With over 15 million wireless subcriber additions per month, the elecom sector promises huge opportunities for vendors in the transmission segment. During the period 2007-08 to 2008-09, the transmission equipment market in India grew by 54 per cent from Rs 19.5 billion to Rs 30 billion. This growth rate is expected to be maintained over the next three to five years.

Over the past few years, the demand for transmission systems has been driven primarily by private operators looking to establish pan-Indian networks. Though copper has been the conventional transmission medium, over time, the telecom landscape has transformed significantly.

Not only are existing players looking to modernise their transmission networks and migrate to IP-based networks and packet-based transport delivery platforms, but new players have also entered the field, looking to set up new transmission systems as well as share transmission system infrastructure. With the impending launch of 3G and Wi-Max services on a large scale, mobile operators are investing in upgrading and enhancing the capabilities of their transmission systems and deploying optic fibre-based transmission networks.

Expansion and network rollout

For 2009-10, almost all players have chalked out hefty capex plans for maintaining and upgrading their transmission infrastructure. According to industry sources, existing mobile operators are likely to invest more than $12 billion in their networks by 2010. This includes putting in funds for extending their optic fibre transmission networks. For instance, Idea Cellular aims to have 45,000 route km of optic fibre by the end of this fiscal year from the current 38,000 route km.Similarly, Aircel proposes to increase the reach of its network to 25,000 route km from 10,000 route km.

Meanwhile, CDMA players like Tata Teleservices Limited (TTSL) and Reliance Communications (RCOM) are rolling out GSM networks and investing in transmission equipment for the same. For its nationwide GSM launch, TTSL has already started ordering equipment for its core and transmission networks from Nokia Siemens Networks (NSN), Huawei, NEC, etc. The company is also renewing its optical transmission network and has given Alcatel-Lucent a seven-year contract for implementing an optical multi-service node solution for the same. The equipment will enable the deployment of a wide range of applications including data communications, voice, imaging, video and multimedia services.

Meanwhile, new entrants are taking advantage of the government's April 2008 ruling permitting telecom players to share transmission systems. For instance, Datacom Solutions has signed a 10-year infrastructure-sharing deal with TTSL, according to which TTSL will provide transmission services to the former. Etisalat DB and RCOM have entered into a similar deal.

Advent of 3G

The launch of 3G and Wi-Max services also presents future opportunities for transmission vendors. The advent of 3G will make it much more important for operators to roll out fibre-based transmission networks, which have the high bandwidth capabilities necessary to support 3G applications. Internationally, the rollout of 3G networks has fuelled the demand for transmission bandwidth. In India, Bharat Sanchar Nigam Limited has outlined investment plans worth around Rs 27 billion for rolling out 3G infrastructure in all district headquarters and important commercial towns, in 700 cities across north and east India.

According to key telecom operators, 3G will be introduced first in the urban areas and due to the high quantities of bandwidth required, the intra-city transmission capacity will require upgrades. Wavelength division multiplexing, which has hitherto been deployed in long distance backbone networks to create bandwidth capacity, will need to be deployed within big cities too.

3G is also likely to increase the demand for bandwidth from rural areas due to the addition of many rural-based data applications and content. In this case, the transmission medium in demand is likely to be a mix of fibre with microwave as the last mile.

Rural growth

For the next level of growth, telecom service providers are increasingly looking towards the rural areas. However, a big bottleneck in achieving comprehensive rural connectivity is the lack of sufficient backhaul capacity to integrate the voice and data traffic from the operators' core network. While most private operators have implemented an optic fibre cable network up to the district headquarters, connectivity between the district and block headquarters is deficient. In view of this, the Department of Telecommunications (DoT) has asked operators to share fibre network infrastructure to avail of subsidy under the Universal Service Obligation (USO) Fund.

More microwave deployment will also be involved to push services into the rural areas. Sites that are difficult to connect by microwave due to their remoteness will need satellite connectivity. The rural push will also incentivise tower/transmission sharing amongst operators in order to optimise costs.

Recently, RCOM and Bharti Airtel announced plans to improve links between the north-eastern parts of India with the rest of the country by deploying terrestrial optic fibre routes through Bangladesh. In this regard, the two operators have submitted a joint proposal to the Bangladesh Telecommunication Regulatory Commission, seeking a corridor through Bangladesh to reach India's isolated north-eastern region. At present, the north-eastern states receive telecom services through very small aperture terminals at very high prices.

Increased broadband penetration

The growing demand for broadband services in India is also fuelling the demand for new transmission infrastructure. The deployment of broadband and IPTV has resulted in a significant increase in network traffic due to which many operators are investing in SDH, and WDM-based solutions. For providing better internet access across the country, private telecom companies like Singapore Telecommunications (SingTel), British Telecom (BT) and Bharti Airtel have sought alliances with state-owned Power Grid Corporation of India Limited (PGCIL) and RailTel for using their extensive transmission networks.

Utility firms such as PGCIL are able to offer broadband connectivity at cheaper commercial rates as their optical infrastructure is readily available and is laid overhead on their extra high voltage power transmission lines.

Thus, Powertel, the telecom unit of PGCIL, is in discussions with global telecommunication majors such as SingTel and BT for leasing out broadband capacity on its optic fibre network. The Delhibased power transmission major has 21,000 km of optic fibre network and, in the next two years, intends to add another 10,000 route km. It is also in talks with a number of television channels for providing its network for video streaming facilities. The company will offer its optic fibre network mounted over its overhead transmission network to provide the required bandwidth to television companies to air their video content.

Moreover, providing a further boost to the setting up of transmission networks for broadband in rural areas, DoT has invited bids from private telecom operators to set up wireless broadband infrastructure in rural areas. These operators will be allocated funds from the USO Fund based on a competitive bidding process.

Challenges

However, in spite of the opportunities before it, there are still many important issues that need to be ironed out for the Indian telecom transmission industry to grow and expand.

Right of way

In spite of the numerous advantages of laying optic fibre cable, the process meets resistance in cities due to the very high right-of-way (RoW) charges levied by local bodies. According to key telecom operators, obtaining RoW clearances is an extremely time-consuming and cumbersome process.

Service outages

Due to the massive highway expansion programme being carried out across the country (involving road-widening works etc.), over the past decade, the existing optic fibre cable alignments are getting adversely impacted, resulting in service outages. Telecom operators are trying to cope with this by creating more redundant transmission paths and employing automatic service restoration capabilities for addressing multiple simultaneous optic fibre cable cuts. However, road authorities need to implement a standard user duct policy.

Choosing the right technology

For operators, a cost-effective scalable transmission solution is the key to additional revenue. However, with transmission equipment vendors proposing different solutions, it is difficult for operators to zero in on the right choice of equipment. In addition, most standards are not frozen and issues of compatibility and interoperability are yet to be resolved.

Coping with 3G

Although 3G services present a significant opportunity for the transmission industry in the country, deploying the same will be a challenge for operators since most of their existing transmission infrastructure is currently legacy based. Thus, 3G networks must be designed to optimally utilise the existing resources. This will be difficult due to the huge capacity upgrades that will be necessary.

For instance, a single GSM connection requires 13 kbps while a GPRS connection uses 60-80 kbps, but 3G can utilise up to 348 kbps. 3G upgrades such as HSDPA can offer 14.4 Mbps per user, which is a giant jump in terms of technology. One user would potentially use the same capacity as 1,000 GSM subscribers.

Migration to NGNs

In the above scenario, the migration to next-generation networks (NGNs) which enable high speed packet transport, is inevitable. The current network infrastructure is not adequate for offering advanced services such as 4G mobile (long term evolution). However, this comes with its own set of hurdles. On the one hand, operators must support and cater to the growing capacity demand while on the other, they must also maintain existing infrastructure investments. Going forward, operators must ensure that their networks are as future-proof and scalable as possible so that they can upgrade their equipment at their own pace rather than fork-lift solutions that make previous investments redundant.

Looking ahead

There are, no doubt, several issues that need to be resolved. Those issues dealt with, the transmission industry is slated to grow further with telecom operators increasingly investing in setting up and renewing their transmission infrastructure.