The past year was an unusual one for the Indian telecom industry. Unlike previous years, tariff hikes, new deployments or growing data consumption didn't dominate the headlines.
Instead, telcos – especially Jio – reported record investment. And two Indian operators decided to develop their own 5G solution.
And much like the rest of the world, Indian telcos found themselves firefighting to ensure that network downtime remained under control, as remote working and online learning became the norm in a pandemic-stricken world.
Here's a rundown of significant happenings in the Indian telecom industry in 2020.
Homegrown 5G solution
While India is yet to conduct a 5G spectrum auction, Indian telcos and the government are working toward developing their own 5G solutions.
Jio announced earlier this year that it had developed a 5G platform, which it hopes to sell in the global market after deploying it in India. Media reports suggest Airtel is also developing an indigenous 5G solution. Both are believed to be based on open RAN.
This is possibly the first time two Indian telcos are working on a 5G solution. There are two key reasons for this.
With Chinese vendors out of the equation for all practical purposes, there is a need for service providers to think of new ways to bring down gear expense. Since open RAN is a software-based technology, it helps telcos innovate.
The Department of Telecommunications (DoT) also came up with its own Radio Interface Technology (RIT) for rural coverage.
The solution completed the evaluation phase of ITU's International Mobile Telecommunications 2020 (IMT-2020), confirming the performance requirement. This means India's contribution is now being accepted as the global 5G standard.
However, telcos are reluctant to use this technology because it requires them to make incremental changes in the network.
Massive investment in Indian telcos
The company would use a good part of this investment to become debt-free, while the rest is likely to be for its 5G solution. Jio might also be looking to acquire firms to help realize their global ambitions.
Even so, Jio is not the only Indian service provider to have attracted investment.
Bharti Airtel managed to raise $2.8 billion through a combination of Qualified Institutional Placement (QIP) and foreign currency convertible bonds (FCCB).
Several global investors, including Warburg Pincus, Fidelity, BlackRock and JP Morgan, participated in the program, which Airtel claimed is the largest ever dual-tranche equity and FCCB offering in the Asia-Pacific region.
On top of this the Carlyle Group invested $235 million to acquire 25% in Airtel's data center venture, Nxtra.
The faith of investors, at a time when service providers are heavily in debt, points to the long-term potential of the Indian market. This is especially true after the outbreak of the COVID-19 pandemic, with enterprises forced to go for digital transformation.
The Chinese confusion
Clashes between Indian and Chinese soldiers earlier this year in Ladakh, Northern India, had significant repercussions for the presence of Chinese vendors Huawei and ZTE in India.
The government retaliated by banning 59 Chinese apps and barred the state-owned telcos, BSNL and MTNL, from using Chinese equipment. It also asked private telcos to avoid using Chinese gear.
Amid rising anti-Chinese sentiment, the administration also adopted measures to make it more challenging for Chinese firms to do business in India.
These include stringent testing of transmission gear by the Telecom Engineering Center before being deployed. New FDI norms stipulate clearance is required for any investment from countries with common land with India (including China).
The government was already dilly-dallying about using Chinese equipment for 5G trials, and the border skirmishes added to the already tense situation. There is still no clarity whether telcos can use Chinese equipment for 5G.
The enterprise focus
The year saw all the private telcos heightening their focus on the enterprise segment.
With coronavirus forcing companies to accelerate the pace of digital transformation, telcos took measures to enhance services and products. This is also crucial because many key 5G use cases revolve around enterprises. The telcos, which can acquire greater market share in the enterprise segment, now stand to gain as the industry moves toward 5G.
While Jio has been vocal about its focus on small and medium enterprises, Airtel would like to come up with innovative offerings to continue its dominance in the large enterprise space.
On the other hand, Vodafone Idea is trying to transform itself into a "techco" and hopes that this will help it to make up for the lost subscriber base in the retail segment, as per media reports.
Other significant hits and misses
- BSNL was unable to launch 4G four years after private telcos introduced Indians to high-speed broadband. Unfortunately, the state-owned telco could not make any significant headway as its 4G tender remained embroiled in controversy.
- Jio continued to harp on 2G-mukt India (2G-Free India) through the year. The service provider wants India to come up with a policy to accelerate the upgrade of 2G subscribers to 4G. This is likely to dominate in the coming year as well.
- Vodafone Idea continues to lose subscribers as it takes the lead in the recent tariff hike.
- India postponed both the 4G and 5G auction to 2021, as the industry continues to protest about the 5G spectrum's high reserve price.
- India's Jio wants to re-imagine global 5G market
- Indian telcos warm up to open RAN
- After Jio, Airtel wants to develop its own gear
- India's homegrown 5G plans worry its telcos
- India's Jio looks to acquire firms to fire its 5G ambitions
- Google to invest $10B in India's digital future
- Who's invested what (and why) in India's Jio Platforms?
- Carlyle Group acquires 25% stake in Airtel's Nxtra in India
— Gagandeep Kaur, contributing editor, special to Light Reading