Tilak Raj Dua, Secretary General, Tower and Infrastructure Providers Association (TAIPA), speaks on the challenges facing the sector and the prospects for telecom tower companies.
What will be the impact of the government´s Digital India push on the telecom tower business?
Telecom towers are critical installations on which the backbone of mobile communication rests. These are essential for realising the vision of inclusive growth. The success of initiatives like Digital India, Smart Cities and Right to Broadband, which the government intends to implement in a mission mode, will also depend on this critical and essential infrastructure. The Digital India initiative aims at providing universal access to mobile connectivity and Internet to the farthest corners of India. The initiative will open up a gamut of opportunities for IPs such as in-building solutions, fiberisation of backhaul networks, Wi-Fi hotspots and micro-sites. The models would help in establishing telecom infrastructure that would enable provision of ubiquitous connectivity across the country. This entails new small cell towers with design changes to ensure that towers are small enough to be deployed on city infrastructure like micro-cells and IBS.
What is the way out of the malaise of call drops? Is setting up of micro-base stations a good option?
One of the reasons for call drops is unavailability of new sites for installation of mobile towers in a region, due to several restrictive conditions placed by the authorities. Inadequate number and location of cell sites leads to customer inconvenience and call drops. Shutting down of operational cell sites leads to serious connectivity issues for customers that result in coverage gaps, call drops, network congestion, poor quality of service, increase in overall cost and complexity of telecom network. Furthermore, there are issues related to EMF from telecom towers that often arise from misplaced public perception. The RWAs, etc., currently restrict tower installations in residential areas due to perceived health hazard issues from the EMF radiation, which is contrary to the research findings of leading organisations like WHO. The industry has already initiated installation of pole-sites, micro-BTS and IBS, to enhance coverage in key locations. However, installation of rooftop towers in the residential as well as critical business district areas is a huge challenge due to public outcry on EMF radiation by vested interest groups.
Telecom experts attribute poor quality of mobile services, including call drops, on low investment in optic fibre for telecom backhaul deployments. What´s your view?
India is about to see the digital revolution which will rely on an efficient and robust mobile backhaul network that will ensure seamless voice and data connectivity across regions. One of the reasons for a low percentage of fiberised backhaul towers are issues related to the right of way, grant of permissions and high fees being levied by local authorities. In some cases, the fees range in millions of rupees.
The government´s BharatNet project seeks to connect 250,000 village panchayats across the country through fibre by 2020, which will expedite proliferation of broadband connectivity to every nook and corner of the country.
In the recent past, tower installation costs have sharply risen in urban centres as municipal corporations have increased overall permission costs. Has this put the squeeze on telecom tower players?
The increased cost places extra financial burden on the tower companies. Exorbitant fees are charged by local bodies, which range from Rs.5,000 to Rs.500,000. There are multiple levies that are being imposed for installation of telecom towers and include high one-time installation fees, sharing fee and annual renewal fee.
Telecommunication towers have been granted infrastructure status by the government and, thus, need to be recognised as an essential service. However, the ground reality is different.
Furthermore, coercive actions like ad hoc sealing, shutting down, dismantling of towers and disconnection of electricity to tower sites by municipal bodies, places strain on tower companies. For instance, in a major sealing drive by the corporations in Delhi, a large number of telecom towers were sealed. Similarly, in Thane, a sealing drive was initiated due to non-payment of exorbitantly high permission fees by the local bodies.
In 2012, TRAI had directed tower companies to reduce their dependence on diesel and cut carbon emissions. How successful has the Indian telecom tower industry been on that front?
Telecom towers need to be operational 24x7 to provide uninterrupted service to consumers. Nationally, the electricity grid currently does not meet the needs of telecom infrastructure. Therefore, they are forced to address the deficit by other energy sources available to them, primarily diesel.
The tower industry has taken many initiatives to reduce carbon emissions. One such initiative is the renewable energy service companies (RESCO) model. Under this, RESCO set up renewable energy-based power plants near the telecom towers and sell power to the telecom tower companies at a predetermined cost on a pay-per-use model. The industry has also taken initiative such as use of efficient battery banks and use of free cooling units.
Furthermore, realising the unrealistic targets and that the amount of capex required by tower companies would be huge; DoT has referred TRAI for re-calibration of targets.
How have you gone about addressing the concerns raised around the issue of radiation from mobile towers?
The government has already reduced the limit for EMF radiation to one-tenth of international norms. This is amongst the most stringent in the world. Regular monitoring of the radiation levels is being done by local TERM Cells of DoT and any non-compliance is being strictly handled with regulatory and financial penalties. There is no scientific evidence of harmful effects of EMF on human health. TRAI and DoT have been continuously striving to address the issues related to radiations from mobile towers. Also, DoT has launched extensive EMF awareness programmes and public outreach workshops across the country in a planned manner to address and allay public concerns regarding EMF emissions from mobile towers. Most recently, public awareness programmes were organised in Hyderabad and Dehradun.
How is Reliance Jio´s entry likely to impact the business? Will a consolidation shrink the client base for existing telecom tower firms?
The answer could be more suitably answered by cellular operators. However, the telecom tower companies may see a rise in tenancies on their towers due to entry of a new player in the competitive telecom market.