Given that the Indian telecom industry is witnessing a major surge in data traffic, significant growth opportunities have emerged for tower companies. With its extensive presence across the country, Viom Networks is well-positioned to capitalise on these opportunities. In an interview with tele.net, Syed Safawi, chief executive officer, Viom Networks, talks about the tower industry, the company’s business strategy and future plans. Excerpts…

What is the technology mix (2G, 3G, 4G) of Viom Networks’ tower portfolio and what is its tenancy ratio?

Viom Networks has a national tower portfolio of over 42,000 sites, with more than 100,000 tenancies and a tenancy ratio of 2.4, which is the highest in the industry. We have more than 11 per cent share of the total number of towers and close to 15 per cent share of tenancies in the tower industry. Viom Networks is a leading independent telecom infrastructure company and has a strong market position. By focusing on quality growth, it has garnered a solid market share in 2G, 3G and 4G stand-alone tenancies. While voice and data over 2G technology is still the mainstay for the telecom industry, a progressive shift is being driven by data over 3G technology, the usage of which increased by 114 per cent in 2014-15 over that in the previous year. Now with telecom operators increasing their focus on 3G and 4G technologies, they are witnessing healthy data traffic growth. As a result, Viom’s 3G and 4G tenancies are increasing rapidly and will double in 2015. It is likely that in another three years, they will equal the company’s 2G tenancies.

What are your expectations with regard to consolidation in the telecom industry?

In order to deliver services to close to a billion telecom subscribers, the industry has one of the highest number of telecom operators per circle. As the telecom market in India matures, it will move towards a scenario wherein each circle will have only five to six operators providing quality services, although a couple of operators may retain a regional presence. Industry consolidation will also enable better utilisation of spectrum, thereby leading to superior voice delivery and enhanced data transmission.

At another level, consolidation among tower companies aimed at deriving economies of scale will eventually set in. This will lead to the formation of two to three larger tower companies that would subsume entities with less than 30,000 towers.

What has been the impact of spectrum shortage on telecom services? What measures are being taken to address the quality of service issues faced by users?

The country is on the cusp of a data revolution and many of the existing sites, primarily in dense urban areas, are expected to exhaust their data capacity, resulting in a need for additional sites. India being a spectrum-scarce country, more sites are required to provide adequate capacity across technologies. Growth in data traffic is not just limited to Tier I cities, but will also come from Tier II and Tier III cities. Smartphone penetration in Tier II and Tier III cities will also be a key driver of data traffic  growth.

As a telecom infrastructure solutions provider, Viom Networks is leading the way in coming up with innovations such as lite-anchor sites, which are enabling operators to establish their presence with a significant reduction in capital expenditure. As a result, operators are able to increase their presence through the rapid establishment of towers in both congested urban sites and remote rural locations in order to overcome spectrum constraints. Getting approvals for the installation of new towers continues to be a challenge for the industry. However, with a concerted effort by the industry, supported by conducive policies and close coordination with central and state bodies, the challenges in the way of tower deployments can be dealt with.

How has the uptake of in-building solutions (IBSs) been in India? What are the key challenges in its growth?

Mobile towers in India are handling a surge in cellular traffic as operators upgrade their networks to gear up for a new generation of bandwidth-hungry smartphones and tablets. Some of the anticipated growth may come from additional users and more connected devices, but most of it is expected to come from an increase in traffic per connected device, as users demand more and more wireless bandwidth. The new traffic translates into soaring growth prospects for tower operators.

Industry reports project wireless network traffic to grow ten times over the next five years, with around 75 per cent of this growth expected to be delivered over traditional macro sites, primarily towers. IBSs, distributed antennae systems (DASs) and other small cell installations are projected to support the remaining 25 per cent. With over 70 per cent of data consumption in urban India taking place indoors, IBS in the form of micro-cellular technologies such as pico cells and femto cells, which create small-footprint cell sites within buildings, enable more effective coverage inside premises. With the growing demand for anywhere connectivity, IBS is gaining traction. Operators use DAS and/or IBS to address issues related to poor wireless reception in indoor environments. In line with market dynamics, Viom Networks is offering integrated data solutions and IBSs while using the existing towers as core assets and building the network around them.

What has been Viom’s approach to handling the exponential growth in data traffic in metros and Tier I cities?

Between 2009 and 2014, the 3G subscriber base grew at a compound annual growth rate of 144 per cent. Almost 10 per cent of all mobile subscribers in India are 3G subscribers. In the case of 4G services, the number is already inching towards half a million. Led by increasing network coverage, falling data prices and the shift in customer preference towards higher connection speeds, both 3G and 4G subscriptions are expected to grow substantially.

Viom Networks is present across all the major cities in India, including the metros and Tier I cities, which are witnessing a data boom. In fact, year-on-year 3G traffic is doubling in major cities across India. As the preferred partner for telecom operators in India, our site locations offer customers the strategic advantage of plugging gaps in the form of urban in-fill sites which are critical to providing a seamless data experience for subscribers. As a result of the focused network planning approach we employ for our sites, our towers are optimally loaded with tenancies.

Increasingly, it is felt that without “fiberising” the backhaul for towers, it will not be possible to cater to the demands of high speed data connectivity, given that we are focused on national programmes such as Digital India and Smart Cities. Therefore, we will continue to encourage the industry to create fibre networks with mobile towers providing last-mile connectivity.

What measures are being taken to address the growing concerns regarding the electromagnetic field (EMF) radiations from telecom networks?

From time to time, it has been reiterated by local, central and global authorities that the radiation limit in India is one-tenth of that in the foreign markets. The stringency of the radiation norms in India compel telecom operators to adhere to the government’s regulations, thereby ensuring that civil society is not subjected to health hazards. Although tower companies provide only passive infrastructure support and do not own or operate electronic equipment that fall under the category of radiating instruments, they have installed public information notices across all their tower sites as per the TERM Cell guidelines of the Department of Telecommunications (DoT) on behalf of telecom operators.

The Ministry of Communications and IT has gone on record to dispel fears about the health impact of EMF. In addition, DoT and the World Health Organization have both stated that the impact of EMF through the electronic radiating equipment owned and operated by cellular operators are within stringent permissible limits and pose no health hazard to people at large. Through the Tower and Infrastructure Providers Association, tower companies are in continuous awareness-building engagement with various constituents of civil society, including resident welfare associations to understand their perspective and create awareness amongst them.

What level of investments is Viom looking at for data offloading technologies?