The tower industry is a derivative of the telecom service sector. 2009 witnessed tremendous growth in the sector owing to network rollout and coverage expansion by the greenfield and established operators, respectively. In the backdrop of this we asked few questions to India’s Largest Tower Company CEO DS Rawat of Bharti Infratel and Sudhir Prasad of TowerVision Private Limited.
How will the rollout of 3G and BWA services impact the telecom tower industry?
Sudhir Prasad: Low fixed-line penetration in India has been an impediment for the uptake of broadband services. Wireless broadband will bridge the gap and usher India to “broadband revolution”. To monetize the outlay on airwaves and capital expenditure, operators are expected to market data-rich services. Initially, the tower industry will benefit in terms of increased tenancies due to overlay in networks, resulting in additional revenues. However, with uptake of data services and congestion in the existing spectrum, the need for additional towers and anchor tenants would become inevitable. It is imminent for the tower companies to innovate and make the business case viable for operators to ensure long-term sustainability.
DS Rawat: 3G/BWA service rollout is expected to be an add-on cabinet (cabinet expansion), as a result of the existing passive infrastructure across the densely populated areas of the country. Initially, the rollout of these services will result in additional revenue only through incremental base stations, with operators adding another base transceiver station in the existing towers. However, once the data usage begins to swell in the long term, the service providers are expected to enhance the network and coverage for these services. 3G and BWA operate at higher frequency bands, and an increased demand for a better spread of services will necessitate the need for more tower sites and tenancies to ensure coverage across the country.
What will be the impact of changes in technology on the tower industry? For example, Long Term Evolution (LTE) equipment is a lot smaller, consumes a lot less power and may not need 30-meter towers
Sudhir Prasad: Being late to the game, Indian service providers have a huge advantage in that they can benefit from technological maturity and greater economies of scale. The new technologies will bring some efficiencies in terms of power and space usage. The technological upgrade would be an overlay of existing networks, resulting in additional access revenue for the tower industry. As the Indian telecom industry takes a generation leap in technology, we are going to witness the most challenging yet innovative times ahead.
DS Rawat: The telecom industry in India is set to undergo a phase of transformation with the arrival of the next-generation technologies such as LTE. The initial impact will be similar to that of 3G, resulting in incremental tenancies followed by additional towers as the demand of high-speed data goes up from the end users. Going further, the center of attention will shift toward in-building solutions and microcells, which primarily focus on dedicated indoor coverage. Thus, the overall impact of technology advancement is likely to be a positive for the tower industry.