New Delhi: Indian telecom infrastructure’s revenue potential is likely to reach Rs 21,500-Rs 31,000 crores by 2023. This uptick in growth will take place as latest information technology developments drive demand for new business models, Ernst & Young said in its latest study. It, however, added that in order to reach the said revenue potential, the telecom infrastructure sector will need investment in the range of Rs 66,000- 93,000 crores.
‘Future is promising for telecom infrastructure sector’
“Tower cos today are well placed to tap in on new opportunities that represent a revenue potential of Rs 215 billion-Rs 310 billion by 2023. With the high momentum from tower cos, and government’s push on infrastructure growth, the future is promising for the telecom infrastructure sector,” Prashant Singhal, Emerging Markets TMT Leader, EY said.
As the demand for data and 5G knock at the door, there is seismic shift in the telecom infrastructure industry, leading to plenty of opportunities for tower companies to shift their attention from a macro tower focused business, towards new business models hinged on fibre, small cells, data centres, Wi-Fi and smart cities and beyond, EY said.
Globally, tower companies have started reaping the benefit of results of new areas of investment, it said. “To tap on these emerging business models at full potential, it would require an investment of approximately Rs 660 billion – 930 billion in the 2018-2023 time-frame,” the report said.
Data demand expected to increase 5-fold by 2023
The telecom market has shrunk to a limited 4 (three private and BSNL-MTNL combined) operator format. The data demand is expected to witness five-fold increase 2018-23.
“Next-generation technologies such as 5G and IoT require formidable network performance, which has triggered the need for a diverse infrastructure mix. Infrastructure providers are in a strong position to tap on the new opportunities such as fibre, small cells, Wi-Fi and smart cities. Infra cos have the potential to tap 35-40 per cent of the overall addressable market of these new revenue segments,” Bharat Bhargava, Telecommunications Advisory Leader, Performance Improvement, EY said.
The study said that fibre presents significant potential as the overall fibre deployment in the country is expected to increase at a CAGR of 13.6 per cent, from 1.5 million cable kilometres in 2018 to 2.8 million cable kilometres in 2023. “Wireless, fibre to the home and common infrastructure would be the major contributors to fibre demand. The fibre growth is expected to see a fillip 2020 onward, with an expected launch of 5G in 2023,” the report said.