Over the past six months, the government has been locked in a bitter
tussle with India's telecom operators over what has become a terrible
everyday nuisance — mobile phone calls that suddenly disconnect or are
inaudible.
The government squarely blames operators for the problem of call drops, accusing them of failing to optimise their networks to keep up with the rapid rise in voice and data traffic. RS Sharma, the chairman of the regulator Telecom Regulatory Authority of India (Trai), even accused operators of tuning their networks to cater to the lucrative data segment, which was creating scarcity in the voice segment. The telecom industry has rejected these charges, saying inadequate wireless airwaves, or spectrum, and the challenges in installing telecom towers, which host radio signal transmitters, due to red tape, indiscriminate sealings by civic bodies and concerns about harmful radiation are the real culprits straining their networks.
Matters came to a head last October, when Trai ordered telecom companies to pay consumers Rs 1 for every call dropped on their networks, limited to three a day from January 1, 2016. Telecom industry associations challenged the regulator's directive in the Delhi High Court and the case is being heard.
So who is telling the truth here?
The Tower and Infrastructure Providers Association (TAIPA), a group representing tower companies such as Indus Towers, Viom Networks, Bharti Infratel, American Tower Corp, GTL, Reliance Infratel and Tower Vision, in a written response to ET's queries, said the installed number of towers as on March 31, 2014 was 4.21 lakh. Deloitte Haskins & Sells LLP, a consulting firm, pegged the pan-India base of mobile towers as on March 31, 2015 at 4.39 lakh while AT Kearney, a telecom consultancy, said the current number is roughly 4.5 lakh.
Insufficient Numbers
In other words, around 29,000 mobile towers were added across India over the past 22 months, according to these estimates.
This is a grossly inadequate number when weighed against the huge rise in the number of mobile subscribers, according to telecom analysts and industry experts. In the past two years, the number of mobile phone users (on both GSM and CDMA technologies combined) in India rose to a shade over 1 billion from 886.3 million, according to data collated by Trai.
Telecom towers are structures that host base transceiver stations (BTSs), popularly known as base stations or cell sites. It is base stations that send and receive radio signals from a mobile phone.
"We definitely need many more towers, and estimates vary between 1 lakh and 2 lakh," says Mahesh Uppal, director of Com First (India), a consultancy dealing in telecom regulatory affairs.
Hemant Joshi, partner, Deloitte Haskins & Sells LLP, attributes the slow growth of telecom towers to "only a few independent tower companies" adding new towers. Only, "8,000-10,000 new towers were added in the last six months", according to him.
The future too looks grim given how telecom subscriber growth is still running on steroids. The number of mobile users in India is projected to grow to 1.3-1.4 billion in the next five years.
One plausible reason for the tepid increase in the number of towers could be that they cost an arm and leg for companies to set up. A typical ground-based tower can cost Rs 40-50 lakh whereas a shorter rooftop variant would cost Rs 20-25 lakh apiece.
Telecom operators found a way to beat this problem. They began to share towers.
Tower sharing became popular as it allowed operators to not only cut costs, but also focus on marketing their services. It also enabled players to speed up network rollouts and launch mobile services faster.
Mobile tower-sharing took off in a big way in India between 2007 and 2012, when the number of towers rose steadily from around 1 lakh to 4.07 lakh.
But things began to taper in recent years. TAIPA director general TR Dua says the situation has worsened in the last six-to-seven months because of a sharp increase in tower installation costs.
According to Dua, local authorities and resident welfare associations have started treating tower installations as a "pure revenue maximisation tool" by demanding huge deposits and imposing hefty levies under various heads. This, he says, has made the "whole business of adding towers for sprucing up mobile coverage and arresting call drops a daunting task". The government is not convinced. Telecom minister Ravi Shankar Prasad recently said in Parliament that there was a sharp uptick in the number of towers built in the past six months after it revealed plans to fine operators in June 2015.
Operators and tower firms declined to reveal the number of tower additions across India since June. Uppal says the issue "is not merely the number of new towers (added) per se, but whether they came up in places where the call drop problem is most acute".
A turtle chase
In a recent technical paper analysing the call drop problem, Trai said besides towers, the growth of BTSs had also "not kept pace with the growth in mobile subscriber base", which compounded the problem.
A base station, which resembles an electronics box and mounted on a tower, is what actually enables a call at the local mile. A large number of towers together form a mobile network.
Mohit Rana, partner at AT Kearney, says metros like Delhi (including, Gurgaon and Noida) or Mumbai would "typically require a mobile operator to set up 3,000-6,000 base stations, depending on spectrum available and traffic requirements", to ensure decent coverage while "large tier-2 cities such as Pune, or Hyderabad would need only 1,000-2,000 towers" each.
Some operators appear to have done their bit here. Vodafone India has over 12,500 and 5,000-plus BTSs in Delhi and Mumbai respectively and 2,900 in Kolkata, where the requirement is less. Idea Cellular, India's third largest operator by subscribers, has around 8,200 BTSs in Delhi, of which nearly 5,000 are dedicated to 2G, and the balance for 3G, according to a person aware of the matter.
However, TAIPA's Dua says it is "impossible to quantify" the number of mobile towers or base stations needed to cover a specific number of subscribers because these numbers also depend on network frequency and the quantum of spectrum in a location. For instance, a mobile network running on the 1800 MHz band would require 2.8 times the number of base stations required for a 900 MHz mobile network, which is the more efficient band, to provide a similar coverage experience.
Cellular Operators Association of India (COAI), the lobby representing India's biggest carriers such as Bharti Airtel, Vodafone India, Idea Cellular and newcomer Reliance Jio Infocomm, among others, disputed Trai's claim on BTSs. COAI Director General Rajan Mathews says its members had added 93,000 cell sites across India since January 1, 2015, of which, 23,000 additions happened between June 1, 2015 and January 1, 2016.
But Deloitte's Joshi says if the number of BTSs has increased, it is a result of rising tenancy — the number of mobile operators putting up radio gear on one tower. "Increasing the tenancy of towers is also comparatively less complex that adding new towers," says Joshi.
Mobile towers are technology-agnostic and can cater to all technology platforms, be it 2G, 3G or 4G. Syed Safawi, CEO of Viom Networks, says regardless of network load, BTSs can simultaneously handle voice, or 2G, and data, 3G/4G, traffic, but how an operator programs the usage of spectrum bands for voice or data, and how much is dedicated to each usage can vary.
This could mean there is a grain of truth in the accusation of Trai's Sharma of operators tuning their networks towards data. Data is more profitable for telecom operators. Market leader Bharti Airtel's September quarter earnings reveal that data accounted for more than a fifth of its mobile revenue in India. The company's data ARPU (average revenue per user) for India during the period grew to Rs 193 while the voice ARPU in India fell to Rs 140. Voice and data ARPU are key performance indicators of a company.
AT Kearney's Rana says in the past one year, traffic and network (growth) has been driven by 3G and 4G BTS additions, most of them on existing towers. "Data is crowding out some of the voice capacity."
Trai has urged operators, which are using a portion of their recently won spectrum on new data technologies, to rebalance voice traffic to avoid aggravating the call drop problem.
COAI's Mathews does not contest this. Operators were compelled to look at 3G and 4G technology amid rising data consumption, especially since 40-45% of the phones in the market are smartphones, according to him. He says there will be a sharp increase in new tower installations with India's biggest telecom operators ramping up their 4G networks, especially since "4G requires 30% more towers than 2G to meet both coverage and capacity requirements".
Deloitte's Joshi expects the number of "2G, 3G and 4G base stations to increase by a CAGR of 14% and the number of towers to register a 2% CAGR over the next 5 years".
This growth too would be inadequate given that India is likely to have around 300 million more mobile phones users in the period (9,000 more towers for an additional 300 million users).
There is another crucial question. As those towers will still be heavily skewed towards data, can users hope to have an end to interrupted conversations?
The government squarely blames operators for the problem of call drops, accusing them of failing to optimise their networks to keep up with the rapid rise in voice and data traffic. RS Sharma, the chairman of the regulator Telecom Regulatory Authority of India (Trai), even accused operators of tuning their networks to cater to the lucrative data segment, which was creating scarcity in the voice segment. The telecom industry has rejected these charges, saying inadequate wireless airwaves, or spectrum, and the challenges in installing telecom towers, which host radio signal transmitters, due to red tape, indiscriminate sealings by civic bodies and concerns about harmful radiation are the real culprits straining their networks.
Matters came to a head last October, when Trai ordered telecom companies to pay consumers Rs 1 for every call dropped on their networks, limited to three a day from January 1, 2016. Telecom industry associations challenged the regulator's directive in the Delhi High Court and the case is being heard.
So who is telling the truth here?
The Tower and Infrastructure Providers Association (TAIPA), a group representing tower companies such as Indus Towers, Viom Networks, Bharti Infratel, American Tower Corp, GTL, Reliance Infratel and Tower Vision, in a written response to ET's queries, said the installed number of towers as on March 31, 2014 was 4.21 lakh. Deloitte Haskins & Sells LLP, a consulting firm, pegged the pan-India base of mobile towers as on March 31, 2015 at 4.39 lakh while AT Kearney, a telecom consultancy, said the current number is roughly 4.5 lakh.
Insufficient Numbers
In other words, around 29,000 mobile towers were added across India over the past 22 months, according to these estimates.
This is a grossly inadequate number when weighed against the huge rise in the number of mobile subscribers, according to telecom analysts and industry experts. In the past two years, the number of mobile phone users (on both GSM and CDMA technologies combined) in India rose to a shade over 1 billion from 886.3 million, according to data collated by Trai.
Telecom towers are structures that host base transceiver stations (BTSs), popularly known as base stations or cell sites. It is base stations that send and receive radio signals from a mobile phone.
"We definitely need many more towers, and estimates vary between 1 lakh and 2 lakh," says Mahesh Uppal, director of Com First (India), a consultancy dealing in telecom regulatory affairs.
Hemant Joshi, partner, Deloitte Haskins & Sells LLP, attributes the slow growth of telecom towers to "only a few independent tower companies" adding new towers. Only, "8,000-10,000 new towers were added in the last six months", according to him.
The future too looks grim given how telecom subscriber growth is still running on steroids. The number of mobile users in India is projected to grow to 1.3-1.4 billion in the next five years.
One plausible reason for the tepid increase in the number of towers could be that they cost an arm and leg for companies to set up. A typical ground-based tower can cost Rs 40-50 lakh whereas a shorter rooftop variant would cost Rs 20-25 lakh apiece.
Telecom operators found a way to beat this problem. They began to share towers.
Tower sharing became popular as it allowed operators to not only cut costs, but also focus on marketing their services. It also enabled players to speed up network rollouts and launch mobile services faster.
Mobile tower-sharing took off in a big way in India between 2007 and 2012, when the number of towers rose steadily from around 1 lakh to 4.07 lakh.
But things began to taper in recent years. TAIPA director general TR Dua says the situation has worsened in the last six-to-seven months because of a sharp increase in tower installation costs.
According to Dua, local authorities and resident welfare associations have started treating tower installations as a "pure revenue maximisation tool" by demanding huge deposits and imposing hefty levies under various heads. This, he says, has made the "whole business of adding towers for sprucing up mobile coverage and arresting call drops a daunting task". The government is not convinced. Telecom minister Ravi Shankar Prasad recently said in Parliament that there was a sharp uptick in the number of towers built in the past six months after it revealed plans to fine operators in June 2015.
Operators and tower firms declined to reveal the number of tower additions across India since June. Uppal says the issue "is not merely the number of new towers (added) per se, but whether they came up in places where the call drop problem is most acute".
A turtle chase
In a recent technical paper analysing the call drop problem, Trai said besides towers, the growth of BTSs had also "not kept pace with the growth in mobile subscriber base", which compounded the problem.
A base station, which resembles an electronics box and mounted on a tower, is what actually enables a call at the local mile. A large number of towers together form a mobile network.
Mohit Rana, partner at AT Kearney, says metros like Delhi (including, Gurgaon and Noida) or Mumbai would "typically require a mobile operator to set up 3,000-6,000 base stations, depending on spectrum available and traffic requirements", to ensure decent coverage while "large tier-2 cities such as Pune, or Hyderabad would need only 1,000-2,000 towers" each.
Some operators appear to have done their bit here. Vodafone India has over 12,500 and 5,000-plus BTSs in Delhi and Mumbai respectively and 2,900 in Kolkata, where the requirement is less. Idea Cellular, India's third largest operator by subscribers, has around 8,200 BTSs in Delhi, of which nearly 5,000 are dedicated to 2G, and the balance for 3G, according to a person aware of the matter.
However, TAIPA's Dua says it is "impossible to quantify" the number of mobile towers or base stations needed to cover a specific number of subscribers because these numbers also depend on network frequency and the quantum of spectrum in a location. For instance, a mobile network running on the 1800 MHz band would require 2.8 times the number of base stations required for a 900 MHz mobile network, which is the more efficient band, to provide a similar coverage experience.
Cellular Operators Association of India (COAI), the lobby representing India's biggest carriers such as Bharti Airtel, Vodafone India, Idea Cellular and newcomer Reliance Jio Infocomm, among others, disputed Trai's claim on BTSs. COAI Director General Rajan Mathews says its members had added 93,000 cell sites across India since January 1, 2015, of which, 23,000 additions happened between June 1, 2015 and January 1, 2016.
But Deloitte's Joshi says if the number of BTSs has increased, it is a result of rising tenancy — the number of mobile operators putting up radio gear on one tower. "Increasing the tenancy of towers is also comparatively less complex that adding new towers," says Joshi.
Mobile towers are technology-agnostic and can cater to all technology platforms, be it 2G, 3G or 4G. Syed Safawi, CEO of Viom Networks, says regardless of network load, BTSs can simultaneously handle voice, or 2G, and data, 3G/4G, traffic, but how an operator programs the usage of spectrum bands for voice or data, and how much is dedicated to each usage can vary.
This could mean there is a grain of truth in the accusation of Trai's Sharma of operators tuning their networks towards data. Data is more profitable for telecom operators. Market leader Bharti Airtel's September quarter earnings reveal that data accounted for more than a fifth of its mobile revenue in India. The company's data ARPU (average revenue per user) for India during the period grew to Rs 193 while the voice ARPU in India fell to Rs 140. Voice and data ARPU are key performance indicators of a company.
AT Kearney's Rana says in the past one year, traffic and network (growth) has been driven by 3G and 4G BTS additions, most of them on existing towers. "Data is crowding out some of the voice capacity."
Trai has urged operators, which are using a portion of their recently won spectrum on new data technologies, to rebalance voice traffic to avoid aggravating the call drop problem.
COAI's Mathews does not contest this. Operators were compelled to look at 3G and 4G technology amid rising data consumption, especially since 40-45% of the phones in the market are smartphones, according to him. He says there will be a sharp increase in new tower installations with India's biggest telecom operators ramping up their 4G networks, especially since "4G requires 30% more towers than 2G to meet both coverage and capacity requirements".
Deloitte's Joshi expects the number of "2G, 3G and 4G base stations to increase by a CAGR of 14% and the number of towers to register a 2% CAGR over the next 5 years".
This growth too would be inadequate given that India is likely to have around 300 million more mobile phones users in the period (9,000 more towers for an additional 300 million users).
There is another crucial question. As those towers will still be heavily skewed towards data, can users hope to have an end to interrupted conversations?
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