+ Digital Reset Touching a Billion Indians - CII Blog

The Indian telecommunication industry’s ecosystem has transformed over the last few years. It has come a long way from the traditional landlines to future ready 5G. In the past two decades, we witnessed how telecommunication connected people by penetrating the most remote locations, which in turn has started to change the lives of a billion Indians. From phone applications to home automation to cashless commerce, digital disruption is the new normal for consumers Affordability of services has always been a dominating factor for telecommunication adoption in India. Today such services are within the economic reach of customers. This transformation had a positive impact on customer experience as well. With new technological advancements, majority of services can be delivered virtually.

Evolution of telecommunication capabilities also fuelled digitised transformation of industries such as gaming, banking, healthcare, education, e-commerce, entertainment, manufacturing, fintech, real estate, and automobile. This push has been driven by a model where the telecommunication sector has become the connectivity backbone for other industries. These sectors restructured their business models as the technology evolved and developed digitised revenue portfolios. In India, internet consumption has increased across youth, lower socio-economic classes, female population, tier-2 cities, tier-3 cities, and the rural sector. New untapped customer segments and markets have unlocked for operators to create customised solutions and promote internet adoption through collaborations with government and other solution providers. 

Digital transformation requires ultra-low latency and high transmission speed which is expected to be enabled by technologies such as satellite broadband communication (Satcom). Satcom will also enable massive machine type communication (mMTC) amongst IoT devices. The upcoming 5G mobile network will be the technology to provide broader coverage across borders. As 5G architecture needs significant investments, adoption of enablers such as Open Radio Access Network (ORAN), cloud computing, and edge computing will help operators reduce capital expenditure and optimise network throughput. 

As we move towards an era of internet enabled machines and seamless connectivity, private networks are expected to witness a huge demand from enterprises in the near future. This will be driven by requirement of security and high-speed connectivity within their operating environment. 

In the future, enterprises will use IoT to cater diversified customer needs. This will also help manage enterprise operations, optimise costs, and reduce human interference. Advancements in technology and data management go hand in hand. Hence, managing data is imperative for organisations. Cloud computing shall offer tailored products for data storage and facilitate business operations by integrating devices online without owning physical assets.

Artificial Intelligence and Machine Learning (AI/ML) will play an instrumental role in deriving a meaningful output with real-time reporting, problem solving, and decision-making capabilities. Agile decision-making shall be supported by Virtual Reality (VR), which will allow users to have a real-life experience of taking on-ground business decisions. IoT’s strong push will also enable machine-to-machine communication that requires information and data transfer at very high speed with low latency within a secure operating environment. Edge computing will manage these hindrances by processing the data close to the source and encrypting before transfer amongst nodes. 

In the upcoming 5G era, blockchain is another technology that will be critical for Indian telecommunication operators. It will help solve long-standing issues (such as identity management, frauds, and SLA monitoring for the industry) that will drive growth and enhance revenues. Digital transformation has led to rapid evolution in terms of urban infrastructure. Smart cities are not just a futuristic concept or a pipe dream. A smart city framework predominantly comprises Information and Communication Technologies (ICT). ICT is responsible for developing, deploying, and promoting sustainable development practices in response to growing urbanisation challenges. Telecommunication services are expected to be the nucleus for achieving infrastructure transformation in both the urban and rural areas.

The Government of India (GOI) has played a significant role in supporting these technologies to foster and digitise the domestic market. GOI has time and again stepped in, to support the cash-strapped telecommunication sector. On the back of its past decisions and larger goal of building a digital India, the government has announced critical structural and procedural reforms. The definition of Adjusted Gross Revenue (AGR) has been rationalised and the recently announced four-year moratorium on AGR payment will ease the liquidity stress of telecommunication companies. 

These reforms will pave the way for 5G auctions. GOI has also removed penalties and reduced interest rates and bank guarantee requirements to enable the sector to attract more Foreign Direct Investment (FDI) for advancements. GOI has also come up with Private Partnership Models (PPP) to connect gram panchayats with internet across India. As ‘Make in India’ continues to gain momentum, the government is also promoting local manufacturing of network equipment by providing incentives to manufacturers.

As the telecommunication industry becomes the key driver of industry-wide convergence, new revenue streams (leveraging industry-wide collaborations) have opened for TSPs to bank upon. In India, the entertainment sector is the primary consumer of the internet. Demand for OTT and gaming is rising exponentially, giving telecommunication providers an opportunity to collaborate with such industries or develop products indigenously. Growth of OTT platforms and gaming industry will receive a thrust due to high-speed broadband and AGR definition rationalisation.

The next few years will witness new business models and thereby new alliances will emerge between the telecommunication service providers and content providers. Digital Media advertising spends will surpass the conventional media expenditure due to the rise of on demand content enterprises are expected to bring in a major share of revenue with the emergence of 5G technology. Internet usage pattern varies across demographics, hence customised solutions should be designed to promote internet adoption within a niche and untapped consumer segment based on their needs and aspirations. 

Telecommunication operators understand the digitisation opportunity that they have in hand. The game-changing technology revolution has started, and multiple industries are about to witness this journey. The telecommunication sector must continue to build capabilities and act as the backbone in shaping the Indian economy. It will play a key role in bringing the change in the economy with larger alliances and broad basing the telecommunication ecosystem.

Read the full report ‘Digital Reset Touching a billion Indians’ at https://bit.ly/3rRAC3y