Data for Consolidation
A closed interaction with India’s top telecom operators last month was very interesting for us. And actually gave us an idea of what all is going behind the scenes as our country’s telecom sector embarks on the next phase - from voice to data.
India has today almost 100 million phone users. And they are not just talking but they are doing much more. When they get up in the morning they rush to their phones for surfing the internet, network on Whatsapp, Facebook and Twitter, and download pictures and videos. Later many of they run their office on the phone, order groceries and books from Amazn and Snapdeal, clear payments, and book tickets. These are from an 8 year old school kid to an 80 year old grandma. And they fret and fume if speed is slow, or the connection drops. And most of them think all this is available for free. The result is that the networks are choked. And the declining quality of service is for everybody to see. Just imagine what will happen when Digital India and all the smart cities take off.
Everybody believes and rightly so, that the solution to get out of this mess and more than that to start making money from data boom is to become a digital service provider. This means that traditional telcos and their networks, processes, people, and offerings were voice focused. And they will need to overhaul everything. Technology vendors think this is easy and have global case studies to prove their point. Indian vendors see it as a Herculean job, not possible in the midst of the resource crunch and daily firefighting that they have been sucked into.
Operators don’t know what to do. They view this huge data and video surge as a big big revenue opportunity but are not sure if they are geared to be able monetize it. The existing networks - which is a mix of technologies were built over years, are layered, complicated, and often from multiple vendors - are not smart and intelligent enough to tap this new business. And new technologies that will make monetization possible will need significant investments.
On top of that, technologies are changing so rapidly - 3G, 4G, LTE, 5G and now all this on the cloud that the telcos don’t know what is the life of their investments. Beyond new technology solutions, there are other bottlenecks too, some of them beyond the control of the operators - data growth also depends on factors like the back-haul capacity, spectrum availability, OTT landscape, and so on.
This is clearly not a case of ‘technology for business or business for technology’. The business is there, staring the operators in the face.
We have been hearing about consolidation in telecom for a long time. Perhaps, the industry is once again at a threshold when consolidations become the only option because data, video, and services will be the hen that lays golden eggs. Whoever ignores this hen is heading for big trouble. Obviously, the transition from traditional telco to a DSP will not be easy. Only those players with commitment, vision, business and tech leadership, and most importantly deep pockets will be able transform themselves into digital telcos. For the rest, time will tell.
<ibrahima@cybermedia.co.in>