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Friday, February 9, 2007
Ibrahim Ahmad
Thanks to the mobile telephony explosion, from the current 140 mn subscribers, there will be over 250 mn subscribers by the end of 2008. This means that over and above 100,000 towers that dot the country today, at least 300,000 new towers will have to be erected. This is going to cost about Rs 25,000 crore additionally, and most of the money will go into tower shelter, civil work, electricals, power supply, and optical cables.
Should Indian operators, therefore, share telecom infrastructure? The industry seems to be in a bind on this, and that the idea is noble, nobody denies. It saves national resources, reduces duplication, and does not deface town and city skylines. And on top of all this, there is likely to be an improvement in quality of service, where operators have not been scoring too well in the last few years. With operators sharing towers and other passive telecom infrastructure, they will find it easier to reach the remotest part of a city or village, and there will be lesser call drops. But most importantly, the undisputed fact is that it saves a lot of money for the operators, and it is happening in many other countries.
The operators are not sounding too excited about this sharing business. They have security concerns in shared environment, and not too sure how well will the sites be managed. But most importantly, they are not too sure if these shared telecom infrastructure companies will be able to keep pace with their network rollout plans. Some of the operators, for instance, will set up about 18 to 20 thousand towers in the next 12 months.
There are a few telecom infrastructure companies that have come up in India. It is important that they present a sound business model to the operators, and remove all their doubts about this business model, and remove apprehension about their capabilities. That is when operators will be confident enough to try it out. One must not forget that several operators have already outsourced some key components such as network deployment and management, security, IT infrastructure, and customer support. So, they are open to such ideas. Sharing passive infrastructure should not be a big issue.
While it might take some time for these players to be able to convince operators, there are already other factors at work. Operators might be forced to consider infrastructure sharing model due to other pressures and not just business considerations. Recently, the union Communication and IT Minister, Dayanidhi Maran, announced MOST (Mobile Operators Shared Towers), a plan to set up shared passive infrastructure such as towers for mobile services across the country. The government believes that such sharing will help in lowering op-ex and cap-ex, and therefore enable operators to reduce tariffs further.
Under this program, which has been described as a joint initiative of the government and the industry, the target is to set up 1,800 shared sites for in Delhi alone, for GSM and CDMA operators, within 2007.
And if operators thought they would not find it very difficult to resist this plan, think again. Infrastructure sharing as a concept has the backing of Jaipal Reddy, another government heavyweight who heads the ministry for Urban Development. This ministry can influence bodies like municipal authorities in such a way that erecting towers within the city becomes even more tough and problematic. Project MOST has started with urban areas, but the government wants to push telecom infrastructure sharing in rural areas too.
Life is not just about increasing teledensity but also about enhancing aesthetics of the environment by minimizing the intrusion of towers. It might be worth for the operators to work along-with the shared infrastructure companies rather than shun them.
ibrahima@cybermedia.co.in
Source: Voice&Data
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