COAI highlights 2024 Achievements and the Roadmap for India’s Telecom Growth

Lt. Gen. Dr. S.P. Kochhar, Director General, COAI

Lt. Gen. Dr. S.P. Kochhar, Director General, COAI, said indian telecom industry has embarked on an exciting journey in recent years, serving as a catalyst for the country’s socioeconomic growth. Owning a massive 1.2 billion telecom subscriber base, the average monthly data consumption per wireless data subscriber has touched 21.30 GB by October 2024. As of October 2024, over 4,60,592 5G BTS sites were installed, leading to a surge in the 5G user base, which crossed 125 million and is projected to reach 350 million by 2026. Fixed Wireless Access (FWA) emerged as a key 5G use case in India, with connections reaching nearly 3 million within a year of launch. As a major contributor to the GDP, the sector is providing employment opportunities for over 4 million people, directly and indirectly.

Key Growth Areas: AI and 6G

The rapid pace of digital innovations in telecom is evident from the massive adoption of Artificial Intelligence (AI) and GenAI technologies across areas like customer service, operational support, network optimisation and automation, predictive maintenance, fraud prevention and so on. According to KPMG India, 55% of the organisations in Technology, Media and Telecommunications (TMT) sectors in India have fully integrated AI, with 37% in the scaling phase.

India is now poised to lead the global race towards 6G, with an exciting opportunity to drive technological leadership. With the on-going efforts like the Bharat 6G Vision, the government aims to create 10% of 6G patents from India and is evaluating 470 proposals on ‘Accelerated research on 6G Ecosystem’. The Department of Telecommunications (DoT) has also funded two next-generation testbeds for advance 6G research.

Challenges Impeding the Growth

Despite the promising advancements, the telecom industry faces several critical challenges, which disrupt the sustainable growth of the ecosystem.

Fair share contribution from Large Traffic Generators (LTGs): The massive traffic created by LTGs has significantly strained telecom networks, compelling TSPs to invest an additional ₹10,000 crore in infrastructure in 2023, according to our study. While TSPs bear these costs, LTGs, without contributing, amass multiple incomes through subscriptions, ads and data-driven marketing, with revenues largely outside India’s tax ambit. COAI estimates a ₹800 crore loss to the Indian exchequer in AGR dues and taxes like GST from top 4-5 LTGs. To address this issue, COAI recommends supplementing the USOF with a Fair Share contribution from LTGs.

OTT Regulation: The regulatory disparities prevailing in the sector are impacting the TSPs adversely, leading to concerns over market fairness, national security and user privacy. While TSPs comply with stringent security and compliance norms, the OTT communication services remain largely unregulated. This absence of OTT regulation under the new Access Service authorization perpetuates an uneven playing field. To address this, the government should enforce traceability and user privacy rules on all calling and messaging apps, as those platforms provide similar services using the internet network.

Allocation of 6 GHz spectrum band: Based on IMT2020 requirement, GSMA estimates that 2 GHz of mid-band spectrum will be needed to meet the expected traffic growth in 5G in India. Since 6 GHz is the last remaining mid-band spectrum where city wide coverage can be provided with mobile networks, it is crucial that this band be allocated to IMT. Further, there is another growing concern of Wi-Fi 6E wireless routers operating on the 6 GHz band being sold illegally via e-commerce websites to consumers in India, although DoT has not decided with regard to its utilisation.

Quality of Service (QoS): Despite meeting TRAI’s stringent QoS benchmarks, TSPs face persistent challenges like Right of Way (RoW) issues, spectrum interference and infrastructure constraints, hindering timely network rollouts. The Telecommunications Act 2023 introduced critical RoW amendments for uniform State laws, but timely implementation is crucial, especially for 5G expansion. Meanwhile, TSPs view the newly proposed QoS norms, including monthly and site-to-cell level reporting, as impractical and overly burdensome.

Unsolicited commercial communication (UCC): TSPs, in collaboration with the government, have been addressing the concerns related to UCCs. In compliance with TRAI’s directives, telcos have implemented the Principal Entities-Tele Marketing (PE-TM) binding process to ensure traceable commercial messaging. However, to fully curb the menace of spam calls, the government should also bring the OTT communications service under the UCC regulation, as these unregulated platforms serve as the hotbed for such pesky communications.

Telecom Equipment Theft: Telecom equipment theft has emerged as a major issue affecting Indian TSPs, incurring an estimated Rs. 800 crore in losses already. Industry sources reveal that over 17,000 radio remote units (RRUs) have been stolen during the first half of 2024 alone, causing major disruptions in 4G/5G expansions and impacting quality of mobile services.

Direct-to-Mobile (D2M) network: The proposed D2M network poses new challenges for TSPs, as it undermines market fairness by creating a separate broadcasting network. COAI has called for transparent auctions of the sub-GHz (526-582 MHz) spectrum, integrating it into telecom networks to maintain fair competition. Additionally, the suggestion for a dedicated D2M network for disaster alerts is unnecessary, as cellular networks effectively deliver alerts via the Common Alerting Protocol (CAP) platform.

Progressive Measures Offer Respite to TSPs Amid Industry Concerns

Amidst these setbacks, there are progressive measures initiated by the government aimed at fostering growth and reducing financial burden on TSPs. The abolition of the Wireless Operating License (WOL) and the decision to waive bank guarantee (BG) requirements for deferred spectrum payments from auctions since 2012 are among the progressive measures in favour of the industry. The Hon’ble Supreme Court’s judgment affirming the industry’s right to claim credit for taxes and duties paid on towers and related parts emerge as further relief to the sector.

2024 marked a breakthrough year for Indian telecom industry, thanks to the massive collaborative efforts among operators, equipment vendors and industry experts, as well as the on-going support from the government, regulatory body and other stakeholders.  As the industry marches ahead with optimism, driven by aggressive growth strategies and network expansion plans, key challenges persist and they need to be addressed on priority. We are hopeful that TSPs’ continued collaboration with the government and other stakeholders will help them address these challenges to drive further innovation and propel the industry towards new milestones in the coming year.