A recent forecast — on the 4G industry in India — from telecom industry body GSMA reveals less exciting future for mobile operators such as Bharti Airtel, Idea Cellular, Reliance Jio, Vodafone, among others.
The chart prepared by GSMA suggests that Reliance Jio will be the leading 4G operator during 2017 – 2020. Jio’s 4G subscriber base will be more than the combined 4G subscriber base of Bharti Airtel, Idea, BSNL, Vodafone, among others.
Airtel launched 4G service in 2012 becoming the first Indian telecom operator to launch the high speed Internet network in select parts of cities. Reliance Jio joined the 4G bandwagon in September 2016 by offering free data and voice services – at the same time challenging the financial conditions of all telecom operators.
The bad news for the India’s 4G operators: the 4G connection base is forecast to grow to just 270 million by 2020. This means that around one fifth of India’s phone users will be using 4G services for their mobile Internet needs.
GSMA said mobile broadband on 3G and 4G networks will account for almost 50 percent of total connections by 2020. This indicates that 3G will survive for the next 3-4 years despite the move to shift to 4G networks dumping 3G.
GSMA earlier said 4G LTE network saw sluggish growth in India following its initial launch in 2012, hindered in part by the lack of affordable, harmonised spectrum in the sub-1 GHz coverage bands.
However, the commercial launch of services by Reliance Jio in September 2016 and investments by the existing operators have driven rapid growth in 4G connections.
Data ARPU of Indian telecom operators fell to $1.88 in the first quarter of 2017 from $2.33 twelve months earlier. This was due to the presence of Reliance Jio, a company promoted by billionaire Mukesh Ambani. Reliance Jio has invested $20 billion plus to take on top telecom operators in the already competitive Indian telecom market.
GSMA noted that total revenues of mobile operators in India fell for the first time by 1 percent annually in Q4 2016, compared to annual growth of more than 6 percent for the three quarters previously.
The good news: India, Indonesia and Brazil will represent 35 percent of the 4G increase, underscoring the geographic shift in internet users.
Despite the presence of top technology focused operators in India, telecom operators’ mobile revenue will grow from $30 billion in 2016 to $31 billion in 2020.
GSMA pointed out that Indian mobile operators’ Capex (capital expenditure) will decline to $5.9 billion in 2020 from $7.7 billion in 2016.
Indian telecom operators’ strategy on 5G is not clear at present. GSMA says the world will be adding 3.6 billion 4G users versus 1.2 billion 5G users between 2016 and 2025. If the entire telecom market is going to focus on 5G from 2020, will India step back and look at 4G alone to recover money from spectrum and networks?
Baburajan K