YOU ARE AT:Network InfrastructureData explosion in India drives tower demand

Data explosion in India drives tower demand

Smartphones increasingly replacing cellphones on Indian subcontinent

WASHINGTON – A new Deloitte India report paints the subcontinent’s wireless tower market as primed for a transformative period.

“India is at the cusp of a data revolution,” wrote Hermant Joshi, author of the report. “With the increasing proliferation of smartphones among the Indian masses, data will grow exponentially, requiring a significant number of additional data sites over the next few years. An amalgamation of cooperation and competition among telecom operators and tower companies will be required to cater to this next phase of growth.”

India currently suffers from low market penetration of smartphones, but an extremely high penetration of cellphones in general with 68% of Indian households owning a cellphone.

As Joshi said in his report, “The current smartphone penetration in India stands at 13.4% up from 10% in 2014.” Several major smartphone manufacturers have seen India as an attractive market for smartphone expansion.

Data gathered by Deloitte indicates that the paradigm of India’s spectrum allocation will shift significantly. The study, conducted across 25 countries, indicates that once smartphone penetration exceeds 25%, “data explosion takes a new dimension. This is mostly driven by the data-hungry applications and on-demand services. India is likely to follow the global trend and will see tremendous data growth at 30% smartphone penetration with even more adoption of data-hungry applications/services on mobile devices.”

This explosion of demand for data is what Deloitte predicts will transform India’s tower industry over the next five years. Currently, India has close to 400,000 tower sites, which have been placed with the aim of providing as much coverage as possible.

“The decline in growth of voice usage along with industry developments and regulations in India have raised concerns about the growth of independent tower businesses, thereby affecting their cash flows and debt repayments,” Joshi explained. “However, exploding data traffic is leading to in-building solutions and smaller cell sites, and is expected to drive growth of the Indian tower industry in the future.”

As India’s market switches from one dominated by pay-as-you-go voice phones to pay-as-you-go smartphones, Deloitte sees a significant shift in the needs of India’s wireless infrastructure.

“Telecom operators are expected to offload traffic from macro to micro sites in order to meet the eminent data demand.” This fits with a global trend where, “Globally, small cells have been outstripping the number of macro base stations shipped since 2010.” The report predicts that by 2020, “A total of 44% of the mobile traffic is expected to be offloaded to Wi-Fi and small cells.”

The report concludes that a shift in India from a cellphone to a smartphone nation is highly feasible and inevitable but will require a host of both local and national government reforms and assistance; specifically major regulatory and tax reforms coupled with infrastructure subsidies.

ABOUT AUTHOR

Jeff Hawn
Jeff Hawn
Contributing [email protected] Jeff Hawn was born in 1991 and represents the “millennial generation,” the people who have spent their entire lives wired and wireless. His adult life has revolved around cellphones, the Internet, video chat and Google. Hawn has a degree in international relations from American University, and has lived and traveled extensively throughout Europe and Russia. He represents the most valuable, but most discerning, market for wireless companies: the people who have never lived without their products, but are fickle and flighty in their loyalty to one company or product. He’ll be sharing his views – and to a certain extent the views of his generation – with RCR Wireless News readers, hoping to bridge the generational divide and let the decision makers know what’s on the mind of this demographic.