Ranjan Banerjee, Head of Strategy, MTS India shares his views on the prospects of the Indian Telecom Industry in 2015...

Voice revenues have stabilised; growth in data revenues:

If we look back at the year gone by, we can see that the voice revenues have grown by around 8 per cent, while the non-voice revenues have grown by 35 per cent. Today, the growth is happening in the data segment and the industry is fully aware of its potential. At present, most operators are concentrating on data business and are rolling out services and plans, especially, targeted at the data customers in the country.

Looking at the way the Indian market is poised at the moment, we are seeing growth in not just the number of data customers but also the amount of data being consumed. The data revenues today are contributing over 14 per cent of the total revenues for the major operators in comparison to 9 to 12 per cent in the previous year. Also, the 3G subscriptions have grown from 33 million in December 2013 to nearly 60 million now. This goes to show that the market is warming up for 3G data services.

Improving profitability of telecom sector:

The telecom sector in India continues to be under huge debt. In fact, no telecom operator in the country has ever declared any dividend. Having said this, the revenues for the sector have started to improve now. However, the health of the telecom sector can improve a lot faster if regulatory policies, which ensure a level playing field, are implemented with a long-term view.

Regulatory environment in the country:

When it comes to the regulatory environment of the country, MTS India is in synchronisation with the position of the various industry bodies which have expressed the view that not much has changed on the ground, when it comes to the telecom sector. Issues like spectrum auctions, its fair pricing along with other aspects like spectrum sharing and trading policy still need more clarity. However, one remains hopeful that all such issues will be addressed in the coming year.

Criticality of spectrum auction specially 800 MHz and its expected impact on the consumers: 

For MTS India, the most critical part is the proposed auction of spectrum in the 800 MHz band.  In that regard, the company is disappointed with the recommended reserve price of the spectrum in 800 MHz band as it is not in sync with the business and ecosystem realities.  The proposed pricing of Rs 36.46 billion per MHz is way out of line and does not merit a strong business case for buying spectrum in the said band. If such a pricing framework is implemented, then it would be seen as going against the spirit of Prime Minister’s vision for Digital India and broadband for all. One would also like to add that at such a price, one would not find any takers for the frequency airwaves in the 800 MHz band in the 2015 auctions, given that this price has also been previously tested in the market, way back in November 2012. MTS India would urge the Government to rethink on the spectrum price for the 800 MHz band and bring it at par with the market discovered price of the 1800 MHz band.

Rollout of 4G services in India

One has to understand that 4G is an evolutionary technology and not a revolutionary technology. If one takes an example of data advanced countries like Japan, the 4G networks are deployed to de-congest the 3G networks. While some operators in the country today are launching 4G services, the 4G device ecosystem is not mass ready yet and hence, it will impact the growth of 4G in the country in the near future.

Technology to look out for in 2015

The technology to look out for in 2015 will be Internet of Things (IoT) which will start becoming more relevant with government initiated projects like ‘Smart Cities’. Also, on the network side, one expects to see a lot more Wi-Fi network deployment and new initiatives on the side of content delivery network (CDN).