How Tata can regain the telecom market in India

India Telecommunication market has huge potential due to various factors

  • With a subscriber base of nearly 1,210.71 million, as of July 2017, India accounted for the 2nd largest telecom network in the world.
  • With 431.21 million internet subscriber, as of June 2017, India stands 2nd highest in terms of total internet users
  • Mobile based Internet is a key component of Indian Internet usage, with 7 out of 8 users accessing internet from their mobile phones
  • Since 2012, the share of time spent on watching videos on mobile devices has grown by 200 hours a year
  • As of July 2017, urban tele-density stood at 173.21 per cent and rural tele-density at 57.45 per cent

However, Indian telecom sector’s revenue grew [surging] at a CAGR of 7.31 per cent from US$ 19.6 billion in FY06 to US$ 42.6 billion in FY17. During Q1 FY18, gross revenues of telecom sector in India reached US$ 9.9 billion. [also read – Telco’s revenue growth over last few years is not promising]

As of July 2017, Bharti Airtel was the market leader, with a 23.70 per cent share in the wireless subscription, followed by Vodafone (17.74 per cent share). As per media news of Tata Teleservices exit of telecom business has constructed by merger of mobile business and some portion of spectrum liability will boost additional 3.55% subscription and will continue to dominate the wireless segment. Tata has invested around US$16.38 million to convert its 10,000 base stations from indoor to outdoor to reduce energy consumption and carbon footprint across its 20 telecom circles in India so far [also read – What should Telecom companies learn from Facebook ’10 year technology roadmap’]

Likewise, in the fixed line subscription – BSNL dominates the subscription but revenue from this segment shrinks overall.

Tata Tele also has huge debt burden of Rs 30,000 crore and with factors like a) Bargaining power of suppliers b) Competitive Rivalry c) Bargaining power of Buyers – How can Tata Group focus to regain the telecom market in India.

Here are the few focus areas that leaders should have been concentrating on

Incomes have risen at a brisk pace in India and will continue rising given the country’s strong economic growth prospects. According to National Telecom Policy 2012; the report mentioned about enabling provision in regulatory framework so that existing cable TV networks are optimally utilized for extending high quality broadband servers in rural areas also. Today, India’s broadband connectivity flows predominantly from the mobile sector. But wireless spectrum here is scarce, very crowded and extremely expensive. Data requirements, which are spectrum-hungry, are rising exponentially and expected to be 7 to 10 times higher by 2020. For Tata Sky, this could be the opportunity to cast a wider net, especially with phases three and four of digitisation, where many cable-dark and broadband-dark territories could be reached. By packaging broadband and DTH services, the company could have an edge over its competitors.  It could also give Tata Sky an edge over DD Free Dish, the DTH service of the public broadcaster, which has been attracting consumers with its extremely competitive pricing.

IoT is the concept of electronically interconnected and integrated machines, which can help in gathering and sharing data. The Indian Government is planning to develop 100 smart city projects, where IoT would play a vital role in development of those cities. ‘Tata Communications has successfully deployed the first IoT dedicated network in several major cities across India using the LoRaWAN (Long Range Wide Area Network) technology. Our partnership with Semtech and HPE has resulted into a cohesive, resilient and highly-secure network to deploy IoT applications in India. Tata Comm have successfully conducted 35 proof-of-concept application trials on IoT network.

New telecom policy that is expected around March 2018. The Department of Telecom (DoT) has started working on the new National Telecom Policy (NTP), for which it has created working groups to deal with various aspects, and a draft policy will be ready by the year-end. The expectations in these policy includes cloud, security, M2M, Artificial Intelligence, 5G & IoT. [also read – Internet of Things: Opportunities to monetize] Tata Communications already well established on Cloud & Security portfolio in India. Now with Tata Tele’s enterprise business along with Tata Communications enterprise business – there can be synergy to work closely with customers to expand the customer base. According to press, Tata Communications is putting its money where its mouth is, investing in AI, including Sentient, and working hard to understand it, while educating others, as shown by this summit,” Mr Dean says at  CEO Summit 2016

DISCLAIMER : Views expressed above are the author’s own.