Telecom industry needs to fiberise networks: ICRA

New Delhi: With over a billion mobile phone customers and an explosion of mobile data consumption over the past two years, the Indian telecom industry needs to migrate from traditional copper-based networks to dense optic fiber cable networks, according to investment information and credit rating agency ICRA.

The proliferation of affordable smartphones, low data tariffs, increase in speeds of delivery and enhanced content have led to 539 million wireless internet subscribers in the country. This translates into daily consumption of 418,330 terabytes (TBs) of data. Each TB measures over 1,000 gigabytes.

The data consumption is expected to grow over the long term with increasing applications, improving technology and more content. To meet the requirements, telecom networks need to be robust and have the capacity to carry large amounts of data and deliver it quickly, said ICRA in a research report.

With each step on technology ladder from 2G to 3G to 4G and now 5G, the fiber requirement has been going up. In fact, 5G and its applications, which will expand in the times to come, translate
into speeds in excess of 10 Gbps as against the average speeds of 6 Mbps achieved with 4G technologies in India (against the global average of 17 Mbps).

“Achieving such speeds make fiber connectivity essential. India’s high population density also translates into deeper and denser fiber network,” said the report.

At present, the country has about 500,000 towers of which only 22 percent are fiberized as against 80 percent in China. India has 110 million km of fiber deployed compared to 420 million km in the United States and 1,090 million km in China.

Hence India’s fiber coverage in km per capita works out to 0.09, which is far behind 0.87 for China and more than 1.3 for the United States and Japan. “The fiber density in India will have to increase at least four-fold. It means that fiber will evolve as a separate industry in some time, similar to the trajectory seen for telecom tower industry over the past two decades.”

ICRA estimates the present market value of fiber assets owned by major private telecom operators is about Rs 1.2 lakh crore. The extent of fiber rollout over the next few years will require investments of Rs 2.5 lakh crore to 3 lakh crore. Hence sharing of fiber among multiple telcos will be the key driver of a reasonable return on capital.


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