INDIA TELECOM TOWER INFRASTRUCTURE MARKET
Telecommunication towers have become an essential item especially in the wireless telecommunication sector with the development of wireless telecommunication technologies such as CDMA (Code Division Multiple Access), GSM (Global System for Mobile ),WAP (wireless Web Access), etc.
More than thousand telecommunication towers with various structural forms are available in this country and almost all of these towers have been designed only considering wind loading, since India was considered as a country free from earthquakes until recently.
Fastest growing telecommunication market has increased the demand for steel towers. The major loads considered for the design of these towers are self-weight, wind load, seismic load, antenna load, platform load, steel ladder load etc. Failure of towers is generally due to high intensity winds. Several studies have been carried out by considering wind and earthquake loads.
The Indian telecom industry has undergone a transformational change in the last decade. Mobile operators successfully adopted innovative models to sustain growth followed by focus on operational prudence in recent years. The tower industry has been a key enabler for such models by allowing sharing of infrastructure along with operational excellence.
As telecom operators are focusing on increasing market penetration with limited capital expenditure, it is favourable for telecom operators to lease towers from tower companies, reducing costs considerably and allowing telecom operators to focus on core marketing activities.
Leasing towers from tower companies also enables new telecom operators to rollout services in record times. In India, over 10,00,000 + telecom towers are established with an enhanced national spread of signalling. They are using Diesel generators to provide power to these towers.
The telecom companies are estimated to be the second-biggest consumers of Diesel in the country, behind only the Railways. Apart from leading to high carbon emission, diesel usage by telecom towers is also a big drain on the exchequer as the loss to the government on account of the cheaper fuel is pegged.
Wireless networks are expanding coverage — the area served by their specific service. Many are also advancing into faster 5G networks and 4G LTE, also known as long-term evolution, the highest grade of 5G and 4G . Both of these trends have helped accelerate the demand for towers. In addition, as wireless data speeds have increased, so have software applications.
Competitive pressures aside, the growth in subscriber base has necessitated expansion of network coverage, which in turn has driven the Telco’s to make sizeable investments in active and passive infrastructure.
INDIA TELECOM TOWER INFRASTRUCTURE MARKET DYNAMICS
The telecom towers industry has played a pivotal role in the unhindered growth of India’s telecom sector. Indian tower industry has been one of the pioneers in infrastructure sharing globally, which has resulted in significant operational efficiency and capex saving for telcos.
The business of building, buying, and leasing of macro towers has proven its merit over the years, and has created an investable proposition for tower companies in India. Currently, Indian tower companies are amongst the largest telecom infrastructure companies across the globe.
Passive infrastructure being one of the most important components of a mobile network, the same has been a critical area of operations for telecom companies in the past. However, with increasing competition posing an urgent need for telecom companies to expand their coverage and sharpen their focus on core operations so that they can sustain and improve their market position, passive infrastructure has assumed the status of an independent industry during the past few years.
India’s smart city initiative has opened a new avenue of growth for infrastructure providers. Digital infrastructure forms the backbone of the smart city initiative and towercos are well positioned to create and maintain this infrastructure.
The Indian government’s Smart Cities Mission, which was launched in 2015, aims to create 100 smart cities in the country. Towercos in the country have already jumped on the smart city bandwagon and are keen to make most of this opportunity.
The unprecedented success of India’s telecom sector is attributable to the wireless growth backed by a robust tower infrastructure industry which has played an instrumental role in bridging the digital divide and facilitating ubiquitous mobile connectivity.
Consumption patterns have changed radically for the Indian telecom consumers in the past 3-4 years. From a voice dominant market, there has been a clear shift towards data centric usage patterns. The Indian market is expected to witness an increase in mobile data traffic in the coming years as there has been market integration of new service providers which involve data-based services.
The growth in data demand, along with the roll out of 4G and impending launch of 5G, has changed the infrastructure requirement for telcos. High speed data services are fueling the need for a denser network along with increase in fibre penetration.
In the coming years, telecom infrastructure will consist of not only macro tower sites, but also small cells, fibre, wi-fi and in building solutions (IBS) solutions. This technology evolution is expected with the transition to the next generation which will pose new requirements for infrastructure that involves high speed gigabit requirements for 5G enhancement and intervention into the mobile networks.
INDIA TELECOM TOWER INFRASTRUCTURE MARKET SEGMENTATION
The Indian Market of Telecom Tower Infrastructure can be segmented into following categories for further analysis.
By Product Fuel Application
- Renewable Source of Fuel
- Non-Renewable Source of Fuel
By Product Placement
- Rooftop Based Towers
- Ground Based Towers
- Mobile Towers
- Wireless Towers
By Integration / Structure Type
- Lattice Tower
- Guyed Tower
- Monopole Tower
- Stealth Tower
- Composite Tower
- Other Tower
By Ownership Model Operation Type
- Operator Direct Owned
- Joint Venture Operation
- Private Ownership
- Public Enterprise Operation
- MNO Captive Operation
By Regional Classification
- Western Region – India
- Eastern Region – India
- Southern Region – India
- Northern Region – India
RECENT MARKET TECHNOLOGICAL TRENDS IN TELECOM TOWERS INFRASTRUCTURE
The Telecom tower infrastructure has been focused upon increasing fuel consumption levels as they fall to be on a large-scale flow category within the industrial segment and consume a large amount of exchequer for the operators.
Renewable energy can be used successfully to run the electrical equipment of telecom towers in remote areas where grid power is unavailable. It removes the possibility of interruptions of working of telecom equipment due to frequent power cuts as electricity from renewable sources is the most reliable one.
There have been projects initiated within the non-grid areas in around 20 states where they power the towers by using green energy sources like solar panels and wind energy. The tests have been found to have “worked out well” and there are now plans to actively spread them to more regions.
Controlling the Air Pollution from Telecom towers is very difficult because the total carbon emission on account of Diesel usage by the telecom towers is estimated to be around 10 million tons of Carbon-dioxide (CO2). These innovative solutions encompass new more environment-friendly Telecom Tower technologies and also innovative Green Energy concepts with potential for lowering environmental impacts, such as minimizing exhaust emissions.
There has also been major technological advancement seen within the Telecom tower infrastructure backup power and supply requirements. These telecom towers that require about 12-14 billion units of electrical energy and energy consumption per tower will further increase with green field tower roll outs.
On average, 70% of the new towers to be constructed every year would be in the rural areas where grid power is not the primary source of energy.
Infrastructure companies have already started smart city projects to enhance revenue. Smart cities are offering access to street furniture for future telecom infrastructure. Other segments such as IoT, Wi-Fi, power management among others are likely to become mainstream as the market matures.
There has been a placement of increasing infrastructure sharing policy due to new 5G integrations within the country which includes new wireless services. The rollout of 5G will require massive deployment of towers and dense fiberization.
The electronic elements core or intelligence in any network embodied in base stations and other equipment for mobile networks, access node switches, and management systems for fibre networks are part of active infrastructure.
With leading GSM players forming a consortium (Indus Towers) and other larger players such as Tata Teleservices and Reliance Communications entering into long term agreements for passive infrastructure sharing mostly with their tower subsidiaries, the new and smaller third-party infrastructure providers are likely to get most of their business from smaller players and new entrants.
Indus Towers has been the major tower infrastructure contributor in the country, With 1,12,936 towers in 15 circles across the country, Indus has the widest coverage in India. Indus Towers is an independently managed Company offering passive infrastructure services to all telecom operators and other wireless services providers such as broadband service providers.
The major competitors includes the Airtel Tower Infrastructure which has recently started mobilised the Mobile tower technology integration that focuses upon the Tower requirement analysis. It has moved apart from the other infrastructure providers in terms of technological placement wherein the passive and technology integration is mobilized as required.
There has been recent integrations and enhancements by the GTL Infrastructure and Jio Infocomm on the increased mobilization of towers wherein the towers are designed to have a lower coverage on the land usage pattern alongside the enhanced levels of low radioactivity in the region of operation.