Network densification and data speed in India, are HetNet and small cells a solution?

• Worldwide data speed, where does India stand?
• Reasons for slow internet speed and status of the Indian telecom tower infrastructure
• How small cells fulfil data speed requirement and solve densification problem

Digitisation and 5G are now talk of the town and hold utmost importance on every government’s agenda for the growth of digital infrastructure and economy. However, the developed world is leading its march towards cutting-edge technology, on the other hand, the developing world is lagging under the garb of outdated digital infrastructure and slow pace of investments. Nowadays, the world is moving from legacy technologies to new and emerging technologies such as machine learning, artificial intelligence (AI), big data, cloud, internet of things (IoT), blockchain, etc. As these technologies make a headway towards mass public adoption, the major hindrance for their growth is the slow speed of the internet in developing economies such as India, among others. The slow speed of the internet diminishes users’ experience and negates the full potential of the technology. In order to overcome this phenomenon, the developing countries will need to invest heavily in the digital infrastructure.

Among the emerging economies, India is one of the fastest growing economies in the world with a 6.7% economic growth rate, while the global growth is projected to edge up to 3.1% in 2018 (Source: World Bank Global Economic Prospects report). But when it comes to digital infrastructure, India has faced issues in implementation and integration of the same efficiently. 4G availability in India is fair, but in terms of acceptability, the country is ranked at 14^th as per the data analytics firm OpenSignal. Users have access to network 86.26% of the time, but the speed lags the global average speed of the internet. India ranks 114^th in the mobile upload speed and 61^st in the broadband upload speed, respectively. Qatar has the highest wireless download speed at 62.63 Mbps, while Singapore has the highest broadband download speed as 181.47 Mbps as of July 2018.

In India, the number of internet users increased rapidly over the years. The internet penetration in urban India was 64.84% in Dec. 2017 as compared to 60.6% in Dec. 2016 (Source: IAMAI & kantar IMRB I-CUBE). According to the report, the number of mobile internet users increased by 17.22% from Dec. 2016 and reached 456 million users by Dec. 2017. The data usage on the internet is expected to grow 4x times to 6.5 exabytes per month in 2021 from 1.7 exabytes per month as of 2016 at a CAGR of 30% (Source: Cisco’s latest Visual Networking Index [VNI]). According to a Microsoft report, India is expected to emerge as a leading player in the internet world and the number of internet users in the nation is projected to reach 700 Mn by 2025 from mere 5 Mn at the starting of the century. As on Dec. 2017, the overall internet penetration is 35% of the total population (Source: Internet and Mobile Association of India & Kantar IMRB).

But the growth in telecom infrastructure has not matched the pace of growth of the internet users in India. The speed of internet is somewhere directly related to the tower infra and India is still lagging behind in terms of a number of towers required to serve the growing internet users. Though the number of towers has quadrupled from 100,000 tower (2006) to nearly 460,000 towers currently (Source: TAIPA-Towers and Infrastructure Providers Association), still there is a long way to go with the current ecosystem. A higher user burden on towers leads to a low signal strength, which leads to less connectivity and less coverage resulting in customer dissatisfaction, increase in subscriber churn rate and huge revenue losses for Telcos (telecommunication companies).

China has the largest number of internet users in the world and it is investing heavily in tower infra for a better user experience. On the contrary, India’s tower burden is almost double than that of China and Japan. One can argue on numbers in the United States, which has a higher user burden per tower and still the internet speed is almost thrice than that of India. The reason for the deviation is the huge number of small cells sites in the country, which are far better in terms of speed than tower with a lesser cost of installation. According to a CTIA report, the United States has 323,448 cell sites apart from towers currently. Towers provide a solution for both wireline and wireless communication, while the usage of small cells is largely restricted for wireless communication. Addedly with the increasing penetration of mobiles globally, the internet world requires an end to end solution to improve coverage and the overall network capacity in highly crowded places. The wireless study shows that 70% of the mobile voice connections take place indoors, whereas 80% of mobile data connections take place indoors too. Thus, in order to cater to this exponential increase, network needs to get closer to end users, wherein small cells can be a big boost. Televisory believe, telecom operators should take measures for enhancing the capacity gap and not just coverage in the developing and growing countries like India where penetration is increasing by leaps and bounds and is further anticipated to improve in the coming years.

Another reason is that India is currently using 4G LTE band having 2300 to 2400 MHz (TD-LTE) frequency range, while the United States provide 4G LTE band from 700 MHz to 2100 MHz only. The lower band typically 900 MHz is superior to the higher band like 1800 MHz, this is because of the law of physics which states that the higher the frequency band the lower will be the wavelength. Signals sent out using lower frequency band will travel wider distance than signals sent on a higher frequency band. Moreover, in India, only 25% of towers carry fibre optics as compared to China, the US and Korea, where towers carry as high as 65-80%. In fact, according to the EY data, the population ratio to fibre deployment in India is .1x, while China has .9x and the US has 1.4x.

Furthermore, as India is planning to launch 5G, this will again boost mobile data usage and increase traffic. The demand for network densification and improved indoor coverage is increasing day by day. In order to meet the growing requirement of capacity, one cannot rely only on new technology or new spectrum which is still limited. For this, deployment of small cells can play a major role. The cost involved in deploying macro cells (towers) always hinder the plan to increase the density of towers. As the size and cost involved are lower for small cells with deep indoor coverage, these are crucial to expand the capacity of the mobile network in dense areas. Small cells are efficient and provide a pathway to network densification for the internet service providers as they are easy to install (small cells can be installed anywhere like on billboards, poles, etc.), while these are affordable than constructing large traditional towers with deep coverage. Globally, small cells are moving faster and overtaking the macro base stations. According to Kelly Hsieh, a research director of TrendForce, it is estimated that the global deployments and installed base of small cells will reach 2.838 million units in 2018 and 4.329 million units in 2019, marking an annual growth of 52.5%.

India has witnessed many changes in the last few years as the focus has shifted towards the growth of operational prudence. Tower companies need to look beyond traditional business models and capitalise opportunities in the areas of data traffic offloading, fibre backhaul, small cells, IBS, etc. The improvements in the fibre optic and microwave backhaul networks will go a long way in ensuring a better internet service for everyone. Additionally, various government programs such as Digital India, Smart Cities and BharatNet project are also seen fuelling additional requirements. According to Invest India, tenancy ratio of the telecom tower in India will increase from 1.95 times in 2016 to 2.9 times by 2020 due to the advancement of technologies from 3G to 4G and the onset of 5G technology. Further, as per TAIPA, India’s tower industry requires at least 100,000 towers across the nation in the near future, which will need a massive investment of INR 20,000 crores in the next few years. Telecom operators are required to offload traffic from traditional tower to small cells (micro tower) in order to meet the eminent data demand with low investment. Televisory believe, Heterogeneous Networks (HetNets), comprising a mix of small cells and other technologies are the need of the hour and can solve the future requirement of increase in capacity and higher data speed. The benefits of small cells like higher quality, lower cost and faster service are not only limited to customers but also to operators as they would need to handle the reduced amount of traffic on expensive macro cell network/s.