17 Nov 2017
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Challenges and opportunities in a digital world

MUMBAI:  There is presently a lot of action going around 4G and the Indian government’s Digital India initiative to bring digital connectivity and content to people who may previously have been unconnected. Nevertheless, there are challenges.

One of these challenges is that most content on digital platforms is still in English. The other challenge is, while the infrastructure is there, wired broadband connectivity is a problem. Another challenge is for telecom operators to find the right price point given that India is a price-sensitive market.

These points were made at the session ‘Connecting the unconnected: upgrading technology and infrastructure in the last mile’ at FICCI Frames 2017.

Indiacast Media Distribution Group CEO Anuj Gandhi noted that a lot of content was there on online platforms like YouTube. “Infrastructure is building out, but wired connectivity is a challenge. The last mile belongs to the cable operator and the multi-system operator (MSO). We missed the bus.”

The last mile is needed for 4G. If this does not work, then the digital divide will remain.

The infrastructure has to evolve to get to 100 Mbps. On a positive note, smartphones have filled a screen gap. After all, the majority of homes are single TV. Also, there are fewer theatre screens, which means smartphones will continue to play an important role going forward.

Cellular Operators Association of India DG Rajan S Mathews pointed out that India had the largest telecom data network. The challenge is that people want it for free. Therefore, telecom operators have to figure out how to monetise it. There is the top end, but they have other options to access content.

“You look at the mid and lower segment and these are price sensitive. Members of our association are looking at 5G. Investments of $8–10 billion a year are happening. The scope and intensity of change will be considerable,” he stated.

In the US, there were protective mechanisms in the early years of telecom which companies like AT&T benefited from. The same applied to cable. Conditions were favourable in the early stages. India has not had that. Before the launch of Reliance Jio, consumers were lucky if they got 1GB a month. Now it is 10GB. Consumption is there, but the issue is the price point.

He also referred to net neutrality where two-sided agreements are being looked at. Hence, the telco can ask the content provider if the consumer can get it at subsidised rates.

What nobody knows is how the paid economy will turn out in terms of the number of paying subscribers. But Gandhi noted that the market would segment itself. There would be super premium and premium. At the same time, there would be the long tail of Tier II and III cities.

India’s ambassador-designate to the WTO JS Deepak noted that telecom was dependent on the private sector and had created broadband infrastructure. Mobile has helped us to leapfrog stages of development. As much as 77% of the country’s population have access to a mobile phone. However, there are challenges. For example, only 18% of rural homes are digitally literate. If this is not addressed, then the digital divide will widen.

Besides, most digital content is in English and so the target is 300 million out of over a billion people. There is little content in other languages and cybersecurity is another issue.

On a positive note, he spoke about the government’s Bharat Net initiative. The aim is to provide broadband to gram panchayats. But one also needs to ensure quality of service and content. In terms of mobile broadband, spectrum is no longer an issue. Network rollout is galloping. 4G can help download movies and help in other areas like tele medicine and e-education.

The phone has become an instrument of knowledge and power. He highlighted the importance of three partnerships. The first is between the telcos and content providers where entertainment, e-commerce, etc. can be offered. The second is the government industry partnerships for spectrum reform and infrastructure rollout. The third partnership is between telecom operators themselves.

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