<div>As India moves towards the billion mark in active mobile subscribers, of which, nearly 60 per cent is in urban areas, there is a lot of ‘noise’ about the call quality of mobile phone calls. <br /><br />A mobile phone call is essentially defined by four quality parameters, call setup success rate, denoting the probability that the end-user can access the mobile telephony service when requested if it is offered; call setup time, denoting the time taken to establish the call since the time the user initiates the call; dropped call ratio, denoting the probability that a successful established attempt is ended unintentionally by either the calling or called party; and voice quality, denoting the clarity of voice, which is indicated by repeat calls within certain time period.<br /><br />In India, in the last three to five years, we have experienced a significant drop in the overall call quality, especially in metros and big towns. Dropped calls have become a regular feature, and many times having an uninterrupted five-minute conversation is a big challenge. Whilst in the past (prior to 2008), mobile operators used to get incremental spectrum as and when they added subscribers to their network, subsequently the increased usage of the network had to be met through either additional spectrum (which had to be acquired only through infrequent auctions till spectrum trading/sharing was allowed last year) or by adding additional towers, which entails additional capital and operating expenditure.<br /><br />The above reasons, along with the following significant developments have added to the underlying issue of poor call quality.<br /><br />First, due to tremendous growth of mobile data usage of over 70 per cent year on year, lot of network capacity dedicated to voice channels has been reconfigured for data purposes. This has reduced the overall voice capacity even though voice usage is still increasing albeit at a lower rate. It has resulted in congestion not only at peak times and high traffic areas, but overall level as well.<br /><br />Second, after the expiry of the initial 20 years of license duration, the government auctioned and reassigned the frequencies in metros and other cities. This resulted in re-configuration of mobile networks. and a period of transition that lasted few months. For example. in Delhi, the top two mobile operators lost some of their 900 Mhz frequencies and deployed 1,800 Mhz in lieu. This transition also necessitated the need of reconfiguring their networks and added to already deteriorating call drops scenario.<br /><br />Third, in recent years, due to exhaustive media coverage and increasing health consciousness, citizen activists and their housing societies raised the radiation issues and highlighted related health hazards due to proximity of mobile towers. This not only slowed down the tower deployment in congested areas due to delays in availability of permission to set up towers but in some cases active mobile towers were either closed down or moved to alternative locations. This contributed to network disruptions as well.<br />All these factors accelerated and amplified the network congestion and resulted in ensuing network quality challenges.<br /><br />Some steps in the direction<br /><br />In the recent past, Government of India (GoI) has taken some concrete steps to improve the supply situation, both in terms of spectrum availability and tower infrastructure. It has been conducting spectrum auctions at regular intervals, and all the available spectrum is transparently disclosed and made available. It has also allowed spectrum trading and sharing, so that operators can optimise the spectrum which is already allotted to them in the past. Further, in order to allay the health concerns around mobile radiation, the Telecom Minister announced that fears of mobile towers being hazardous to health were untrue, adding that reports from the World Health Organisation did not substantiate the claim. This announcement was augmented by allowing access to government buildings for deploying mobile towers.<br /><br />From the mobile operators perspective, it was combination of factors, such as not fully anticipating the gravity of the situation exacerbated by the shift in network usage patterns and therefore not adequately investing in their networks. Stretched balance sheets of the operators have also contributed to the same. Adopting a reactive and piecemeal approach focused more on highlighting industry financial issues rather than tactically showcasing constraints from a customer benefit and experience point of view. Also, apart from the concrete steps taken by GoI in the past couple of years, mobile operators in India have largely been operating in a very uncertain regulatory environment with very little clarity on both timing and outcome of critical issues impacting the sector. <br /><br />Consequently, mobile customers in India have been a harried lot, but have played along in the absence of better quality alternatives. Going forward, situation is likely to improve, post deployment of all the spectrum, both already auctioned and being auctioned.<br /><br />Initiative from the private sector<br /><br />Additionally, mobile operators will have to proactively invest in their network infrastructure, with the knowledge that the pent-up demand for data for billion plus subscribers armed with their affordable smartphones, will need continued attention to root cause the network issues and improve network performance, create robust backhauls and identify and implement technology solutions that can help handle data traffic beyond traditional mobile network approach.<br /><br />It is expected that Government of India, on its part will continue to be supportive by taking concrete and time bound steps to remove bottlenecks of network deployment and will continue to bring in enabling legislation in the interest of customer and attracting investments. This sector needs to be recognised for its multiplier effect and the transformational impact on the overall economy.<br /><br />We watch this year 2016, with anticipation of fulfillment of the twin promise to the Indian customer of high speed seamless data access and uninterrupted voice connectivity!<br /><br />Key performance indicators of Indian telcos<br /><br />Parameters FY10 FY11 FY12 FY13 Comments/Notes<br />Sector Financial KPIs (INR bn) Actual Actual Actual Projections<br />Gross revenues 1,580 1,713 1,825 2,048<br />Adjusted gross revenues 1,168 1,216 1,346 1,413<br />License fees 98 100 112 117 8% of AGR<br />License fee as a % of AGR 8% 8% 8% 8%<br />Spectrum charge 34 39 48 52 4% of AGR<br />Spectrum charges as a % of AGR 3% 3% 4% 4%<br />Industry Debt 1,238 1,600 1,857 2,794 PWC Analysis<br />VAS (Non Voice) Revenues (INR bn) 140 152 175 191<br />Wireless Segment Financial KPIs (INR bn)<br />Gross revenues 969 1,022 1,185 1,351 FY10 and FY11 — Voice&Data<br />Adjusted gross revenues 716 726 874 932 Based on pass-through for sector<br />Licence fees 60 60 73 77 8% of AGR<br />Spectrum charge 21 23 32 34 4% of AGR<br /><br /><em>(The author is Partner, Leader — Telecom at PwC India with contribution from Neeraj Katariya)</em></div>
<div>As India moves towards the billion mark in active mobile subscribers, of which, nearly 60 per cent is in urban areas, there is a lot of ‘noise’ about the call quality of mobile phone calls. <br /><br />A mobile phone call is essentially defined by four quality parameters, call setup success rate, denoting the probability that the end-user can access the mobile telephony service when requested if it is offered; call setup time, denoting the time taken to establish the call since the time the user initiates the call; dropped call ratio, denoting the probability that a successful established attempt is ended unintentionally by either the calling or called party; and voice quality, denoting the clarity of voice, which is indicated by repeat calls within certain time period.<br /><br />In India, in the last three to five years, we have experienced a significant drop in the overall call quality, especially in metros and big towns. Dropped calls have become a regular feature, and many times having an uninterrupted five-minute conversation is a big challenge. Whilst in the past (prior to 2008), mobile operators used to get incremental spectrum as and when they added subscribers to their network, subsequently the increased usage of the network had to be met through either additional spectrum (which had to be acquired only through infrequent auctions till spectrum trading/sharing was allowed last year) or by adding additional towers, which entails additional capital and operating expenditure.<br /><br />The above reasons, along with the following significant developments have added to the underlying issue of poor call quality.<br /><br />First, due to tremendous growth of mobile data usage of over 70 per cent year on year, lot of network capacity dedicated to voice channels has been reconfigured for data purposes. This has reduced the overall voice capacity even though voice usage is still increasing albeit at a lower rate. It has resulted in congestion not only at peak times and high traffic areas, but overall level as well.<br /><br />Second, after the expiry of the initial 20 years of license duration, the government auctioned and reassigned the frequencies in metros and other cities. This resulted in re-configuration of mobile networks. and a period of transition that lasted few months. For example. in Delhi, the top two mobile operators lost some of their 900 Mhz frequencies and deployed 1,800 Mhz in lieu. This transition also necessitated the need of reconfiguring their networks and added to already deteriorating call drops scenario.<br /><br />Third, in recent years, due to exhaustive media coverage and increasing health consciousness, citizen activists and their housing societies raised the radiation issues and highlighted related health hazards due to proximity of mobile towers. This not only slowed down the tower deployment in congested areas due to delays in availability of permission to set up towers but in some cases active mobile towers were either closed down or moved to alternative locations. This contributed to network disruptions as well.<br />All these factors accelerated and amplified the network congestion and resulted in ensuing network quality challenges.<br /><br />Some steps in the direction<br /><br />In the recent past, Government of India (GoI) has taken some concrete steps to improve the supply situation, both in terms of spectrum availability and tower infrastructure. It has been conducting spectrum auctions at regular intervals, and all the available spectrum is transparently disclosed and made available. It has also allowed spectrum trading and sharing, so that operators can optimise the spectrum which is already allotted to them in the past. Further, in order to allay the health concerns around mobile radiation, the Telecom Minister announced that fears of mobile towers being hazardous to health were untrue, adding that reports from the World Health Organisation did not substantiate the claim. This announcement was augmented by allowing access to government buildings for deploying mobile towers.<br /><br />From the mobile operators perspective, it was combination of factors, such as not fully anticipating the gravity of the situation exacerbated by the shift in network usage patterns and therefore not adequately investing in their networks. Stretched balance sheets of the operators have also contributed to the same. Adopting a reactive and piecemeal approach focused more on highlighting industry financial issues rather than tactically showcasing constraints from a customer benefit and experience point of view. Also, apart from the concrete steps taken by GoI in the past couple of years, mobile operators in India have largely been operating in a very uncertain regulatory environment with very little clarity on both timing and outcome of critical issues impacting the sector. <br /><br />Consequently, mobile customers in India have been a harried lot, but have played along in the absence of better quality alternatives. Going forward, situation is likely to improve, post deployment of all the spectrum, both already auctioned and being auctioned.<br /><br />Initiative from the private sector<br /><br />Additionally, mobile operators will have to proactively invest in their network infrastructure, with the knowledge that the pent-up demand for data for billion plus subscribers armed with their affordable smartphones, will need continued attention to root cause the network issues and improve network performance, create robust backhauls and identify and implement technology solutions that can help handle data traffic beyond traditional mobile network approach.<br /><br />It is expected that Government of India, on its part will continue to be supportive by taking concrete and time bound steps to remove bottlenecks of network deployment and will continue to bring in enabling legislation in the interest of customer and attracting investments. This sector needs to be recognised for its multiplier effect and the transformational impact on the overall economy.<br /><br />We watch this year 2016, with anticipation of fulfillment of the twin promise to the Indian customer of high speed seamless data access and uninterrupted voice connectivity!<br /><br />Key performance indicators of Indian telcos<br /><br />Parameters FY10 FY11 FY12 FY13 Comments/Notes<br />Sector Financial KPIs (INR bn) Actual Actual Actual Projections<br />Gross revenues 1,580 1,713 1,825 2,048<br />Adjusted gross revenues 1,168 1,216 1,346 1,413<br />License fees 98 100 112 117 8% of AGR<br />License fee as a % of AGR 8% 8% 8% 8%<br />Spectrum charge 34 39 48 52 4% of AGR<br />Spectrum charges as a % of AGR 3% 3% 4% 4%<br />Industry Debt 1,238 1,600 1,857 2,794 PWC Analysis<br />VAS (Non Voice) Revenues (INR bn) 140 152 175 191<br />Wireless Segment Financial KPIs (INR bn)<br />Gross revenues 969 1,022 1,185 1,351 FY10 and FY11 — Voice&Data<br />Adjusted gross revenues 716 726 874 932 Based on pass-through for sector<br />Licence fees 60 60 73 77 8% of AGR<br />Spectrum charge 21 23 32 34 4% of AGR<br /><br /><em>(The author is Partner, Leader — Telecom at PwC India with contribution from Neeraj Katariya)</em></div>
