The capital investment planned by telecom companies in wireline and optical fibre networks over the next few quarters will have to be on par with their investment in wireless technologies to achieve quality as well as scale of service, the group chief executive officer (CEO) of optical fibre cable-maker and tech solutions provider STL, Anand Agarwal said in an interaction with Aashish Aryan. Edited excerpts:
We have now seen more than nine months of the pandemic. While the first three months of the fiscal year were spent in strict lockdown, there has been relative bounce-back in economic activity. What were the learnings at STL?
The biggest issue for us was working on project sites itself. In terms of augmenting the workforce and getting the right permissions, there were issues. A lot of time up until July-August was spent on that, along with making sure that everybody is healthy and safe. So those were the issues that we encountered. In hindsight, everybody can wonder whether we could have planned better or done something different. Right now, if people act in a more calibrated manner, we should be able to come out of this and leave the pandemic behind us. As far as STL is concerned, the shift towards digital is creating a global demand for us. That gives us good visibility in the short-to-mid term.
Is it a deliberate focus of telecom companies to move from a pure wireless play to a combined mix of wireless and wireline services?
Wireless gives you coverage and wireline gives you capacity. For example, for Jio (Reliance Jio Infocomm), 85 per cent of the towers are connected with fibre. Airtel is now adding much more to its present capacity. The more wireless services expand, the more wireline will be required. With 5G, the data consumption in India goes up more than 10 fold, which is nearly 10 GB per user per month right now.
The initiative of connecting villages and rural areas is a part of this expansion. Globally, this is being done, across Australia, the UK and the US. The idea there is not of just expanding into a new market place, but digital delivery of any and all services, such as healthcare.
What can we make of STL’s partnership with Airtel? Is it a sign of things to come wherein we can see more such telecom-fibre company partnerships?
In 2019, there was not a lot of investment happening in this sector in India. There was a lot of talk, re-calibration and recorrection. In 2020, with this sort of order book, the investments have started happening again. This is a macro opportunity. The scale is decent, the execution is very focused, and largely will happen in second half of this year. This is an integrated opportunity which takes a solution-based approach fibre, cable, interconnect, network design, roll-out. It will be an end-to-end solution.
What it does for Airtel is that it creates a robust backhaul, tower connectivity network for them. It starts preparing towards strengthening the fronthaul and the access networks also. Airtel has said it wants to connect 40 million homes over the next 18-24 months.
Speaking of new opportunities, there has been a lot of talk whether it is the right time to invest in 5G, given that of the three, two telcos have said that they do not have that kind of money to buy spectrum. Will India miss the 5G bus due to these issues?
Technologies are as great as the demand from consumers and the return on investment of the service providers. I think, India will see 5G happening in a focused manner by 2022 and the moving forward. Currently, the focus in on delivering good 4G service, and making sure that balance sheets of telcos are healthy. It is extremely important that we continue to have a 3+1 (three private telcos and a state-run telco) system in the country.
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