How India’s telecom tower industry can drive the next wave of infrastructure revolution

Changing demands in the telecom sector present new opportunities for growth

Today, with data growth and the imminent launch of next gen 5G technology taking center stage, the next decade holds exciting new prospects for towercos. Plenty of new opportunities are arising for tower companies to shift their attention from a macro tower focused business, towards new business models hinged on fiber, small cells, data centers, Wi-Fi, smart cities and beyond.

With strong fundamentals, Indian towercos are well positioned to expand their infrastructure portfolio and tap into adjacencies. Fiber exhibits potential as deployment curve is expected to increase 1.9x and touch 2.8 million cable kilometers in 2023. Small cell deployment is another exciting opportunity, with outdoor small cell deployment slated to reach ~250,000 by 2023.

Advancing the capex to opex model, infracos can venture into data centers and edge computing (micro data centers) play. As the economy grows, low hanging revenue opportunities can come from capitalizing the real estate rights with the infrastructure providers – opening growth avenues in advertisements, electric vehicles infrastructure, security solutions and traffic control among others.

A carrier neutral shared digital infrastructure provider can grow its wholesale business with multiple operators, since aggregating demand from all customers increases household conversion rates for fiber and, hence, can provide return on investment for new buildouts. By operating independently, financing options for the shared digital infrastructure provider improve considerably. Since it primarily invests in infrastructure, the digital infrastructure provider can attract long-term investors who are interested in buying a physical asset.

There is also a broad consensus that 5G will drive up the total cost of network ownership, given the massively increased densification of urban areas and the resulting heightened requirements for fiber deployment. A strong, independent shared digital infrastructure provider is better positioned to support the industry’s need for fiber rollout and small cell densification.  

Incumbents across the globe have already begin to embrace or at least consider structural separation of active network elements to a shared digital infrastructure provider to address deepening financial and market pressures.

Way forward

Ease of doing business remains a prime concern for all infrastructure projects in the country. Delays in getting approvals from municipalities, lack of uniform charges and clearances for RoW, and multi-body approvals are key concerns that needs to be addressed for faster infrastructure rollouts. To expedite the creation of robust telecom infrastructure and to fulfil the agendas of ‘Digital India’, it is pertinent that ease of doing business is treated as a priority.