India's Network Capacity Not Keeping Pace with Mobile Usage
Even as Indian telecom players make huge investments to keep pace with the rapid growth in subscriber numbers, poor quality of service (QoS) is a rapidly emerging concern in this sector.
An analysis by Crisil Research reveals that the number of base stations installed by Indian mobile service providers is inadequate to provide high-quality services to the rapidly growing population of Indian subscribers. Indian subscribers, on an average, tend to talk 50 per cent more than those in the rest of the world - the average minutes of use (MoU) in India, at 475 minutes per subscriber per month, is around 1.5 times the world average. However, the number of base transceiver stations (base stations) per million subscribers in India is only 25 per cent higher than the global average. Clearly, base station inadequacy is one of the key causes of poor quality of service such as network congestion, call drops, and poor voice quality.
The number of base stations that an operator has, is a crucial determinant of network performance in any environment. Shortfalls in respect of most external factors, such as spectrum, can be overcome by installing more base stations. Mr. Manoj Mohta, Head, Crisil Research,, emphasises, "Although network traffic has grown exponentially in India over the last two years - an annual subscriber growth of 73 per cent and an annual 17 per cent growth in average minutes of use (MoU) - operators have continued to focus on rolling out networks in newer areas over augmenting the capacity of existing networks. The telecom sector's long term growth prospects may be jeopardised if service providers do not act soon - we are of the view that Indian mobile operators need to install many more base stations per million subscribers to achieve adequate QoS."
Furthermore, with increasing teledensity, the goal of the regulator needs to expand from being almost exclusively focused on increasing coverage to promoting a balance between increasing coverage and improving QoS in covered areas.
Crisil Research believes that the regulatory regime in India now needs to catalyse the next stage of the Indian telecom revolution by putting in place a long-term spectrum policy aimed towards encouraging efficient use of spectrum, and implementing number portability to facilitate greater customer choice with respect to QoS.
Adds Mr.Mohta, "Our estimates indicate that the total capex needed to implement number portability is less than 10 per cent of the planned capex of the industry for just one year. Clearly, capex should not be an impediment to implementing mobile number portability in consumer interest".
Posted to the site on 27th September 2007
