The once dwindling and boring fixed line telecom networks is back in the spot light with a spate of recent announcements by Indian service providers.
While the Rs 1,200-crore deal between Reliance Jio and Reliance Communication for sharing optical fibre cable is unprecedented, Airtel is also scouting around for a similar arrangement with other telecom players including Vodafone India and Idea.
Vodafone itself unveiled plans to launch fixed line services to corporate segment.
Until now, not many players were interested in fixed line networks primarily because mobile became the preferred mode for offering communication services. State-run Bharat Sanchar Nigam Ltd is the only player with over 20 million fixed line users. Even a pan-India telecom company such as Bharti Airtel has nearly 200 million mobile users across the country compared with just over 3 million fixed line telephone subscribers.
Data services
But this is now changing thanks to the uptake of data services.
Telecom companies are realising that data applications such as tele-education and entertainment services need huge amounts of bandwidth, which a pure wireless network may not be able to support.
For example, 3G operators with 5 MHz of spectrum are already struggling to offer the full suit of data and video services.
To tide over capacity problems, telecom companies are now looking to use optical fibre as the backbone for carrying data over a long distance and then route it to through the wireless network at the last mile.
This hybrid model will enable telcos to optimally use the spectrum and at the same time offer band width guzzling applications to consumers.
Hemant Joshi, Partner at consulting and advisory firm Deloitte Haskins & Sells, said, “Optical fibre network is needed for spread of rural penetration of telecom as it acts as back haul. Further with fibre, real broadband can be offered to the rural India which can help address challenges of healthcare, agriculture, water and education.”
“Machine-to-machine communication, which is globally expected to be a $ 4.5 trillion opportunity in 2020, has huge scope in India to solve many of the problems we face, and this needs fibre,” he added.
Expensive
But the challenge in deploying optical fibre cable network is that it takes a lot of time to dig up and obtaining right of way permission from local authorities. “Laying cable network is also expensive as it requires Rs 10-12 lakh per km. If a single operator has to cover the entire country with optical fibre, it would need to roll out 7-8 lakh km of cable,” a Delhi-based telecom company said, adding that sharing of existing infrastructure is the best way to address the growing need.
As of now BSNL has over 6 lakh km of optical fibre laid under the ground, RailTel has 42,000-route km of cable, Power Grid has 25,000 km and private players such as Bharti Airtel has 1.6 lakh km and RCom has 1.2 lakh km of inter-city cable network.
Vodafone, riding on a wireline infrastructure comprising 1.2 lakh km of fibre backbone, recently announced that it will start offering wireline services aimed at corporate customers.