom operators in each circle by the end 2012, while the rest would be acquired.

The current set of players are running out of options to grow profitably and have already sought to build synergies through sharing of networks and backhaul infrastructure. This was evident in tie-ups that resulted in the formation of tower firms such as Infratel.

The leading 6-7 players would stay on to battle it out for telecom subscribers and services revenues. However the merger and acquisition (M&A) guidelines are expected to stipulate that the merged entity in any circle should not have

For more related articles go to voicendata.com

market share in excess of 60% in terms of subscriber base and gross revenues. In such cases, both the Department of Telecommunications (DOT) and Trai would have to approve the proposed merger. In case the combined market shares of any 2 entities is less than 35%, then the DOT alone may grant approval to the merger, provided the resultant entity does not hold more than 25% of the total spectrum for the service area.

Trend #5:

Blurring the Gaps

Gaps between business/enterprise phone versus a consumer smartphone have blurred rapidly, and as things stand today are nearly indistinguishable. ‘New age’ smartphones have powerful, on-board processors (1.0 GHZ or higher, often dualcore) and are capable of running enterprise applications, while at the same time providing a great user experience.

While RIM’S Blackberry and Nokia’s E-series devices defined the quintessential ‘business phones’ until 2-3 years ago, many factors have led to a change in this dominance. Over the years with the growth of highly capable, feature-rich devices from vendors such as popularity Samsung, HTC, LG, Motorola, and others and based chiefly on the popularity of the Android and Windows Phone operating systems, a new category of ‘superphones’ have emerged. These devices have become ever more adaptable to use in enterprise environments by their ability to run CRM, sales order booking, and other industry vertical- and company- or firm-specific applications.

As per Cybermedia Research, in the first 10 months, ie, January-october 2011, a total of 109 new models of smartphones were launched in India. This is expected to further increase in CY12 as operators push 3G data services across an increasing number of cities and towns. The author is senior manager, telecommunications practice,

Cybermedia Research (With inputs from Tarun Pathak, analyst, telecommunications practice,

Cybermedia Research) vadmail@cybermedia.co.in