Economy

‘Internet economy to surge to $500 billion by 2022’

V Sajeev Kumar Kochi | Updated on March 09, 2018 Published on March 09, 2018

ARUNA SUNDARARAJAN Chairman, Telecom Commission

 

Mobile penetration in India is now passe. As phones get ‘smarter’ and more ‘affordable’, the next big development in the telecom sector is the increasing usage of mobile data. Betting big on India’s growing mobile data consumption, Aruna Sundararajan, Chairman, Telecom Commission, and Secretary, Department of Telecommunications, asserts that the current situation will facilitate a surge in the country’s internet and mobile economy applications, which is emerging as a key economic driver. There is a large volume of money transactions happening through online platforms, and this is expected toaccelerate, especially with the commencement of 4G and 5G services, she adds. She was in Kochi to launch Funds Genie app, an online mutual fund investment platform, developed by Geojit Financial Services. Excerpts:

Can you elaborate on the mobile data consumption and its potential in relation to the country’s economic growth?

India was in the 155th position in the world in terms of mobile data consumption until last year. Today, the country is in the first position, ahead of US and China put together. Internet mobile applications have emerged as a key economic driver, and the country witnessed a 17 per cent growth in net traffic in 2015-16, registering an increase in India’s GDP by $103 billion. Out of this, $40 billion came from mobile applications, and it took the software industry 20 years to touch $150 billion. The internet economy has already received $103 billion, and it is expected to increase to around $500 billion by 2022 with 4G and 5G services. In India, there are about 1 billion mobile users today, 485 million internet users and 316 million smartphone users. We are expecting around 650-700 million smartphone users by 2020. The increase in online usage would also pave the way for financial inclusion and financial penetration at a faster pace. It is estimated that 30 per cent of the per capita income is saved in India. However, with the increased usage of online platform, we expect a major portion of the income to come back to the formal economy.

What are the benefits of the relief package announced for the telecom industry?

The decision would facilitate greater investments, consolidation in the industry, and enhance ease of doing business as we are moving towards a four-player market from the seven earlier. It will also improve the efficiency of spectrum usage and enable to consolidate the spectrum when companies start merging. The waiving of spectrum payment from 10 to 16 years and the spectrum cap from 25 to 30 per cent will benefit the industry at a time when they are passing through a difficult period.

Are we ready to roll out

5G services?

5G is a new and emerging technology around the world. Trails are going on in China, US and in India. It is too early to speak about this now. But in India, both Jio and Airtel have already rolled out pilot projects and companies such as Ericson and Nokia are getting ready for the service. We are also having a high-level task force, headed by Prof Paul Raj, the inventor of MIMO wireless communications, for preparing a road map, which is expected to be submitted by June. All the companies have already started pilot projects for 5G on various aspects such as consumer development services. When it comes to 5G, India does not want to be a user and would like to be contributor in terms of standards and technologies.

4G speed in India is among the slowest in the world. What steps have you taken to improve its services?

It is true that 4G speed was slow, and one of the main constraints is the lack of fibre. We need huge quantity of fibre; we have doubled the fibre and towers in the last three years. If data is growing at 500 per cent, and voice at 26 per cent, there is a need to increase the fibre density and tower density to provide better quality. To achieve this, there is requirement for building a firm infrastructure. The telecom industry will be investing close to ₹4-5 lakh crore by 2022 for creating adequate infrastructure to cater to the demand.

What are your plans to make BSNL the premier operator in the country, considering its prominent place in the mobile network slot?

The whole strength of BSNL lies in wireless and rural areas. Once the initiative on BharatNet completes, we expect the state-owned entity to play a bigger role to retain its placein rural areas. With the rolling out of Fibre to Home technology, which offers high-speed broadband services, we expect to garner a significant market share for BSNL.

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Published on March 09, 2018
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