Telecom Infrastructure Revenue Potential May Touch Rs 31,000-Crore By 2023: EY Study
Indian telecom infrastructure’s revenue potential is expected to reach Rs 21,500-Rs 31,000 crore by 2023, as latest information technology developments are driving demand for new business models, according to an EY study.
However, in order to catch up with the revenue potential the sector will need investment in the range of Rs 66,000-93,000 crore, the study, which was released yesterday, said.
“Tower companies 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 companiess, and government’s push on infrastructure growth, the future is promising for the telecom infrastructure sector,” Prashant Singhal, emerging markets TMT leader at EY, said.
With the demand for data and 5G knocking at the door, there is a seismic shift in the industry leading to plenty of opportunities arising for tower companies to shift their attention from a macro tower focused business, towards new business models hinged on fiber, small cells, data centers, Wi-Fi and smart cities and beyond, the study 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.
The telecom market has shrunk to a limited four (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 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 percent of the overall addressable market of these new revenue segments,” Bharat Bhargava, telecommunications advisory leader—Performance Improvement at EY, said.
The study said fibre presents significant potential as the overall fibre deployment in the country is expected to increase at a CAGR of 13.6 percent, from 1.5 million cable kilometers in 2018 to 2.8 million cable kilometers in 2023.
“Wireless, fibre to the home and common infrastructure would be the major contributors to fibre demand. The fiber growth is expected to see a fillip 2020 onward, with expected launch of 5G in 2023,” the report said.