India touches the Tipping Point in the Telecom Sector Survival mantra is Quality & Performance

By VARINDIA - 2019-04-20

India touches the Tipping Point in the Telecom Sector Survival mantra is Quality & Performance

S Mohini Ratna
Editor, VARINDIA


India is the world's second-largest telecommunications market in 2019. Technology product managers will have to get more strategic with their portfolio mix by balancing products and services that will post growth in 2019 with those larger markets that will trend slower growth. The worldwide IT spending is projected to total $3.79 trillion in 2019, an increase of 1.1 percent from 2018, according to the latest forecast by Gartner.

 

This reflects in India with the consolidation of the ever growing telecom sector, with the merger of two telecom giants - Vodafone and Idea Cellular with 387 million subscribers across the country. It plans to extend its 4G network to over 80 percent of Indian users, wireless service mapping company. India’s remaining operators are now seeking other ways to differentiate their services rather than undercutting each other.

 

With this consolidation happening in the industry, the focus is already shifting towards service quality, whereas, both Airtel trio (Airtel-Telenor and Tata Tele services) and Vodafone Idea talking up their 4G network improvement plans. At the same time, Jio has gone one step ahead with a pledge to bring 5G to India before its rivals.The rise of Jio to 300 million subscribers base has been the standout story in India’s mobile market in recent years, with the growth of its 4G availability to 97.5 percent - the highest national score we have ever recorded.During the same time Airtel showed the greatest growth in this category, as its average score jumped by over 10 percentage points to cross 85 percent.

 

The merger of state-run PSUs, BSNL and MTNL have the potential to increase the overall valuation and make the merged entity financially stronger to compete with private telcos in the country.The merger will help both companies to become leaner and thereby significantly bring down their capex and opex.

 

India has only three private players in the telecom industry, i.e. Airtel, Vodafone, Jio and the fourth telecom PSU - BSNL and MTNLare struggling to sustain themselves in a highly competitive market. Now, we can expect the trend to reverse with a 7% revenue growth in 2020 fiscal, owing to an expected increase in average revenue per user (ARPU) by 11%.

 

A recent report from Deloitte has estimated that the total investment required to cover India with 5G would be a staggering $70 billion - partly because the country lacks widespread fibre backhaul infrastructure necessary for high-capacity networks. However, the 4G subscriber count will go up to 432 million in India by 2020,

 

Lastly, all eyes are on the growth of rural markets to add subscribers, given low tele-density.




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