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2018 was a transformational year for the telecom industry, paving the way for continued change and innovation in the upcoming year. The past year saw the industry face hyper-competition, severe financial challenges, consolidation to a three-player private plus one PSU operator, an unsustainable debt load and the write-off of billions of dollars of value as several operators went into insolvency. In the face of these challenges, there were a few bright spots, such as the adoption of the National Digital Communications Policy 2018 (NDCP-2018), preparation for the adoption of 5G through the institution of the 5G High Level Forum, improvements in the Ease of Doing Business, continuing connection of rural India, rapid deployment of 4G networks and data consumption and tariffs that were the envy of the world! In the year ahead, we see the industry emerge to a more stable competitive environment, continued investments in 4G networks, a renewed focus on network coverage and quality, healthier balance sheets as operators raise Capital for investments and debt repayment and a focus from government on implementation of key aspects of NDCP 2018.

Globally, as witnessed in India, rapid innovation in technology and competitive pressure has led companies to merge operations and drive efficiencies in order to maintain viability and profitability. Companies are now looking to tap into new revenue streams emerging from new technology adoption. 5G promises significant opportunities, but emerging business models appear to be nebulous as operators scan the technology horizon for opportunities they can monetize. Partnerships and emerging network players providing service delivery platforms closer to the consumer, aggregators, cloud computing, all ensure competition will continue to be vibrant. Raising the needed investments to keep pace with the rapidly changing technology and customer demand will continue to test the financial mettle of incumbent operators.

As in the past year, the year 2019-20 continues to see an unprecedented surge in mobile data consumption and voice traffic, as consumers benefit from low tariff rates and expanded services. Though the country boasts of the world’s second largest internet user base, actual penetration is still at a meagre 46%. This provides operators an opportunity to continue to drive penetration for broadband connections. Rural penetration affords another opportunity for expansion as the efforts of operators continue to focus on meeting Governments’ ambitions of a fully connected “Digital India”. We believe that the Government and the operators have every reason to continue to forge an active partnership, given that, every 10% increase in Internet penetration, gives rise to an increase in GDP of the country by more than 3%. This fact itself should be a great impetus towards bringing the next billion online.

Riding strongly on the back of the Government’s ambitious Digital India program, telcos have been taking several steps in deploying a robust infrastructural blue-print, ready to deliver connectivity and digital services to the last mile. Till date, telcos have already invested INR 13.6 lakh crore in establishing a formidable infrastructural footprint. The last few years have seen significant 4G infrastructure being installed with 75% of overall base stations being 3G/4G. The industry recently witnessed the deployment of over 5 lakh mobile towers with over 21 lakh BTSs. In the wake of increasing global roll out of 5G networks and emerging use cases, it is expected that Government will be keen to keep India at the forefront of 5G adoption. Operators will be looking to work with the Government on 5G spectrum pricing, test cases, test beds and adoption of use cases suitable to India in the coming year.

NDCP-2018, anticipates the need for investments of US$ 100 billion over the next 3 to 4 years to achieve its objectives. To achieve this, the stressed financial condition of the telecom industry has to be addressed. Given the importance and speed with which there is a need to enable digital citizenship and stimulate economic growth, it is important for the Government to prioritize between the short term benefits of immediate revenue generation and the long term dividends that a robust connected economy can create and start acting on them on a priority basis. We hope the new Government will address it in the first 100 days of its tenure.

Amidst these challenges and opportunities and with optimism for the improvement of the industry’s fortunes in the future, I present the Annual Report for the year 2018-19.

STATUS ON POLICY AND REGULATORY ISSUES

One of the most crucial milestones of the Government last year was the release of the NDCP 2018 (National Digital Communications Policy). NDCP 2018, apart from focusing on telecom and digitization, aims to create 40 lakh new jobs through relevant skill improvement. NDCP 2018, has taken into account several long standing concerns the sector was facing and addressed each of those comprehensively. Rationalization of multiple taxes and levies on the industry and treatment of spectrum as a natural resource to ensure overall development of the country, are some of the many recommendations which truly deserve to be highlighted. The ability to raise the proposed investment of USD 100 billion on favorable financial terms, will not only make access to communication services easy and affordable but will also breathe in a new lease of life into the already debt ridden and financially distressed telecom sector. The proper execution of the policy will not only ensure the sector’s long-term sustainability but will also prepare the sector for widespread adaptations needed for welcoming futuristic technologies.

Efforts undertaken by the Government to facilitate roll out of 5G network services commercially by early 2020, is truly laudable by all measures. The High Level Forum for 5G India 2020, was constituted by Department of Telecommunications to position India as a globally synchronized participant in the Design, Development and Manufacturing of 5G based technology, products and applications. The coming few months are likely to witness many trials of advanced radio technologies for 5G and their relevant use cases as the 5G standardization process gathers momentum in India. We expect 5G deployments in India in the medium term and this leap forward in connectivity will enable the TSPs to significantly scale up their IoT and M2M offerings. 5G will be the key to the success of the Smart Cities initiative of the Govt. which is primarily aimed at the aspirational middle class which is looking for facilities like connected living, smart meters, smart traffic management and waste management. However, the success factor of 5G in India lies in the pricing of the spectrum for auction. The current price recommended by the regulator is significantly high if compared globally and needs to be reviewed and rationalized looking at the financially distress that the sector is reeling under.

Under the aegis of the Government’s BharatNet program, 1 lakh Gram Panchayats were connected through high speed OFC network by December ’17, and the idea was to take this number to 2.5 lakh, by March 2019. BharatNet aims to deliver communication and connectivity till the last mile and to the last person. The telecom industry is also working towards the installation of one million Wi-Fi hotspots. As of now, they have deployed about 3.5 lakh Wi-Fi hotspots and the remaining is expected to be deployed by September 2019. The operators have worked towards state-of-the-art Wi-Fi networks, which provide seamless roaming, ease of access, high levels of security, intercompany bill settlements, etc., thereby enabling smooth experience for subscribers, as he or she will be able to use the data plan taken from any TSP and use it for all the Wi-Fi Hotspots deployed across India. Besides offering consumer delight, this industry initiative will create an additional 3 lakh jobs. We believe this is a first of a kind, anywhere in the world.

The Right of Way policy is also playing an instrumental role in ensuring efficient connectivity and optimum distribution of digital services in several regions. The industry is working closely with the State and Local Governments for the efficient implementation of the RoW Gazette Notification. Sixteen states have already adopted the Right of Way (RoW) Gazette Notification of 2016, and many other states are following suit, reaping the benefits of India’s journey towards becoming a global, digital knowledge economy. COAI is constantly working with the remaining states for early adoption of RoW policies that comport with the RoW Gazette Notification.

Another important development was the apex court’s judgement on Aadhaar, where it mandated that individuals do not need to link their Aadhaar details while applying for new mobile connections from operators. However, the same has been later allowed by the cabinet as a voluntary measure. The industry worked with the Government on an OTP based Digital KYC solution as the earlier paper based method of getting a new mobile connection was cumbersome for the telecom operators as well as, for the customers. This was done keeping customer convenience in mind.

The implementation of GST by the Government is truly commendable. It will go a long way in fostering economic growth and sustainable development in the country. GST did not only widen the tax base but also created a unified national market, eliminated state level tax barriers by bringing in much needed transparency and simplicity while automating the myriad compliance matrices. The telecom sector has been a significant contributor to the Government treasury and accounts for 3-4% of total GST payments. The GST council had held several meetings over the year, announcing specific reliefs from time to time. The council upholds ease of doing business and have made several amendments to promote the idea. We hope that amendments in the law will address issues that the telecom sector is facing, such as the significant amount of refunds due operators, the levy of GST on Government payments (under reverse charge), Centralized Registration & Centralized Assessments for service companies etc. We remain confident that the Government will deal with this on a priority basis.

The expansion of 4G network coupled with the availability of cheaper data and smartphones has led to a surge in the usage of data in India. The usage of apps, social media, and consumption of video has sharply increased. While the high data usage has pushed India towards becoming a leading Digital Economy, it has also posed many challenges in terms of Data Privacy and Security. Social media, Apps and TSPs have access to personal information of consumers who use their services. Hence a pressing need has been felt across the world on appropriate safeguards to the privacy of the personal information of consumers. GDPR is one such example which was brought by the EU to address the concern around data privacy. India has also felt the need to address the concerns of Data Privacy and has drafted a Personal Data Protection Bill, which is expected to be adopted as law by the new government. The National e-commerce Policy and modifications to the Intermediary Guidelines under the IT Act have also been drafted for stakeholder comments and inputs. These proposed rules will pose new challenges for the telecom service providers as they will have to make several technical changes for possession, processing and storage of subscriber data records in compliance with the new laws of the land.

We expect the year 2019-20, will usher in possible disruptions, hitherto unconceivable. Technology innovations, new revenue streams, new applications, new network configurations, new competitors will all require significant investments to propel India to newer heights of economic growth and prosperity. The Indian telecom sector will have to look at adopting technologies like Blockchain, 5G, among others, to create new revenue streams and lower existing operational costs. With progress in Machine Learning and intense interest in smart technologies, Artificial Intelligence is also coming into the mainstream. This will bring many opportunities for operators in the form of AI based solutions for applications, services and underlying infrastructure. This may also be adopted to improve customer service and reduce customer churn.

COAI and its member operators will continue their focus on providing value to their customers, advocating for a stable, long term, sustainable, policy and regulatory environment which will promote innovation and orderly growth for a fully connected and digitally empowered India, delivered through a financially strong and viable industry. We also look forward to continuing our partnership with the Government and Regulator to achieve the above vision.

OTHER ACTIVITIES OF THE ASSOCIATION

Taking forward the momentum from last year, COAI organized the second edition of the country’s largest iconic Mobile, Internet, and Technology event in India – India Mobile Congress 2018. The event took place under the active support, guidance, and leadership of Shri Manoj Sinha, Minister of Communications (Independent Charge) and Minister of State for Railways and actively supported by Smt. Aruna Sundararajan, Secretary, DoT and Chairperson of the Digital Communication Commission as well as with the support of several other Government Ministries (MEITY, DST, Skill Development & Entrepreneurship, Housing &Urban Affairs). With discussions pivoting on emerging technologies offering a glimpse into Virtual Reality, Connected Cars, m-Health, Smart Wearables, Smart Home, Artificial Intelligence, Drones, Robotics, Smart Energy, Internet of Things, Blockchain, Machine Vision, Cloud Computing, etc., policy and regulatory guidelines, the event drew luminaries from industry, Government – both domestic and international as well as many other speakers of international repute. The event also witnessed technology showcases, use cases and also provided a platform for budding entrepreneurs to gain exposure and build connections.

COAI, in coordination with the DoT and the GSMA, helped in the coordination and facilitation of the visit of the Indian Government Delegation comprising of Chairman, TRAI Mr. R.S. Sharma, Member of TDSAT, Mr. Bhargava, Mr. Anshu Prakash, Additional Secretary- telecom, DoT along with senior officials from their respective organizations, to Mobile World Congress 2019, held in the month of February-March in Barcelona, Spain. The delegation successfully represented the Indian Telecom Industry and highlighted the immense opportunities present in the country.

COAI being the Market Representation Partner (MRP) of 3GPP from India, we have been constantly engaging with 3GPP on requirements for the Indian market, as COAI members have a sustained business developed using 3GPP technologies and standards. To fulfil these activities, COAI formed the “Indian Friends of 3GPP” (IF3) to facilitate collective activity to host 3GPP meetings of relevance to India, within India and to do so in a manner that is cost effective, efficient, and which meets with the expectations of the 3GPP community. Further, COAI along with IF3, hosted six group meetings of 3GPP namely SA5#121, RAN5#3-5G-NR Adhoc, SA4#100, SA2#130, SA3#94 and SA6#28 in Kochi and Jaipur in the months of October 2018, January 2019, and February 2019. Around 500 delegates from across the globe participated in these meetings.

COAI has participated and partnered with other entities in the co-organization and co-creation of various seminars and workshops on issues of common interest and benefit to its members and for generating subject matter awareness amongst consumers. COAI and its members also continued active participation in Organizations such as CII, FICCI, ASSOCHAM, NASSCOM, GSMA, TSDSI, TCOE, TSSC, amongst others, as well as activities of many telecom events in India.

To keep pace with the growing ecosystem and to represent the whole gamut of the communications industry, COAI continued to expand its Associate Membership by inducting new members such as ECI Telecom India Pvt. Ltd. and Juniper Networks Solutions Pvt. Ltd.

The COAI Executive Council headed by Chairman, Mr. Sunil Sood, Vice Chairman, Mr. Ajai Puri and comprising senior representatives from all member operators, met several times over the last year to deliberate on a variety of issues impacting the telecom industry. They were ably assisted by proficient advice from the various Working Committees that have been set up in COAI.

I would also like to thank all the Committees and Working Groups and their Chairmen and Vice Chairmen for their proficient leadership and sincere contribution towards various industry issues. We are grateful for their contributions towards various industry issues and for helping the Association in representing these issues in an expert and timely manner.

I would like to thank the Chairman, Mr. Sunil Sood and the Vice Chairman, Mr. Ajai Puri, for their personal involvement and support in all the activities and initiatives of the association in the last year, especially in the face of many challenges faced by their respective companies and the entire industry, during the course of the year. Both of them have given generously, their time and resources to provide personal support and guidance to the Association. We request their continued support and guidance in the future as well.

With the merger of Vodafone and Idea this year into a single entity, we are sorry to see the departure of two stalwarts of the Telecom industry from COAI – Mr. Sunil Sood and Mr. Himanshu Kapania. They have provided exemplary leadership to the industry as heads of their respective companies and COAI in particular, as Chair and Vice Chair. We owe them immense gratitude and thankfulness for their unstinting support and encouragement over the years.

I would especially like to record my deep appreciation for the sustained efforts and support of the COAI Secretariat team who have always been fully committed to the task before us and have always been ready to take up new challenges for the Association and execute them smoothly, efficiently and with excellence. I deeply appreciate all of their efforts in contributing significantly to all the achievements of COAI.

RAJAN S. MATHEWS
DIRECTOR GENERAL
COAI