Following India's spectrum auction earlier this year, we sit down with one of the panelists from Meetup Asia's 5G panel to discuss how much of a game changer the next two years will be for the countries towercos
TowerXchange: Can you introduce us to Summit Digitel, and your journey up to this point?
My name is Devesh Garg and I'm the Chief Sales and Marketing Officer for Summit Digitel. I am one of the founding members of the company and have been working on the business since before the towerco was formed when Brookfield invested in the Reliance Jio towercos.
We have been operating for just over two years, and over that time have establish four regional offices, operational offices in multiple circles and our corporate office in Mumbai. We hope that by end of the year, almost all the offices are up and running.
Summit Digitel has ~154,000 operational towers having Reliance Jio as the anchor tenant on these sites. We have begun onboarding tenancies from the other MNOs as well – with Airtel operating from ~6,000 sites and BSNLs onboarding coming soon. We expect to see the sites that Airtel are co-locating from rising to over 10,000 by the end of the year.
TowerXchange: What did we learn from the 5G spectrum auction in India earlier this year? Are there any deadlines or timelines for rollout?
We were happy to see the private spectrum auctions conclude successfully and appreciate the support that the government in India is offering towards communication and digitalization.
The big takeaways from the spectrum are that Airtel and Jio have taken adequate spectrum to meet the requirement for their 4G and 5G networks across all telecom circles.
Vodafone Idea we expect will continue to focus on 4G development and be more strategic with its 5G rollout. Initially it looks like they will focus on main urban locations.
We understand from the market that all three private MNOs will roll out their network in a phased manner starting with the major metro cities, state capitals and other Class A & B cities within the next three to four months. Longer term we expect that Jio and Airtel will reach nationwide coverage in ~two years.
The other non-MNO entity that acquired spectrum in the auction is Adani, but our understanding from media reports is they have acquired spectrum for their proprietary private networks at this point.
The government owned operator BSNL is focusing on completing its 4G rollout and we are not sure about their plans with 5G as of yet.
How will 5G change the business models of towercos in India?
There are two main opportunities that we see from 5G to change how we are doing business. Firstly, if we look at 4G sites that will be upgraded with 5G technology we will be charging additional loading fees as a result of the additional power, additional weight and other additional transmission space required from the new technology.
Secondly the design of 5G networks, will require a much higher density of sites, specifically in urban locations. Where 5G is being rolled out as a standalone we have the opportunity to diversify our product offerings into smaller six, nine- or twelve-meters poles. We can also explore working with municipalities/ local authorities to offer MNOs sites using Traffic Lights, Lamp-poles and other street furniture.
We’ve seen this kind of infrastructure deployed in other markets that 5G has begun, and the margins for towercos are quite tight, However India is unique in the scale of which this infrastructure will be built – few hundred thousand tenancies/towers are required in the next five years to meet 5G requirements, and we expect 50-60% of these to be urban designs.
How are India’s towercos preparing existing 4G towers for 5G upgrades? Is there much structural redesign or strengthening that is required?
I don’t think it will be a huge problem. Most of the towers that have been built in the past couple of years have been built with a view of 5G on the horizon. Older towers were built for high tenancy ratios prior to the period of rapid consolidation in India. There may be some strengthening required here but it won’t be loads.
The main capex expense of 5G for towercos will be related to power. Additional grid power load, higher capacity of Diesel Gensets (if the site relies on one) and batteries for back-up power all need to be increased.
Although 5G is more efficient than 4G on a wat/bit basis, as you’ve said the overall power consumption will be much higher. How is India’s telecom power landscape equipped to deal with this increased requirement?
India recently transformed to almost near to an energy surplus country current government has put a lot of effort into encouraging renewables such as solar, wind, hydro and hydrogen power solutions as well as improving the quality and availability of the grid.
Currently power mix is ~80% grid power & ~20% other back up through DG Sets/Battery Banks at National level. . We expect this to steadily but surely shift towards good grid, especially in A-1 and semi A-1, and Class B & C cities across the country. Long term grid connectivity should not be an issue.
In the near term we expect to see innovation in the renewables space continue – especially in solar and wind. But it’s important to remember these solutions likely to be used as supplementary power generation rather than fully powering a site in near terms.
Besides this we are seeing a lot of innovation in the battery space. Lithium-Ion batteries are lasting longer, and reliability is improving for backup power as 5G makes this become more important. We are also seeing innovation from suppliers in Aluminium batteries as well.
This is being driven by the Electric Vehicle industry which the government is also supporting, but we are exploring to reap the benefits in telecoms infrastructure as well!
DoT ( Department of Telecommunications ) & TRAI (Telecom Regulatory Authority of India) have also been suggesting that there should be a big drive to fiberize India’s telecom towers in light of 5G rollouts for better end user experience. How are Summit Digitel approaching this? Will you build and lease fibre as well as towers, or will this be the responsibility of third parties.
Fiber will be the backbone of 5G. If we want a seamless 5G network, we need to have a strong and robust fibre network in India. Across the country just ~30 to ~35% % of towers are connected to fibre, but of our are closer to ~60% out of ~ 154000 towers
Our anchor tenant has already laid fibre and a commercial agreement can be agreed between them and other parties who want to share with them, but this is purely between the two MNOs.
In rural settings we want to be steadily increasing the number of sites connected to fibre, but we are already ahead of the curve with ~ 40% of towers are fiber connected.
DoT is working on to streamline Fiber laying process through Single window approval to ease out the approval system. This shall certainly help in faster roll out of fiberized sites.
We are very open to explore opportunities to own and play more in the fibre space. Currently we have an agreement with our anchor tenants to be able to act as a facilitator and bring other potential tenants to the table of they wish to share their Fiber. However, entire commercial arrangements have to be between MNOs only. We have no role on such agreements.
Summit Digitel are gold sponsors of Meetup Asia 2022. If you want to learn more about how 5G will impact towercos in India, or meet Devesh to discuss what else Summit Digitel are focusing on to support MNOs rollouts, make sure you register now.
