The year 2013 has proved to be a revitalising year for the telecom industry in India. It has created a near perfect platform to define the next level of telecom growth in the country. Operators would be wary of policy changes in 2014, as the same may serve as the next game-changer or the next deterrent for the telecom sector. Let me focus on some of the key factors that will determine the indsutry’s fate in the New Year.
License renewal and spectrum pricing: The 900 MHz spectrum in the three metro circles would be up for grabs; something which the current owners would not like to let go. The entry of new players (2G or broadband wireless access or BWA or others) might cause problems to these incumbent operators.
Mergers and acquisition (M&A): The finalisation of the M&A guidelines would determine the extent of consolidation in the country, come what may.
Way forward on 4G: The decision on 4G spectrum and the subsequent auction may get delayed.
Definitely, 700 MHz will be a big game-changer and all eyes would be on the proposed swap option for players in 2300 MHz band. The region seems to be settling in for the TD-LTE (time division long-term evolution) with China also awarding spectrum in the TD-LTE band to all the three incumbent operators there. The same would strengthen the TD-LTE ecosystem.
Furthermore, the Telco collaboration being announced by two large “market movers” in the 4G arena can enable the deployment on a slightly steady pace through greater sharing of network and resources.
Subscriber growth: It might be practically difficult to achieve the 1 billion subscriber mark in 2014 as well, considering the overall focus on quality acquisitions and conversion of existing data subscribers to 3G/4G services. Rural penetration will continue to increase over urban penetration though at a snail’s pace.
All in all, the market stabilisation in 2013 has provided the much-needed respite to all the players in the telecom ecosystem.
The writer is partner, telecom, KPMG in India