<p>The Indian telecom services business ecosystem is witnessing one of its most exciting times with the acquisition of spectrum in the 4G /LTE space. Many telecom experts say this is the beginning of large scale consolidation in the telecom services industry. <br /><br /></p>.<p>It is COAI’s (Cellular Operators Association of India) consistent view and contention that the competition across various technology spaces and across spectrum bands is likely to not just intensify, but in essence will set the tone for better quality of services and a large portfolio of services that will benefit the end consumer.<br /><br />The telecom industry and COAI believe that the onset and adoption of 4G technology will be rapid and that this particular space will set the trajectory for the future of mobile telephony in the coming months and years.<br /><br />Airtel’s acquisition of airwaves from Aircel and Videocon is indicative of how serious the larger and long term players of the industry view the future—which is manifested in the large scale investments that all major 4G players, including Airtel, Reliance, Vodafone and Idea are making to grow their coverage map and ensure a footprint that provides customers with a consistent and high quality 4G services ecosystem.<br /><br />The increase in adoption of 4G/ LTE/ Broadband is also evident from the fact that the total addressable market for the mobile broadband in India is projected or slated to increase from 720 million in 2015 to 879 million in 2020.<br /><br />Pan-India presence <br />In terms of area covered under 4G, Reliance Jio has suggested that it has already achieved a reach of 121,729 as of February 2016, and now with Airtel’s acquisition of additional spectrum, it is expected that it would secure pan-India presence, thereby ensuring that consumers will have the best from both operators going forward. <br /><br />The Indian telecom services sector is making a move worldwide towards 4G, and handset manufacturers are making mobile phones that are specially designed for 4G optimisation. In fact, some operators have also made the foray into manufacturing handsets to maximise the potential India has to offer. <br /><br />We have already seen how Reliance Jio, with its soft launch of its 4G services has combined by launching its own home grown brand of handsets hoping to utilize what the industry envisages to be a very large potential market of 4G/LTE /VoLTE consumers. The industry and market experts anticipate a major dynamic shift once all operators who have invested in the 4G space roll commercial operations in their respective licensed circles and areas.<br /><br />The future of 4G<br />In the early years of the last decade 3GPP (3rd Generation Partnership Project) started working on new technologies to improve speeds (spectral efficiencies) beyond what was capable on 3G. The key decision to be taken was whether the new technology should build upon the existing 2G/3G building blocks (backward compatible), or be developed from scratch without any historical baggage. It was decided that both approaches had their merit and hence two parallel streams within 3GPP started working on the new technologies.<br /><br />n Stream 1: Technology that needed to be backward compatible (HSDPA/HSPA):<br />This technology has to co-exist with the same building blocks of 2G/3G, in keeping with GSM’s principle of backward compatibility. This basically means that the new technology/base stations should provide new services and faster speeds, but at the same time also support older handsets.<br />The advantage of insisting on backward compatibility is that there is a ready subscriber base to bear the cost of development and deployment of new technology.<br /><br />The disadvantage, however, is that one cannot bring in radically new concepts that could give quantum leaps in performance. For instance, HSPA has to work on spectrum blocks of 5MHz only (or multiples thereof) because this is how 3G works. This becomes quite restrictive with increasingly fragmented spectrum allocations world over. <br /><br />The first standards for HSPA for downlink (HSDPA) got finalised by 3GPP in 2002 (Release 5), and promised download speeds of 14 Mbps. Enhancements to the uplink were added in 2005 (Release 6), with upload speeds of up to 6 Mbps. These are informally called 3.5G.<br /><br />n Stream 2: Technology with no historical baggage— Developed from scratch (LTE):<br />This technology is free to pick and choose the best that 2G/3G had to offer but there was no restriction on backward compatibility. In other words, everything from network architecture to user equipment could be designed from scratch to incorporate the latest available concepts.<br /><br /> The drawback of this approach is that one has to wait for the entire ecosystem to develop before becoming commercially viable. Even the process of finalizing LTE standards took a lot of time. By the time the first LTE standard was finalized by 3GPP in 2007, there were already 150+ commercial 3.5G networks worldwide!<br /><br />Some detractors argue that there are far too fewer 4G consumer subscriptions currently for telcos to provide an enhanced bouquet of services and protest that the investments made in the recent past must be realized in terms of return and that price competitiveness should not become the sole consideration to stay alive in the marketplace. <br /><br />Ovum Research has predicted that the 4G LTE technology will continue to grow and accelerate at a rapid pace from its base of more than 600 million total subscriptions worldwide as of Q1 2015 to one billion LTE connections in 2016 and further increase to 2.5 billion by year-end 2019. In India, it is anticipated that with the launch of 4G services across India, the 4G subscriber base is expected to have grown to about 15 million as per Price WaterhouseCoopers (PwC). <br /><br />There is no doubt that 4G is disruptive. The technology has changed the way mobile services are perceived, being seen as a provider of basic voice services to one that is predominantly data-driven.<br /> <br />Over a third of the world’s population is expected to be covered by 4G-LTE networks, and this number is likely to accelerate as is the number of operators that provide 4G services. As the fastest growing mobile user people in the world today, India cannot afford to be immune to this move. We need to catch — and overtake — countries that have beaten us to the rollout of this service. Telcos are aware of this more than anyone else, and as recent signs have shown, efforts are being made in this direction.<br /><br />However, a note of caution here. India is far behind most countries, even smaller ones, in the spectrum made available for mobile services and although the impending auctions will address some of that, yet a lot is still to be done in terms of optimisation. Contiguous spectrum continues to be a challenge as seamless mobility demands spectrum that is uninterrupted. The move to 4G will require substantially large investments for it to be successful, and while competition will ensure these investments are made, the industry will also get a huge fillip with availability of more spectrum.<br /><br />(The author is the Director General of Cellular Operators Association of India)</p>
<p>The Indian telecom services business ecosystem is witnessing one of its most exciting times with the acquisition of spectrum in the 4G /LTE space. Many telecom experts say this is the beginning of large scale consolidation in the telecom services industry. <br /><br /></p>.<p>It is COAI’s (Cellular Operators Association of India) consistent view and contention that the competition across various technology spaces and across spectrum bands is likely to not just intensify, but in essence will set the tone for better quality of services and a large portfolio of services that will benefit the end consumer.<br /><br />The telecom industry and COAI believe that the onset and adoption of 4G technology will be rapid and that this particular space will set the trajectory for the future of mobile telephony in the coming months and years.<br /><br />Airtel’s acquisition of airwaves from Aircel and Videocon is indicative of how serious the larger and long term players of the industry view the future—which is manifested in the large scale investments that all major 4G players, including Airtel, Reliance, Vodafone and Idea are making to grow their coverage map and ensure a footprint that provides customers with a consistent and high quality 4G services ecosystem.<br /><br />The increase in adoption of 4G/ LTE/ Broadband is also evident from the fact that the total addressable market for the mobile broadband in India is projected or slated to increase from 720 million in 2015 to 879 million in 2020.<br /><br />Pan-India presence <br />In terms of area covered under 4G, Reliance Jio has suggested that it has already achieved a reach of 121,729 as of February 2016, and now with Airtel’s acquisition of additional spectrum, it is expected that it would secure pan-India presence, thereby ensuring that consumers will have the best from both operators going forward. <br /><br />The Indian telecom services sector is making a move worldwide towards 4G, and handset manufacturers are making mobile phones that are specially designed for 4G optimisation. In fact, some operators have also made the foray into manufacturing handsets to maximise the potential India has to offer. <br /><br />We have already seen how Reliance Jio, with its soft launch of its 4G services has combined by launching its own home grown brand of handsets hoping to utilize what the industry envisages to be a very large potential market of 4G/LTE /VoLTE consumers. The industry and market experts anticipate a major dynamic shift once all operators who have invested in the 4G space roll commercial operations in their respective licensed circles and areas.<br /><br />The future of 4G<br />In the early years of the last decade 3GPP (3rd Generation Partnership Project) started working on new technologies to improve speeds (spectral efficiencies) beyond what was capable on 3G. The key decision to be taken was whether the new technology should build upon the existing 2G/3G building blocks (backward compatible), or be developed from scratch without any historical baggage. It was decided that both approaches had their merit and hence two parallel streams within 3GPP started working on the new technologies.<br /><br />n Stream 1: Technology that needed to be backward compatible (HSDPA/HSPA):<br />This technology has to co-exist with the same building blocks of 2G/3G, in keeping with GSM’s principle of backward compatibility. This basically means that the new technology/base stations should provide new services and faster speeds, but at the same time also support older handsets.<br />The advantage of insisting on backward compatibility is that there is a ready subscriber base to bear the cost of development and deployment of new technology.<br /><br />The disadvantage, however, is that one cannot bring in radically new concepts that could give quantum leaps in performance. For instance, HSPA has to work on spectrum blocks of 5MHz only (or multiples thereof) because this is how 3G works. This becomes quite restrictive with increasingly fragmented spectrum allocations world over. <br /><br />The first standards for HSPA for downlink (HSDPA) got finalised by 3GPP in 2002 (Release 5), and promised download speeds of 14 Mbps. Enhancements to the uplink were added in 2005 (Release 6), with upload speeds of up to 6 Mbps. These are informally called 3.5G.<br /><br />n Stream 2: Technology with no historical baggage— Developed from scratch (LTE):<br />This technology is free to pick and choose the best that 2G/3G had to offer but there was no restriction on backward compatibility. In other words, everything from network architecture to user equipment could be designed from scratch to incorporate the latest available concepts.<br /><br /> The drawback of this approach is that one has to wait for the entire ecosystem to develop before becoming commercially viable. Even the process of finalizing LTE standards took a lot of time. By the time the first LTE standard was finalized by 3GPP in 2007, there were already 150+ commercial 3.5G networks worldwide!<br /><br />Some detractors argue that there are far too fewer 4G consumer subscriptions currently for telcos to provide an enhanced bouquet of services and protest that the investments made in the recent past must be realized in terms of return and that price competitiveness should not become the sole consideration to stay alive in the marketplace. <br /><br />Ovum Research has predicted that the 4G LTE technology will continue to grow and accelerate at a rapid pace from its base of more than 600 million total subscriptions worldwide as of Q1 2015 to one billion LTE connections in 2016 and further increase to 2.5 billion by year-end 2019. In India, it is anticipated that with the launch of 4G services across India, the 4G subscriber base is expected to have grown to about 15 million as per Price WaterhouseCoopers (PwC). <br /><br />There is no doubt that 4G is disruptive. The technology has changed the way mobile services are perceived, being seen as a provider of basic voice services to one that is predominantly data-driven.<br /> <br />Over a third of the world’s population is expected to be covered by 4G-LTE networks, and this number is likely to accelerate as is the number of operators that provide 4G services. As the fastest growing mobile user people in the world today, India cannot afford to be immune to this move. We need to catch — and overtake — countries that have beaten us to the rollout of this service. Telcos are aware of this more than anyone else, and as recent signs have shown, efforts are being made in this direction.<br /><br />However, a note of caution here. India is far behind most countries, even smaller ones, in the spectrum made available for mobile services and although the impending auctions will address some of that, yet a lot is still to be done in terms of optimisation. Contiguous spectrum continues to be a challenge as seamless mobility demands spectrum that is uninterrupted. The move to 4G will require substantially large investments for it to be successful, and while competition will ensure these investments are made, the industry will also get a huge fillip with availability of more spectrum.<br /><br />(The author is the Director General of Cellular Operators Association of India)</p>
