SINGAPORE and SYDNEY -- India's new national digital communication policy (NDCP) could benefit the sector by making it easier to meet rapidly rising data demand and addressing tax and fee burdens on the industry, says Fitch Ratings.
The NDCP's plan to expand broadband coverage funded by the universal service obligation fund and in partnership with private telcos is likely to support private telcos' growth, as it will broaden the customer base and improve Internet adoption, particularly in rural areas, according to Fitch Ratings.
The NDCP lays out plans to connect 600,000 villages to the broadband network, establish 2 million WiFi hotspots in rural areas and another 1 million in urban areas. There will be implementation challenges, but the development of this infrastructure could significantly increase the country's broadband adoption rate, which is currently in the low single digits in rural areas. The policy aims to considerably expand fiber coverage and also to increase the proportion of towers connected through fiber optics to 60% from 25% to accelerate the adoption of 4G/5G technologies.
Private telcos also will benefit from NDCP's plan to encourage more efficient spectrum usage, by making available harmonized and contiguous spectrum bands and further liberalizing spectrum sharing and trading.
Accelerated 5G deployment, increased spectrum supply and harmonization help telcos keep up with growth in data usage -- after all, the average monthly data usage per customer rose to between 6Gbp/s and 8Gbp/s in 2018, from about 1Gbp/s only 12 months prior. However, the plan is likely to encourage companies to increase investment in 5G spectrum which, depending on the 5G spectrum asset price, could further stretch already heavily indebted balance sheets over the next two years. We believe private telcos could skip 5G spectrum auctions if prices are too high.
The NDCP's plans to review and rationalize the sector's tax structure and optimize future spectrum asset pricing could reduce telcos' costs and red tape. Indian telcos face heavy and multiple taxes -- including license fees, spectrum usage charges, and universal service fees on top of expensive spectrum assets. Meanwhile, intense competition has limited telcos' pricing power. Overall, these pressures have stretched balance sheets. The sector has also been subject to frequent litigation due to high taxes, which CSPs currently dispute.
We expect price competition to ease in the medium term following the emergence of three large telcos -- Bharti, Reliance Jio and the merged entity of Vodafone-Idea, which have an estimated combined revenue market share of more than 90%. Fierce price competition following Jio's entry into the market significantly hurt telcos' financial profiles, which led to rapid consolidation and the exit of smaller operators.
Ex-pat Alison Diana finds some Brits focused on improving the country's pretty abysmal service since it's something they can control — unlike Brexit, Theresa May's future, Parliamentary games or anything else to do with the relationship between the EU and UK.
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Wednesday, December 12, 2018 12 p.m. New York / 5 p.m. London
Alexa, What's This New Opportunity for Service Providers? (archive available soon)
Consumers are buying millions of IoT devices, from smart thermostats and security systems to intelligent entertainment setups and furniture. Yet many of these devices remain isolated because home users are uncomfortable connecting them to each other – or even their WiFi. After all, their WiFi network was probably designed only to handle a few laptops, a gaming system and a couple of smartphones. Now, demand on the network is surging and even though you're delivering 100 Mbps to 1 Gbps, that doesn't necessarily mean the broadband power is in the right place or reaches every corner of a home.
Even if WiFi coverage is sufficient, typing is not on trend. Voice is far more natural, easier and faster. Using a TV keyboard is archaic when more and more households have access to cloud-based voice services, like Amazon Alexa. This webinar will explore how service providers can create a comfortable, truly smart home for consumers – simultaneously driving up margin and loyalty.
Tune in to Broadband World News Radio on Thursday, November 1 at 8 a.m. PT, 11 a.m. ET, 3 p.m. UK as Ronan Kelly, CTO, EMEA & APAC Regions at ADTRAN, explores the five pillars of network integrity -- a topic he discussed during his recent Broadband World Forum keynote. Register now!