The and the regulators to keep pace with

The rapidly
evolving Digital technology has changed the game for businesses across sectors.
One of the major industries which witnessed transformation of huge proportions
is Telecommunications. Technology adoption, increased use and penetration of
data, changing customer preferences, aggravation of the ‘content-war’, and
entry of new player(s) in the market are some of the factors that have
significantly changed the business model for most of the telcos in India. According
to a Deloitte study*, the emergence of the following trends will further compel
the telecommunications industry and the regulators to keep pace with the rate
of change and the corresponding impact.

Data Analytics

With the integration
of external and internal data, enormous insights can be generated which can
help businesses to broaden their revenue base and provide better quality and
experience to the customers. Telecommunication industry with its rich
repertoire of customer information is uniquely poised to explore interesting
use cases.

Data Quality and Security

Organizations
will put in place a well-deserved yet long overdue focus back on data
organization, quality, and management. Data quality related initiatives are
already on the rise in 2017-18 with around 50% of telecom organizations
focusing exclusively and deeply on data quality improvement initiatives, which
is expected to gain further momentum. Besides, data protection and cyber
security will top the priorities for the telcos as well as other data driven
enterprises to sustain the business and ensure consumer trust.

Artificial Intelligence

As cloud becomes
more pervasive and thereby more affordable, all the branches of artificial
intelligence will gain momentum in the next year. With renewed focus on
infrastructure, manufacturing and other core sectors enabled by telecom and
technology growth catalysts, physical artificial intelligence assisted by a
machine learning algorithm to solve a specific business question and/or
opportunity will have significant adoption. Telecom players will have critical
role to get the backbone ready. Along with devices, product technology players
will also build contextual algorithms for local issues.

Over the Top (OTT) platforms

Original content
will be the key driver of OTT growth and regional content library is expected
to increase its share on OTT platform. OTT platform has been benefited as
telecom players are offering affordable 4G data. Data rates have dropped
drastically across the board with the launch of broadband services by a new
telecom player in the country. It is expected that the vernacular users will be
more than 2.5 times of English Internet user base by 2021.

VoLTE

More than 60% of
all broadband subscribers would be utilizing Voice over LTE (VoLTE) technology
for voice services by 2023 surpassing 5 billion subscribers globally, thereby
making VoLTE the most prevalent voice technology in the future. Since the
launch of 4G/LTE by telcos, the data traffic globally has grown 65% year on
year and had almost reached 14 EB (1018 bytes) per month by end of
2017. The spectrum freed up as a result of retirement of legacy technology (2G,
3G) will be used for IoT and M2M communications, thereby adding to the operator
services bouquet and additional revenue streams.

In addition to
the advantages of improved spectral efficiency, reduced cost per bit, improved Quality
of Service (QoS) and the application across retail and enterprises, the ever
increasing VoLTE bouquet of services is allowing telcos to compete against the
OTT challenge. Video capabilities which would comprise bulk of the traffic in
the future enhance the VoLTE business case. As a result, most telcos are
advancing their plans and commencing trials/deployment of VoLTE.

Smartphone usage

By the end of
2023, penetration of smartphones among adults in developed countries is likely
surpass 90 percent, a five-percentage-point increase over 2018. By 2023, 5G
networks should have launched in most developed markets, offering much greater
capacity and connectivity speeds. Furthermore, advanced 4G networks, which can
also support peak download speeds of over 1 Gigabit/sec, should have rolled out
in most of the remaining markets.

India would be
leading the smartphone revolution in the coming years as the largely untapped
market slowly gets included into the realms of digital services. India
currently has around 300-400 million smartphone users and is expected to lead
the smartphone growth reaching 810 million by 2021.

The
telecommunications market in India is characterized by an urban-rural divide
which is manifested by an urban tele density three times higher than that of
rural. However, the scenario will change soon with the increasing availability
of affordable telecom services and handsets in the market and the numerous government
initiatives to connect the unconnected. India is poised to be at the forefront
of the global data revolution with the introduction of bundle-based sales of
smartphones with cheap data tariffs.

When telecom
service providers in India started offering 4G data services at low prices and the
OEMs reduced entry level smartphone prices, a large number of feature phone
users were expected to upgrade to smartphones. However, the “smart feature
phones” introduced by a new entrant (telecom service provider) in the market
proved to be a game changer. These phones would potentially bridge the digital
divide by reaching out to the bottom of the pyramid with several data-driven
functionalities bundled into a device.

Digital media subscriptions

The steady rise
in broadband speeds has fueled the success of online streaming and in-turn facilitated
the increase in number of the online subscribers. 2018 will see increase in number
of homes consuming streaming services in 4K or ultrahighdefinition (UHD)
resolution. The roll out of 4G networks by telcos has made music and digital
content streaming far more reliable than before, even in transit. Global
industry leaders like Netflix, Amazon Prime, Apple music, etc. have launched
their services in India. Likewise, domestic market leaders like Hotstar
premium, ALTBalaji, Gaana.com, Saavn are also gaining popularity with
increasing number of paid subscribers.

Mobile-only

A mix of cellular
and fixed wireless access (FWA) technologies could lead to 30-40 percent of the
population relying on wireless for data at home by 2022, an increase from only
10 percent in 2013.

In the near
future, demand for wireless broadband services would be higher as compared to
fixed broadband services. This is because at times, mobile is the only form of
data connection available, especially outside cities. Other factors – income,
age, living alone, or using better and faster networks with bigger monthly data
allowances – also seem to play a role. This tendency also follows a trend; many
people have discontinued wired home phones, and the same shift is occurring in
internet access.

Demand for fixed
broadband services would be majorly limited to urban consumers, who have higher
bandwidth/QoS requirements for accessing services like gaming, high definition
video streaming, etc.

In-flight connectivity (IFC)

In 2018, one
billion passenger journeys on planes (about a quarter of the total) are likely
be on aircraft equipped with in-flight connectivity. This trend implies that
within a few years, the airplane may no longer be one of the last remaining
connectivity-free zones – in any part of the world. Mobile operators will need
to consider whether they should extend their reach into the sky. One operator
has already sponsored free access to messaging and one hour’s in-flight
internet access.

Conclusion

Content can now
be consumed at a time, place, and surrounding of the consumer’s choice owing to
technological advancements. Digital capabilities are being leveraged by the
masses to augment their entertainment experiences and this trend is likely to
guide the developments in the media and telecom sector. The Indian telecom
sector is expected to generate four million direct and indirect jobs over the
next five years according to estimates by Randstad India. The mobile industry
is expected to create a total economic value of INR 14 trillion (US$ 217.37
billion) by the year 2020. It would generate around 3 million direct job
opportunities and 2 million indirect jobs during this period.

India is at the juncture
of a digital hyper-revolution and smartphone is the lynchpin of this
technological onslaught. Telcos must adopt a synergized approach with the media
and content of consumers’ choice. Each stakeholder in the telecom value chain
will have to harness the market potential to help drive transformational
changes that go well beyond their core businesses.