Category: Blogs

September 2021 in telecoms: it’s all about networks!

In this edition of CURATED, we look at the latest energy efficiency efforts from operators and the progress they have made. We also look at how network sunsets are helping operators with their energy efficiency goals in addition to supporting newer technology launches.

GSMA Intelligence takes on green transformation and the network sunset developments of operators

In recent years, the ESG (Environmental, Social, and Governance) agenda has made its way to the top of the list of priorities for most organisations. Unsurprisingly, the question of “how” organisations can support efforts to tackle climate change sits at the centre of many of these ESG discussions and has driven the mobile industry to be one of the first to align itself with the goals of the 2015 Paris Climate Agreement.

In this edition of CURATED, we look at the latest energy efficiency efforts from operators and the progress they have made. We also look at how network sunsets are helping operators with their energy efficiency goals in addition to supporting newer technology launches.

Green transformation: The way forward

Did you know?

In February 2019, the GSMA board, on behalf of the entire industry, set an ambition for the mobile industry to reach net zero carbon emissions by 2050 at the latest (Read the details here). This ambition has been supported by the launch of science-based pathway and milestone targets, with step-by-step guidance for operators to align their carbon reduction targets to the pathway.

This spurred a clear commitment from the industry; as of April 2021, operators representing 65% of the mobile market (by revenues) have committed to science-based targets for carbon reductions and net zero emissions. This is also echoed in our operator survey results: more than 50% of operators surveyed identified sustainability/energy efficiency as extremely important and one of the top network transformation priorities. (Source: Network Transformation survey 2021)

Against this backdrop, operators are identifying and adopting numerous energy efficiency measures such as use of renewable energy sources, infrastructure level improvements like new lithium-ion batteries, AI enabled sleep and wake patterns of BTS to save energy, power efficient equipment, and modernising networks through retiring old and legacy networks.

These measures are paving the way for operators to achieve their energy efficiency targets in the net zero journey, and the reason why green telecom remains in the news on a daily basis:

So what?

The growing commitments of operators towards reducing their emissions not only have positive impact on the fight against climate change, but also on operators’ OPEX. For a telecom operator, maximum energy consumption happens at the network level, mainly the RAN (ranging from 70-90% of total energy consumption), which translates into a bigger slice of network costs allocated towards energy expenses (can be as high as 90%). The energy efficiency measures implemented by operators can therefore drive significant cost savings.

But what else does the industry need to do to achieve these targets?

Operators work with multitude of partners (infrastructure vendors, third-party data centres, and outsourced business operations) to deliver their products/services. It is therefore imperative for all the partners involved to work together, and not in silos, to align and achieve the industry wide targets of net zero emissions. An overarching framework, should bring all of the partners together and align their goals and targets.

At the same time, a list of universally agreed KPIs along with their definition and reporting criteria is important to measure progress and allow an apple to apple comparison for players; the absence of properly defined KPIs reporting criteria married with erroneous data availability of energy consumed at every point in the network makes things difficult and complex.

Done right, this will be a win-win for both the global economy and telecom industry!

Related readings:

2021: the year of network sunsets

Did you know?

Network Sunsets are also one of the measures used by operators in their energy efficiency initiatives, but also with wide-ranging impacts on device sourcing, roaming agreements, VoLTE rollout, and more

IT was only around 2015-16 when operators truly started warming up to the concept of network sunsets to support their LTE launch or expansion plans. Now, as 5G goes global, 2021 is the year when we will see the concept gaining full momentum. Compared with 43 networks shut-downs in the last six years, 35 networks will be shut down alone in 2021 (completed or planned).  In the five year period from 2021-2025, a total of 69 networks from 61 operators are expected to shut down. (Data as of September 15th ).

Below, we bring you the latest announcements from operators on their network sunset plans:

What spurred the growth in network sunsets and what is the one key thing that operators need to do right to make a network sunset a success?

The decommissioning of legacy networks offers a number of benefits to operators:

  • The spectrum can be refarmed (regulations permitting) for the launch and expansion of new technologies
  • It contributes to the energy efficiency goals of operators; the standards and infrastructure requirements for newer technologies allow for less energy consumption per bit of data, like with the NR standard of 5G
  • Legacy networks usually operate in low and mid frequency bands while more than 50% of 5G launches have been in the 3.5 – 3.7 GHz bands. Therefore, this makes legacy bands an ideal candidate to enhance the coverage and capacity of 4G and 5G networks
  • Where ageing 2G/3G networks eat up a significant portion of an operator’s opex, the new infrastructure innovations in 4G and 5G, such as Open RAN, RIC, and cloud based networks are touted to drive significant opex thereby presenting a good reason to sunset legacy networks

The above listed benefits seem to make the perfect case for network sunsets. But what often gets concealed behind these benefits is the challenges involved in the process. Phasing out a network generation completely is a complex process and usually takes years to complete. Transitioning of retail customers, for example, is still manageable by offering handset subsidies and continuation of existing tariffs, but transitioning enterprise / IoT customers can be a lengthy and difficult process given the reliance on low-cost 2G devices and networks.

To ensure no hiccups for customers (retail or enterprise), it is imperative that an operator undertakes a detailed risk assessment and fully plan for all implications, including new device demands, VoLTE support, etc. The entire transition process needs to be planned carefully while ensuring timely communication with affected customers and the provision of advice and customer support to ensure the smooth transition.

Related readings:

Finally, do you know that?

All of the above analysis is based on news curated by our team of analysts, and taken from our Industry Updates feed. Visit our feed today for more of the news shaping the mobile industry of tomorrow. It comes without interference!

By Radhika Gupta, Head of Data Acquisition, GSMA Intelligence

August 2021 in telecoms: what can’t you miss?

CURATED: GSMA Intelligence takes on Standalone networks and consumer gaming developments

As expected, MWC Barcelona saw an array of announcements on the leading innovations, developments, and partnerships that will shape the future of the industry. It comes as no surprise, then, that as the dust settles post MWC, most of the announcements and updates from the industry in the last month have focussed more on the day-to-day activities ranging from spectrum, network coverage, M&A and other updates.

For this edition of CURATED, based on our Industry updates, we bring you the latest developments on 5G SA networks and consumer gaming alongside our views on what these developments indicate and how they are shaping the future of industry.

5G SA: How long is the journey to become mainstream?

Did you know…

By mid-august, 15 operators* from 12 markets have already deployed commercial 5G services on Standalone (SA) networks. And, 90 operators* from 45 markets, representing around 38% of operators who have either launched or planning to launch 5G, have also announced plans for SA deployments (conducting trials, forging infrastructure and solution partnerships) after having initially launched 5G on non-standalone (NSA) network. Standalone (SA) networks are expected to be one of the key enablers for myriad 5G use cases across enterprise and consumer markets; this explains why the investment in these networks is a natural step for operators in their 5G journey.

According to a recent GSMA Intelligence survey, operators foresee the following as top benefits from deploying SA networks.

Source: GSMA Intelligence Network Transformation Survey 2021

The momentum and progress is also reflected in the following announcements from operators sharing updates on their coverage plans, new launches, partnerships, and trials:

ThemeIndustry Update
TrialAug 4: StarHub launches 5G Standalone market trial
July 27: M1 launches 5G Standalone market trial
LaunchJuly 16: KT launches commercial SA 5G network
Test new featuresAug 3: Nokia achieves 5G SA carrier aggregation with Taiwan Mobile
July 28: M1 and Samsung deploy 5G VoNR service on 5G SA network
PartnershipsJuly 19 : Taiwan Star Telecom selects Nokia to extend its 5G footprint
July 17: Vivo partners AIS to conduct network test
July 16: Movistar contracts Ericsson, Nokia for 5G SA deployment
Coverage updatesJuly 27: M1 plans to reach 75% nationwide coverage with its 5G SA network by the end of 2021

So what?

The true success of 5G based on SA will only happen when it becomes more mainstream. How long this will take, therefore, becomes one of the key questions to answer! Any network evolution is a gradual process and can take anywhere from months to years depending on the specific operator circumstances, strategies, and investment decisions. However, referencing the lifecycle of existing LTE networks, based on GSMA Intelligence data, it took operators (data used for 150 operators) an average of around 2.5 years to upgrade from LTE to LTE-Advanced. This does not suggest a direct correlation for understanding the lifecycle of an SA upgrade from NSA, but it serves as a good analogy. LTE-Advanced, of course, was a technical advancement on existing LTE networks, whereas a move from NSA to SA will likely be more significant for most operators’ and might take similar or more time than LTE upgrades. It will be interesting to how long it takes for SA networks to become mainstream.

Meanwhile, in the near to medium term, building on established coverage of LTE, NSA will continue to do the heavy lifting of 5G but operators still need to incorporate SA network planning in their long term roadmap.

Related reading:

5G SA means business – but also consumer
5G SA networks are going global, ready to become mainstream

*Number of operators includes both Mobile and FWA 5G launches

The shift in consumer gaming behaviour and opportunities for operators thereof

Did you know…

According to a GSMA Intelligence consumer survey: 60% of the adult population across 20 developed countries play digital games at least once a week. But, what percentage of gamers pay for these? On average, only 1/3rd of gamers pay for games. The recent gaming surge among consumers coupled with only 1/3rd paying for them presents monetisation opportunities in the gaming ecosystem.

Not only this, the survey also brought to light the shifting consumer behaviour:

  • A preferential shift to gaming on smartphones (thanks to multitude of games available on cloud platforms,
    affordable smartphones, and the increasing availability of 5G networks and devices)
  • Gaming is now for every age group, however, the proportion of people playing varies among different age groups.
    72% of 18–24 year-olds play games at least once a week, while 42% of people in the 65+ age group do so

Undoubtedly, the changing consumer behaviour and surge in gaming creates new monetisation opportunities for operators beyond connectivity or upselling larger data packages, and also creates opportunities for other players in the gaming ecosystem. This is also corroborated in the following recent developments in industry on the gaming front:

ThemeIndustry Update
Partnership for third party sellingJuly 30: Movistar partners Microsoft to offer Xbox Game Pass Ultimate to customers
July 16: Sri Lanka Telecom partners with Swarmio to launch gaming platform
E-sports launchJuly 27: Ooredoo Qatar, in partnership with Quest, launches eSports brand
Cloud gaming launch in partnershipJuly 24: Facebook launches its Cloud gaming service on iOS through a web app

So what?

It is clear that the Industry sees an opportunity in gaming and is making progress towards trying to capture it. The question then becomes what are the options available to operators for monetising the opportunities in gaming and what success will look like. Drawing insights from the same GSMA Intelligence report, there are four routes available for operators to capitalise on the opportunities: Two in B2C (selling third party games, develop in-house games) and two in B2B (offer networks services e.g. edge and private networks to gaming and media companies or develop e-sports products). Operators will derive their success in the form of new revenues, premium customer base, reduced churn alongside other benefits highlighted in the report. Now, which route to take will then depend on some underlying factors such as market profile, network assets of operators, and their strategies?

Clearly the gaming industry is expected to grow manifold in the coming years and it’s time to capitalise on the opportunities.

For more detailed insights related on consumer gaming behaviour, the options available to operators and the underlying factors please refer to the following GSMA Intelligence publications:

Gaming comes into its own: capitalising on shifting consumer behaviours
Consumer gaming: assessing the new revenue opportunity for operators
Consumer gaming in the 5G era: Is there a new opportunity for operators

Finally, do you know that…

All of the above analysis is based on news curated by our team of analysts, and taken from our Industry Updates feed. Visit our feed today for more of the news shaping the mobile industry of tomorrow. It comes without interference!

By Radhika Gupta, Head of Data Acquisition, GSMA Intelligence

Consumer gaming in the 5G era: is there a new opportunity for operators?

We knew it was not a matter of if, but when; like with music and video in the past, digital transformation is now disrupting the gaming industry. Shifting consumer behaviour is a major driving force, as is recent progress with enabling technologies such as cloud, 5G and immersive reality. Here we look at the transformation of the gaming industry across different areas, and analyse what it means for mobile players.

 Gamer behaviour is changing

Gaming is a popular pastime for people of all ages. GSMA Intelligence Consumers in Focus research shows that 60% of the adult population across the 20 major countries we analysed plays digital games on consoles, PCs or mobile devices at least once a week. That is a significant user base. Our research also shows that gamer behaviour is changing. First, there is a shift of gaming time from consoles to mobile devices, especially smartphones. This brings greater reach and higher consumer engagement, owing to the ubiquitous adoption of smartphones and the plethora of games available on mobile app stores.

Second, like with music and video, a subscription model is now emerging for gaming, as consumers show interest in it. Today, gamers have a broad and diverse range of options to choose: these include subscriptions for consoles (e.g. PlayStation Now, Nintendo Switch Online, Xbox Game Pass), cloud gaming subscriptions (e.g. Google Stadia, Tencent Start, GeForce Now), subscriptions designed for mobile (e.g. Apple Arcade, Google Play Pass) and subscriptions provided by game publishers (e.g. Uplay+, Origin Access).

What does this mean for the gaming industry?

It means disruption and innovation. The advent of mobile as a gaming platform and the rise of cloud-based gaming have disrupted the position of consoles as the dominant platform, opening up the market to new competitors. Console sales have been hit in recent years, while some OEMs have enhanced the gaming capabilities of their smartphones. Flagship mobile devices (e.g. the Samsung Galaxy S21, Razer Phone 2 or Asus ROG Phone 5) are marketed specifically for gaming, with aftermarket accessories that can turn these devices into dedicated mobile gaming consoles.

It also means a new business opportunity. Let’s do the math; 15% of gamers (in the 20 countries we analysed) already have a gaming subscription; half of gamers are not interested in a gaming subscription (for now); that leaves an incremental market of at least 35% of gamers. If subscription gaming is to work as a mass-market commercial product, gaming companies will need to attract non-paying gamers and turn them into paying gamers.

The prominent cloud gaming services in operation are run by the big companies with established cloud and content delivery network infrastructure footprints (e.g. Microsoft, Google and Tencent), but mobile players, such as Apple and a range of operators, are making progress here too. Also, last week, Netflix confirmed its intention to enter the gaming market (certainly a big development).

Why are operators looking at gaming, and why now?

So far, operators have mostly benefited from gaming indirectly through upselling, as heavy gamers need larger mobile data allowances. However, the shift of gaming to mobile devices, coupled with technology innovation that heavily involves (or is led by) operators (e.g. cloud, edge, 5G) are driving new thinking.

5G is important for (at least) two big reasons. First, streaming requires cloud-based content access, delivery and consumption, which in turn requires high-speed connectivity and low latencies – this is 5G territory. The rollout of 5G networks enables the faster and low-latency connections that smartphone gamers need to have higher-quality, uninterrupted cloud-based gaming sessions.

Second, 5G users are more engaged with gaming than 4G users (twice as much to be precise) and are more interested in having gaming services bundled with their mobile connectivity contracts (40% higher interest). Also, nearly half of people playing games on their smartphones frequently find the enhanced gaming experience enabled by 5G appealing – especially among younger generations (see chart). This is something for operators to consider when designing their 5G and multi-play offerings and tariffs.

Figure: Appeal of enhanced gaming as a new 5G use case

Percentage of respondents*

* Of those who play games on their smartphones frequently (at least once a week) Question: “5G is expected to create new ways to deliver services to consumers. To what extent does gaming appeal to you?”

Source: GSMA Intelligence Consumers in Focus Survey

What are the strategic routes to gaming for operators?

An increasing number of operators are aiming to monetise the transformation of gaming via a more direct role. We have identified four possible routes for operators. Two of them are B2C-focused: selling third-party gaming services or developing own-branded services, often bundled with mobile or quad-play offerings. The other two are B2B-focused: offering premium network capabilities (e.g. edge technology, network slicing and private networks) to gaming/media companies or developing e-sports. These routes are not mutually exclusive – a complete gaming strategy may well involve a combination of these options.

Selling third-party gaming services (bundled with mobile) represents the fastest and most common approach for operators, but it is largely a customer acquisition/retention strategy. Developing own-branded gaming services offers greater monetisation. As with video streaming, operators will find it challenging to have a cloud gaming service that is competitive globally; however, it is within their reach to launch competitive propositions for local markets. A range of operators have already launched local cloud gaming propositions, including Deutsche Telekom, TIM, Vodafone Italy, China Mobile and the three South Korean operators. KT and SK Telecom each aim to reach 1 million gaming subscribers over the next 2–3 years; this would correspond to around 10% of their 5G subscriber bases (assuming that most gaming subscribers will be 5G users).

What is the incremental revenue opportunity for operators?

Our revenue opportunity model considers multiple factors, such as the current adoption of subscription gaming, the probability that core gamers will adopt a subscription in the future, the 5G effect (a function of 5G penetration and 5G gamer behaviour) and pricing dynamics. We sized both the direct (gaming subscription revenue) and indirect contribution (core ARPU uplift) of gaming. The indirect contribution is important, as the average mobile spend of 5G paying-gamers is 20% higher than that of 4G paying-gamers, meaning 5G gaming attracts premium mobile subscribers.

Taking 2020 mobile revenue as the base, gaming subscriptions could generate up to 4% of new revenues for operators in 2025. This ranges from 3% in the UK, Italy and the US to 4% in South Korea. Given that annual mobile revenue is set to grow low single-digits in three of the four markets (and declining in Italy), the gaming opportunity, which comes on top of these figures, can be remarkable. In addition, operators are exploring the gaming opportunity in a period when traditional pay-TV revenue is under pressure and falling in some markets, providing one more reason to try and do well in gaming.

As mobile increasingly shapes the future of gaming, we will continue to track and assess technology developments, gaming adoption, and business opportunities. You can read more on this topic in our latest report Gaming comes into its own: capitalising on shifting consumer behaviours.

By Pablo Iacopino, Head of Research and Commercial Content, GSMA Intelligence

July 2021 in telecoms: MWC21 & more

Curated: GSMA Intelligence takes on Open RAN and Public Cloud developments

Last month saw the return of MWC Barcelona– the most anticipated event in the Telecoms industry calendar. No surprises then, that we saw myriad announcements and developments in the last month from a wide spectrum of topics.

For this edition of CURATED, we decided to shed some light on developments in two of the most hotly debated topics in the industry right now – Open RAN and Public Cloud. As usual, we bring you a combination of known and unknowns from the topic.

Open RAN: Going Global

Do you know?

As of today, 73 operators from 38 markets have either deployed or committed to Open RAN deployments. Scanning through the list of operators and their geographical presence, it is clear that Open RAN is now going global, touching developed and developing markets alike. Be it Axiata announcing plans to deploy Open RAN in multiple countries by end 2021, MTN announcing its Open RAN plans across its footprint, OR the partnership between Airtel and Tata to deploy indigenous Open RAN solutions–highlighting the rapid global spread.

 The momentum continues in other parts of the world also with UK government funding a 5G Open RAN testing lab and Deutsche Telekom switching on its “O-RAN town” with massive MIMO radio units for high performance. The foundation of Open RAN was laid with the creation of TIP in 2016, but 2021 is clearly the year when we are seeing Open RAN gain global momentum. We saw many interesting developments in Open RAN space in the last month, some of which are highlighted below:

So what?

All the above points towards two things for Open RAN – growing momentum, and deployments going global. Does this mean that Telcos who have not yet advanced their Open RAN plans need to jump on the bandwagon now?

There is no clear “Yes” or “No” answer. This will depend on the current situation and requirements of each individual operator. Their decisions will be driven by factors such as   – where they are in the lifecycle of their legacy networks, what is their CAPEX vs OPEX split in networks investment, are they looking to upgrade brownfield networks or building a greenfield 5G network. According to the GSMA Intelligence Operator in Focus Network Transformation survey, Telcos also see ownership/co-ordination, lack of internal expertise and integration into existing systems as the top challenges for adoption of Open RAN. While cost saving is often advocated as one of the benefits of Open RAN, a lack of clarity on ROI also acts as a hurdle.

The above challenges do not mean Telcos must necessarily reject Open RAN. Rather, telcos need to be aware of their requirements and network evolution plans. And in the present, Telcos still need to get the ball rolling by forging partnerships that allows them to undertake R&D on existing networks, understand use cases with Open RAN deployments, and undertake trials to better inform their deployment decisions.

Are the clouds over public cloud clearing in telecoms?

Do you know?

What did leading public cloud evangelist, Danielle Royston, tout for public cloud at MWC? She said simply – ‘GO ALL IN’! It is natural for an evangelist to make such a statement but she backed it up by advocating the perceived benefits of utilising hyperscalers and public cloud, IE TCO savings (in millions and billions), scalability and flexibility, leveraging hyperscalers’ data centres both to save costs and use  their regional and local presence to make edge computing viable.

There were plenty of public cloud partnerships being announced by telcos prior to 2021. Yet the announcement from US telco Dish in April and the presence of Cloud City at MWC Barcelona highlights the momentum we now see in the adoption of public cloud. The increasing intersection of telecoms and public cloud is reflected in the below announcements and is also mirrored in the forthcoming MWC LA theme of Telco Cloud.

So what?

There is clear momentum behind public cloud in the telecoms industry with progress on multiple fronts from network related developments to co-developing enterprise related solutions and also hyperscalers working on future-proof solutions. But the industry is still divided on the killer use case. Where some in industry see latency as the benefit (leveraging data centres for edge computing) of using public cloud, others see the same as a risk arising from using shared space on a public cloud. Beyond this, the adoption of public cloud is also facing headwinds from the speculated risks to privacy and data security. The data sovereignty rules in some market will also make it difficult for many operators to fully embrace the public cloud.

However, the multitude of enterprise opportunities in the 5G era are only expected to be supported by the new cloud native architecture of 5G, powered by AI solutions and edge computing made possible using the cloud. This makes it inevitable for telcos to embrace cloud technology; the choice is simply between public or private cloud. To capitalise on the benefits of public cloud and overcome the highlighted risks and challenges, the industry must work together. A WAIT and WATCH approach does not always guarantee success but working together and co-creating solutions certainly does.

The transition to public cloud will be a gradual and phased process and will be made possible with initiatives from across the cloud ecosystem. Hyperscalers are also taking initiatives to make this happen for telcos – Google Cloud joining O-RAN alliance, Azure launching private MEC, and AWS introducing local data processing on outposts are sign of things to come.

Finally, do you know that?

All of the above analysis is based on news curated by our team of analysts, and taken from our Industry Updates feed. Visit our feed today for more of the news shaping the mobile industry of tomorrow. It comes without interference.

By Radhika Gupta, Head of Data Acquisition, GSMA Intelligence

June 2021 in telecoms: what can’t you miss

Curated: GSMA Intelligence takes on Smart City developments and Telco tower assets

This year, June is a notable month for the telecoms and tech industry because it’s ringing MWC in my ears. I am clinging to my excitement as the ecosystem comes together later this month to learn about, and experience, the announcements/demos/launches that will shape the future of the industry. Of course, the event is Hybrid this year; that means you can take in all the updates from the industry in real-time from the comfort of your office/living room/bedroom…wherever you’ve gotten used to working from.

The theme of MWC21 is “Connected Impact”, and as we scan through our News Feed from the last few weeks, that this is corroborated in the business strategies, industry partnerships, and other announcements from ecosystem players. In this edition of CURATED, based on the recent news, the two topics we selected to take a deeper look at are Smart city developments and operator Tower monetisation efforts. As always, we want to highlight the news items that might not have gotten a lot of attention, and call out the topics they signal – and how they could play an important role in shaping the future of industry.

5G: Critical piece of the Smart City puzzle?

Do you know?

Global smart city connections are expected to experience a massive increase from 307 million in 2020, reaching 837 million by 2025 (see chart 1). Cities and countries have been focused on Smart city opportunities for years, but the market has, generally, developed only in selected areas (Smart Meters, Smart lighting), leaving broader smart city ambitions unrealised.

So, will 5G change things?

There is no dearth of narrative on how the ability of 5G to connect millions of devices per square km, the ultra-low latency, and high throughput creates an optimal canvas to paint the smart city landscape. BUT, what also differentiates 5G, and make it a key enabler, is the new virtual and cloud native architecture of 5G and its confluence with technologies like AI, cloud, and edge. The cherry on the cake is 3GPP including licensed LPWA technologies, the key tech for IoT, as part of 5G specifications.  

With 5G now available from 168 operators in 68 countries (mobile+FWA) already, telcos/vendors/software providers are making inroads by forging partnerships and announcing their plans. In few such recent developments:

So what?

5G has the potential to unlock an array of opportunities for the ecosystem players in the smart city space. It is evident from the flux of announcements – highlighting the recent momentum gained – that telcos and other ecosystem players have started venturing into this space to capitalise on the existing opportunities.

But to make the most of it, they will also need to be mindful of the challenges (funding challenges, lack of interoperability between solutions from different vendors, who will take the E2E ownership) that can impede the progress. There is no unanimous solution to all the challenges, but as always, the “timing of involvement” is key. Government/Municipalities will be at the front and centre in the Smart city development, however, it is important for the ecosystem players to get involved from the planning stage. Collaborating early can help unveil business models that allow for cost and benefit sharing alongside the allocated budgets from the government. Coming together at the planning stage also ensures creation of interoperable solutions and open platforms.

Ultimately, the early involvement can help to lessen the impact of these challenges, and creates an opportunity to maximise on the potential benefits.

Tower Monetisation: Moving from controlling to hiving off tower assets

Do you know?

Tower monetisation, in different forms, is becoming a mainstream financing option for Telcos. There is a clear shift in business models from controlling infrastructure assets, to co-sharing, and evolving into sale and leaseback models.

Why? With heavy debt burdens, and increased CAPEX levels to support the deployment of next-generation tech, operators need to find money somewhere and tower monetisation comes as a viable option.

The ongoing trend of monetising tower assets via sale option is also noted in the announcements from operators in the last few weeks.

So what?

The new model of tower assets (sale and leaseback agreements) poses a win-win situation for both operators and towercos. There are clear benefits for the telecom operators in divesting stakes from their tower arms. The funds unlocked can be used to reduce debt and make investments in new infrastructure, helps to maintain focus on their core business, and also drive opex efficiencies. From the lens of towercos also, the business model works as they earn revenues from multiple tenants on the same infrastructure, and this model allows for the scalability and flexibility required to build next generation infrastructure.

Where towercos are competing for a bigger slice of infra assets with all these acquisitions, they need to remember that while scale is important, so are the new features and innovations (like edge and cloud). To remain competitive in the long term, they should allocate part of their investments to create future-ready infrastructure that can also support new generation technologies and features, like AI, Edge, cloud.

Finally, do you know that…

All of the above analysis is based on news curated by our team of analysts, and taken from our Industry Updates feed. Visit our feed today for more of the news shaping the mobile industry of tomorrow. It comes without interference!

By Radhika Gupta, Head of Data Acquisition at GSMA Intelligence

May 2021 in telecoms: What news should be on your radar?

Curated: GSMA Intelligence takes on 6G and Digital Healthcare

Last month, we kicked off our new monthly blog series to explore recent announcements and trends in the telecom industry. We look at WHAT is happening in the industry, HOW it is impacting telcos, and WHY it is important.

The insights are based on our Industry Feed, one of the most complete repositories of mobile news in the market, curated daily by our team of experts.

In the last couple of weeks, we saw announcements on cloud platform deals, operators deploying new 5G use cases, 6G related announcements, as well as updates on private networks deals and deployments. Against this backdrop, we selected two topics – 6G and Digital Healthcare – to take a deeper look at. 6G is hot off the shelf and Digital Healthcare is the need of the hour.

6G: is the clock ticking?

Do you know that…

Recently, we have seen an increasing buzz in the industry around “6G” also referred to as “beyond 5G”. Be it the launch of Next G alliance in Q4 2020 or the launch of the “first 6G satellite” by China in the same quarter, 6G is clearly on the radar of industry. Developments like China claiming that Chinese companies account for about 35% of the 6G related patent applications, and the establishment of 6G vision group within the ITU-R to define key capabilities of 6G, are some of the contributors in propelling the industry to announce their 6G plans. What might you have missed?

  • The U.S and Japan have joined forces to invest USD 4.5 billion in R&D, testing and deployment of secure networks for the next generation of communications (6G)
  • The German government has earmarked up to EUR 700 million to pump into 6G research by 2025. The initial investment of EUR 200 million will be injected to create 6G research hubs that will work towards preparing the next generation of communications by co-ordinating activities and working with other international bodies
  • Huawei, at the company’s global analyst conference, announced plans to launch 6G equipment in 2030. Reportedly, Huawei is also planning to launch two test satellites in July this year to explore 6G technology
  • Next G alliance announced the formation of working groups and the launch of its technical program. The National 6G roadmap working group is the key group and will address the full lifecycle of 6G commercialization

So what?

Where 5G connections accounted for only 4.21% of global connections by the end of Q1 2021 (Source: GSMA Intelligence), the recent announcements and initiatives on 6G leave many people pondering if now is the right time for the 6G clock to start ticking, or should we still be focusing on 5G. We know that commercial mobile 5G networks only saw the light of the day two years back in 2019 and they have a long way to go to reach their full potential; from exploring digital innovations supported by 5G across various sectors to the deployment of pending standards from 3GPP release 17.

BUT, what also can’t be ignored is that we must start defining the 6G roadmap in the near-term. Some might argue that 6G is still in a nascent stage pending even the industrial definition and any focus on 6G right now will disturb the growth of 5G. However, as 6G is expected to be deployed commercially by 2030, planning needs to get underway now to support the commercial deployment within this timeframe. This includes discussions on spectrum requirements, defining 6G standards, etc. And, in the here and now, it includes looking for ways to integrate would-be 6G innovations into 5G networks.

Digital Healthcare: how far from reality and what is the role of telecom operators?

Do you know that…

The global digital healthcare market is expected to grow at a CAGR of 25% from 2019-2025. The adoption of digital practices in the healthcare (telehealth, remote monitoring devices) began years ago, but COVID-19 accelerated the digital transformation of healthcare by exposing the challenges in conventional healthcare systems. Telcos, for their part, are rapidly progressing in the digital healthcare space with partnerships/M&A in the ecosystem. In a few such partnership announcements recently…

  • AT&T and Cherish Health partnered to help monitor COVID-19 patients. A wearable biosensor device from Cherish Health capable of monitoring the oxygen levels, temperature and heart rate of a patient is powered by the First Net network built by AT&T.
  • LifeLabs teamed up with TELUS Health to offers its MyCareCompass customers virtual counselling through the Babylon app from Telus Health.
  • T-Mobile – U.S.A and Zyter have collaborated to make virtual healthcare accessible to more people. Zyter will leverage the network footprint of T-Mobile to bring patients and healthcare professionals closer remotely.
  • Airtel – India joined hands with Apollo 24/7 to offer its Airtel Thanks customers virtual healthcare services (Airtel Thanks is an exclusive rewards program for valued Airtel customers which gives them access to a host of exclusive rewards, perks & privileges).

So what?

Digital healthcare opportunities have been on the radar of operators for quite some time now. Years ago, it began with M2M enabled glucose and blood pressure monitoring devices where data could then be accessed by healthcare professionals on a cloud platform. Fast forward to 2020, the strain caused by the pandemic on healthcare infrastructures and the need to stay-at-home gave a push to digital healthcare solutions like telehealth consultations, virtual care platforms and virtual pharmacies.

What’s at play for mobile operators? According to a GSMA Intelligence’s survey of operators in 2020, healthcare was among the top verticals deemed by operators as an opportunity in the 5G era to boost their revenues “beyond connectivity”. Predicted use cases of 5G like remote surgery are still a work in progress, but the availability of 5G already in 59 countries has put the long awaited digital healthcare initiatives on a fast track to success.

Riding on the back of these partnerships, operators are well on their journey to play a key role in the digital transformation of healthcare. Healthcare in a majority of the economies is big enough – and is only growing with situations like pandemic – to offer multiple opportunities to operators across the value chain such as connectivity providers, private network deployments, cloud storage, data analytics, developing virtual platforms, remote screening and diagnostics.

It would not be premature to say that Digital Healthcare is moving further in the direction of reality and that operators are busy carving out their space in the new healthcare system. TELUS Health sets a good example in this regard, the revenue from health services accounted for approx. 3.5% of total revenues (Fixed + Mobile + Broadband + Health) in Q1 2021.

Finally, do you know that…

All of the above analysis is based on news curated by our team of analysts, and taken from our Industry Updates feed. Visit our feed today for more of the news shaping the mobile industry of tomorrow. It comes without interference!

By Radhika Gupta, Head of Data Acquisition at GSMA Intelligence

Accelerating the Omnichannel Retail Experience with IoT

Recently, Amazon announced the opening of its Amazon Salon in London, a hair salon to test “the latest industry technology,” such as augmented reality (AR). This development is hot on the heels of its “cashier-less” grocery store, which mimics a traditional grocery store but with the ability for shoppers to pay for their items without having to check out at a cashier. The store uses high-tech cameras linked to inventory stocks to achieve this experience.  

Combined with an easing of lockdown restrictions, it’s truly a great time to be living in London! (Though, to be fair, the London outlet joined over 20 stores already in operation across the U.S. under the “Amazon Go” brand.)  

While this move further signals Amazon’s ambitions to expand its share of the consumer wallet beyond online distribution, the greater significance is that it underlies the overall transformation of the retail sector, which has only accelerated because of the COVID-19 pandemic. Indeed, the pandemic has changed the face of retail forever: Brick and mortar stores with no online presence, and hospitality and tourism generally, have felt the negative impact of the pandemic the most, having to close doors to adhere to COVID-19 rules. But, even where business has been less impacted, the move to an omnichannel retail experience—integrating mobile apps, social media, in-store, and online shopping for a seamless customer experience—has been hastened. 

Data-Driven Digital Transformation

Of course, like so many other industries, the retail sector’s digital transformation must be data driven. According to the GSMA Intelligence Enterprise in Focus survey 2020, 63% of retailers deployed IoT as part of a wider transformation agenda. 69% of surveyed companies, in turn, have already deployed IoT solutions (see chart), with a majority having less than 500 connected IoT devices.  

Connecting the assets, however, is just the first step. The next step is to collect, and then analyze, data to gain meaningful insights to change business processes in line with strategic goals. What are those goals? Per the survey, the top three IoT objectives for retail companies are: 

  • QoS (45%) 
  • Customer loyalty (44%)  
  • Supply chain management (40%) 

Of course, technologies, such as SD-WAN, 5G, edge computing, AI, and IoT play a key role in enabling all of this.  

 IoT deployment status, retail

Revenue Generation is Top of Mind

When asked whether IoT was deployed to save on costs or to generate new revenue, IoT decision-makers were equally split in 2019 (50% each). In 2020, however, revenue generation came out on top (52%), with retail decision-makers being ever so slightly above the average at 54% (a 4% increase from 2019). Although this percentage change is small, it reflects a steady move towards using data-driven insights to create new revenue streams as a reason for IoT deployment. 

Real-Life Retail Applications 

So how about some real-life examples of the retail applications that are currently on the rise? 

Contactless Payments

Point-of-sale will remain the largest segment within retail:
Even before the pandemic, this transition has been supported by moves to cashless payments and government initiatives to stimulate electronic payments, such as those in India and Mexico. The coronavirus pandemic has taken the move to another level as it facilitates germ-free, fast, and safe transactions. Also, due to social distancing restrictions, roaming PoS is on the rise, with tablets/PoS being carried around by staff members, as pubs and restaurants move to ensure Covid-safety guidelines are being followed, while reducing congestion.   

Autonomous Checkout 

It’sthe final step in the journey retail has been undergoing to streamline the whole shopping experience:
From cashier-less self-checkouts, scan-and-go, click-and-collect and mobile checkout. Autonomous checkout, e.g. Amazon’s “just walk out” technology mentioned earlier, allows retailers to grow their operational efficiency and profit margins. What’s more, automating the process itself leads to a greater data capture and a better understanding of customer behavior, which in turn can inform retail strategy by AI-enabled personalized marketing and content management.  

Robotics 

Ocado, the Britishonline retailer, had already transformed itself into a technology company, investing in robotics, AI/ML, edge networking, and its Ocado Smart Platform (OSP). Its recent partnership with Oxbotica takes this forward, aiming to increase warehouse automation, via the use of robots for packing, transporting, and delivering groceries. Supported by a private LTE network to control 1,000 fast moving robots in its logistic center, we can see the shape of things to come.  

While the pandemic has boosted the rise of enterprise systems, such as ERP systems, payroll systems from on-prem to the cloud, it has also underlined the need to process data at the edge. By moving workloads to the network edge, devices can run algorithms to analyze data and act locally, sending only what’s needed to the cloud. At the same time, data security and ensuring data privacy is key—our data indicates that retailers that deployed IoT to ensure regulatory compliance have done so to adhere to data-security regulation.  

So, what comes next? 

5G is a given. And, as it matures, the retail sector already has clear expectations focused on higher speeds (65%), private networks (58%), and latency (52%). 5G, however, needs to be seen as a means to an end. After all, enterprises aren’t concerned with technology per se—they want to connect the physical and digital worlds. Today’s technology discussions—whether focused on AI/ML, IoT, 5G, edge, or SD-WAN solutions—need to be focused on delivering that. 

By Sylwia Kechiche, Principal Analyst for IoT & Enterprise, GSMA Intelligence

Sylwia will join MEF and other industry experts to discuss IoT and AI in retail on Wednesday, 26 May. Find out more and register.

Curated: GSMA Intelligence takes on mobile news

April 2021

In this new monthly blog series, we explore recent mobile industry announcements, and why they matter to you and the ecosystem. These insights are based on our Industry Feed, one of the most complete repositories of mobile news in the market, curated daily by our team of experts.

In the last few weeks, there were several developments in the mobile industry involving, but not limited to: Open Ran deals, 5G launches, coverage expansion, private networks demos/trials, industry partnerships, network/operator closures, restructuring…and more.

From these recent events, the team selected two market developments, and pondering their impact on the future of the industry:

Spin-off, Sell, or Shuffle – What is the latest with restructuring in telecoms?

Do you know that…

Recently two big operators announced new restructuring plans. Bharti Airtel shuffled its existing structure and announced a new structure that involves: (1) folding “Airtel Digital – the digital assets company” in the main holding company “Bharti Airtel”, and (2) creating a new 100% owned subsidiary “Airtel Limited” that will focus on the telecom business of the company (includes DTH business that will eventually be folded into the main telecom company). Separately, SK Telecom announced plans to spin off its telecom businesses into a new separate entity. The existing entity, also referred to as surviving entity, will house the telecom businesses (including SK Broadband), and a new holding company will be created that will oversee the leading tech subsidiaries of SK Telecom dealing into businesses ranging from semi-conductors to e-commerce. In another news, Indosat – Indonesia has joined the club of operators monetizing their tower/infrastructure business. The operator completed the third and final sale of its tower assets involving sale of 4,200 towers at a value of USD 750 million. The proceeds from the sale will be used to improve network performance and launch digital innovations.

So what?

Whether it’s a spin-off, organizational shuffling, or asset sale, the purpose and focus of restructuring is same: Monetize non-core businesses, unlock valuations of tech subsidiaries, tap digital innovation opportunities, and drive future growth in telecom business.

Not one size fits all! The same structure might not work for all the operators universally but what will work is the identification of assets/business that can be monetized in some or the other form and leveraging those assets. For some, it can be the tower business whereas for others it can be e-commerce companies or digital channels that will unlock valuations and drive funds too.

In another news…

Operators and Vendors step up their efforts on 5G private networks

Do you know that…

Operators are quickly moving from the partnership stage to trials/demos and deployment of 5G private networks. In recent announcements from U.S., AT&T has developed a 5G private network at Chicago’s MxD to help companies learn how private 5G networks can improve their manufacturing operations while Verizon, on the other hand, along with AWS, is testing private MEC at Corning’s Smart factory. Outside the U.S, TDC – Denmark and Ericsson came together some time ago and launched private 5G network pilot at grundfos plant, the findings and learning are now shared as valuable insights for future applications. From Asia, Singtel launched GENIE, a portable 5G platform to enable enterprises to experience 5G’s capabilities and trial use cases in their own premises. Meanwhile, Edzcom deployed private 5G networks at Mussalo and Hietanen shipping terminals and NOS installed 5G network at Sport Lisboa e Benfica stadium.

Industry partnerships are also very important and require the ecosystem to come together to deliver private networks set-up for enterprises. In last few weeks, we saw this as a number of players joining forces in separate deals to bring private 5G networks to life. Some of them are:

  • Orange partners with Ericsson to provide private automotive connectivity to Applus+ IDIADA
  • T-Mobile to deploy 5G campus network for Czech university
  • Claro, Embratel and Ericsson set up 5G Smart Campus in Sorocaba
  • Siriraj Hospital teams up with Huawei to develop a cloud-based unified management system

So what…

Now is the time for players to gain first mover advantage when it comes to 5G private wireless networks. LTE private wireless networks are already on the market, but 5G is expected to unlock new opportunities. Industrial IoT and a number of other enterprise use cases demanding low latency, high throughput and secure communication can be realised with 5G private networks.  There are various business models at play in the deployment of private networks; identifying your role in these models and early partnerships to seize on the opportunity will give an operator/vendor leading edge.

Finally, do you know that…

All the above analysis is based on news curated by our team of analysts, and taken from our Industry Updates feed. Visit our feed today for more of the news shaping the mobile industry of tomorrow, without interference.

 

Radhika Gupta, Head of Data Acquisition, GSMA Intelligence

Intelligence Brief: How has the Indian mobile sector survived Covid-19?

The outbreak of Covid19 (coronavirus) has impacted almost every country across the globe and India is no different. In fact, for the last two quarters, India was among the top ten most affected countries in terms of infections and deaths. Stats for the Indian telecom market, however, suggest it has remained on a stable footing; in Q2 2020, among the top ten most affected countries, eight reported a negative mobile revenue growth (year-on-year basis). India and Brazil were the only two countries to report positive mobile revenue growth.

Revenue growth is important, but only one part of the story. Let’s have a quick look at some of the key metrics to identify the overall impact:

Revenue and ARPU: Indian telecom operators reported strong growth in revenue during the quarter ended June 2020, thereby defying the economic slowdown from the countrywide lockdown of 68 days through the end of May. Together commanding a subscriber market share of more than 60 per cent – Reliance Jio and Bharti Airtel witnessed a strong ARPU uplift and an annual positive revenue growth of 33.7 per cent and 14.7 per cent respectively. On the other hand, Vi (earlier known as Vodafone Idea) reported a revenue and ARPU quarterly decline of 9.3 per cent and 6 per cent respectively during the quarter, mostly due to existing debt.
Lower churn levels: Jio reported a strong wireless gross addition of 15.1 million (36.4 per cent increase year-on-year) despite Covid-19 related restrictions across the country, owing to the increase in demand for data and heavy reliance on 4G networks in India. Monthly churn rates reached all-time lows in the last five years, owing to retail store closures. Bharti Airtel and Vodafone Idea reported churn at 2.2 per cent and 2 per cent respectively during the quarter ended June 2020.
EBITDA/EBITDA Margin: The leading two telecom operators, Reliance Jio and Bharti Airtel, reported an annual increase in pre-tax profit of 55 per cent and 35 per cent and margin growth of 4 percentage points and 6 percentage points respectively during the quarter ended June 2020, thereby defying the economic slowdown.

It is evident from the above that Indian telecoms weathered the Covid-19 storm well, but the bigger question is how? What makes India different from other countries in the list?

The power of people and ubiquity – India’s demographic is very different from all other most adversely affected countries. With a population of more than 1.3 billion people, India has a huge market base which helped cushion the overall impact of the crisis. LTE subscribers in India rose around 26 per cent year-on-year to around 644 million by June 2020. This clearly shows India’s reliance on mobile phones for various reasons.
Low fixed penetration giving mobile a window of opportunity – According to TRAI (the Indian telecom regulator), of the 683 million broadband subscribers in India as of May 2020, 664 million were using mobile broadband and 19 million were on fixed broadband. The market witnessed quite a surge in its data traffic due to the nationwide lockdown and new norm of remote working. The pressure created from this massive shift from the normal practices to the digital ones was likely to fall upon the mobile networks because of the limited fixed penetration and insufficient fibre layout in the Indian telco market.
Tariff hikes translated into incremental ARPU – The operators announced tariff hikes in the last months of 2019, immediately before the pandemic. These hikes were in the prepaid segment, accounting for nearly 90 per cent of India’s mobile subscribers. Now, the increased data traffic on mobile networks (see chart below, click to enlarge) resulting from Covid-19 combined with increased tariffs translated into growth in ARPU and revenues. This explains how Indian operators remained resilient during the Covid-19 storm.

[1]While it’s true that the Indian telco market has suffered less financial impact due to Covid-19 in comparison with other countries, uncertainty related to economic recovery of the country, pressure to meet ever increasing demand for data services, and competitive intensity still pose a great threat to the sector’s financial stability. So, how does the sector remain sustainable in the long term and deliver on the demands of the new normal? What steps/measures can aid operators?

More harmonised Spectrum: Due to the relatively limited extent of fixed infrastructure, the pressure from the extra traffic created by the shift to remote life is likely falling on the mobile network – primarily LTE. Satish Jamadagni, VP for network planning at Reliance Jio, recently claimed LTE cells in the country are at 90 per cent to 98 per cent capacity, compared to other countries at 40 per cent  to 50 per cent capacity. This clearly shows the appetite for more 4G spectrum in India.

Not just front end spectrum; telcos in India are also facing some backhaul constraints. Spectrum in the E-band and V-band is seen as a crucial backhaul option as the operators plan to modernise their existing 4G networks with 5G ready technologies. However, this spectrum is yet to be released by the government.

According to a recent GSMA Intelligence report [2], mmWave in India can offer opportunities in enhancing mobile broadband (eMBB) and fixed wireless access (FWA). In order to maximise the socioeconomic benefits of mmWave enabled 5G, the Indian government should consider providing timely access to the right amount and type of affordable spectrum, under the right conditions. This will ensure they are able to deliver the low-latency, high speed and high capacity capabilities of 5G.

Boost in Digital Infrastructure: Currently, India has the second largest pool of internet users but lags behind Asian peers like Korea, Japan and China in terms of fibre connectivity. It is believed that if the state governments facilitate RoW (Right of Way) to roll out digital infrastructure, it could not only accelerate the economic progress of states but also make them competitive and help realise various initiatives such as generating jobs, education, healthcare and smart cities.
Services beyond Core: According to a recent study conducted on major operator groups by GSMA Intelligence, services beyond traditional core contributed to approximately 22 per cent of total revenue, which is mainly driven by PayTV accounting for 28 per cent of non-core service revenue. Currently, when traditional services in India (accounting for more than 90 per cent of total revenues) aren’t expected to drive further growth, new (non-core) services can hold promise for better opportunities. Operators are already collaborating with vendors to provide enterprise solutions, such as Airtel recently partnering with Cisco to provide a wide range of cutting edge security solutions to its business customers as well as government entities.
Cross-sell fixed services: Digital dependence in terms of entertainment OTT apps, gaming, educational tech along with health tech is very evidently on the rise. To achieve higher ARPU, operators are already bundling their mobile services with OTT apps, but the converged players now need to provide reliability and high speeds that in India can be served by fixed networks. Converged players need to aggressively cross-sell their fixed services to meet growing demand.

It is clear the Indian telecom market has held up fine till now but there is a lot that needs to happen for the sector to not only survive but thrive in this economic crisis. LTE networks are already overburdened with rising data traffic demand. If the traffic is not diverged towards fixed network assets or additional spectrum is not made available, then operators could find it difficult to keep up with demand. Clearly, government has to be the facilitator while telecom operators and other players invest and create an infrastructure backbone. With the rise in demand for data and content, there will also be pressure on the market to  drive 5G momentum in the coming years.

– Divya Bhargava – Delhi team lead, and Pranika Chauhan – research analyst, GSMA Intelligence

The editorial views expressed in this article are solely those of the author and will not necessarily reflect the views of the GSMA, its Members or Associate Members.

[1] https://www.mobileworldlive.com/wp-content/uploads/2020/11/ib2.jpg
[2] https://data.gsmaintelligence.com/research/research/research-2020/the-impacts-of-mmwave-5g-in-india

Intelligence Brief: How has the Indian mobile sector survived Covid-19?

The outbreak of Coronavirus (Covid-19) has impacted almost every country across the globe and India is no different. In fact, for the last two quarters, India had been among the top 10 most affected countries in terms of infections and deaths. Stats for the Indian telecom market, however, suggest it has remained on a stable footing; in Q2 2020, among the top 10 most affected countries, eight reported a negative mobile revenue growth (year-on-year basis). India and Brazil were the only two countries to report positive mobile revenue growth.

Revenue growth is important, but only one part of the story. Let’s have a quick look at some of the key metrics to identify the overall impact:

Revenue and ARPU: Indian telecom operators reported strong growth in revenue during the quarter ended June 2020, thereby defying the economic slowdown from the countrywide lockdown of 68 days through the end of May. Together commanding a subscriber market share of more than 60 per cent – Reliance Jio and Bharti Airtel witnessed a strong ARPU uplift and an annual positive revenue growth of 33.7 per cent and 14.7 per cent respectively. On the other hand, Vi (earlier known as VodafoneIdea) reported a revenue and ARPU quarterly decline of 9.3 per cent and 6 per cent respectively during the quarter, mostly due to the existing debt.
Lower churn levels: Jio reported a strong wireless gross addition of 15.1 million (36.4 per cent increase on y-o-y basis) despite Covid-19 related restrictions across the country, owing to the increase in demand for data and heavy reliance on 4G networks in India. Monthly churn rates reached all-time lows in last 5 years, owing to the retail store closures. Bharti Airtel and Vodafone reported churn at 2.2 per cent and 2 per cent respectively during the quarter ended June 2020.
EBITDA/EBITDA Margin: The leading two telecom operators, Reliance Jio and Bharti Airtel, reported an annual increase in pre-tax profit growth of 55 per cent and 35 per cent and margin growth of 4 percentage points and 6 percentage points respectively during the quarter ended June 2020, thereby defying the economic slowdown due to Covid-19.

It is evident from the above that Indian telecoms weathered the Covid-19 storm well, but the bigger question is “how?” What makes India different from other countries in the list?

The power of people and ubiquity – India’s demographic is very different from all the other most adversely affected countries. With a population of more than 1.3 billion people, India has a huge market base which helped cushion the overall impact of the crisis. LTE subscribers in India rose around 26 per cent year-on-year to around 644 million by June 2020. This clearly shows India’s reliance on mobile phones for various reasons.
Low fixed penetration giving mobile a window of opportunity – According to TRAI (the Indian telecom regulator), of the 683 million broadband subscribers in India as of May 2020, 664 million were using mobile broadband and 19 million were on fixed broadband. The market witnessed quite a surge in its data traffic due to the nationwide lockdown and new norm of remote working. The pressure created from this massive shift from the normal practices to the digital ones was likely to fall upon the mobile networks because of the limited fixed penetration and insufficient fibre layout in the Indian telco market.
Tariff hikes translated into an incremental ARPU – The operators announced tariff hikes in the last months of 2019, immediately before the pandemic. These hikes were in the prepaid segment, accounting for nearly 90 per cent of India’s mobile subscribers. Now, the increased data traffic on mobile networks (see chart below, click to enlarge) resulting from Covid-19 combined with increased tariffs translated into growth in ARPU and Revenues. This explains how Indian telcos remained resilient during the COVID-19 storm.

[1]While it’s true that the Indian telco market has suffered less financial impact due to Covid-19 in comparison to other countries, uncertainty related to economic recovery of the country, pressure to meet ever increasing burden due to rising demand of data services, and competitive intensity still pose a great threat to the sector’s financial stability. So, how does the sector remain sustainable in the long term and deliver on the demands of the “new normal”? What steps/measures can aid operators?

More harmonised Spectrum: Due to the relatively limited extent of fixed infrastructure, the pressure from the extra traffic created by the shift to remote life is likely falling on the mobile network – primarily LTE. Satish Jamadagni, VP for network planning at Reliance Jio, recently claimed LTE cells in the country are at 90–98 per cent capacity, compared to other countries at 40–50 per cent capacity. This clearly shows the appetite for more 4G spectrum in India.

Not just front end spectrum; telcos in India are also facing some backhaul constraints. Spectrum in the E-band and V-band is seen as a crucial backhaul option as the operators plan to modernise their existing 4G networks with 5G ready technologies. However, this spectrum is yet to be released by the government.

According to a recent GSMA Intelligence report [2], mmWave in India can offer opportunities in enhancing mobile broadband (eMBB) and fixed wireless access (FWA). In order to maximise the socioeconomic benefits of mmWave enabled 5G, the Indian government should consider providing timely access to the right amount and type of affordable spectrum, under the right conditions. This will ensure they are able to deliver the low-latency, high speed and high capacity capabilities of 5G.

Boost in Digital Infrastructure: Currently, India has the second largest pool of internet users but lags behind Asian peers like Korea, Japan and China in terms of fibre connectivity. It is believed that if the state governments facilitate RoW (Right of Way) to roll out digital infrastructure, it could not only accelerate the economic progress of states but also make them competitive and help realise various initiatives such as generating jobs, education, healthcare and smart cities.
Services beyond ‘Core’: According to a recent study conducted on major operator groups by GSMA Intelligence, services beyond traditional core contributed to approx. 22 per cent of total revenue, which is mainly driven by PayTV accounting for 28 per cent of non-core service revenue. Currently, when traditional services in India (accounting for more than 90 per cent of total revenues) aren’t expected to drive further growth, new (non-core) services can hold promise for better opportunities. The operators are already seen collaborating with vendors to provide enterprise solutions, such as Airtel recently partnering with Cisco to provide a wide range of cutting edge security solutions to its business customers as well as government entities.
Cross-sell fixed services: Digital dependence in terms of entertainment OTT apps, gaming, educational tech along with health tech is very evidently on the rise. To achieve higher ARPU, operators are already bundling their mobile services with OTT apps, but the converged players now need to provide reliability and high speeds that in India can be served by fixed networks. Converged players need to aggressively cross-sell their fixed services to meet the growing demand.

It is clear that the Indian telecom market has been holding up fine till now but there is a lot that needs to happen for the sector to not only survive but thrive in this economic crisis. LTE networks are already overburdened with rising data traffic demand. If the traffic is not diverged towards fixed network assets or additional spectrum is not made available, then operators could find it difficult to keep up with demand. Clearly, government has to be the facilitator while telecom operators and other players invest and create an infrastructure backbone. With the rise in demand for data and content, there will be pressure on the market to  drive 5G momentum in the coming years.

– Divya Bhargava, Delhi Team Lead, GSMA Intelligence and Pranika Chauhan, Research Analyst, GSMA Intelligence

The editorial views expressed in this article are solely those of the author and will not necessarily reflect the views of the GSMA, its Members or Associate Members.

[1] https://www.mobileworldlive.com/wp-content/uploads/2020/11/ib2.jpg
[2] https://data.gsmaintelligence.com/research/research/research-2020/the-impacts-of-mmwave-5g-in-india