Here are the key telecom trends to watch out for in 2016

Here’s wishing all TT readers a very happy and prosperous 2016. As the year 2015 comes to an end, we at Telecom Talk compiled trends for the coming year. Key trends that dominated 2015 were anticipation around launch of Reliance Jio’s launch; Call drops imbroglio; growing ecosystem of 4G; increasing affordability of smartphones besides regulatory guidelines for spectrum sharing and trading. Many of these trends are likely to continue in the coming year as well:

Tales Of Mergers & Acquisitions:

Consolidation kickstarted in 2015 and is likely to gather pace in 2016. Reliance Communications acquired MTS India and Idea acquired Videocon’s spectrum in two circles. RComm is in talks with Aircel for a possible acquisition. New guidelines on spectrum sharing and trading helped in pushing consolidation in the industry. The coming year will witness more consolidation moves with the incumbents trying to acquire assets of small players. Reliance Jio’s commercial launch of 4G services is further likely to spur consolidation as smaller telcos will not be able to sustain in hyper competitive environment.

Smaller telcos like Videocon, Aircel and Tata Teleservices could exit the industry in the coming year. They would be looking to form M&A or will explore spectrum-trading options.

What is worrisome is that these consolidation moves might push the industry in debt. The environment remains hyper-competitive which means that telcos will not be in a position to hike tariffs for a long time, especially so with the launch of a new player (RJio). All this means that the return on investment is some time away thus heightening the debt fears.

The Year Of 4G:

Airtel launched 4G services about two years back and ramped up their 4G presence in nearly 300+ cities. Vodafone India and Idea Cellular have also launched 4G at the end of 2015. The services are finally likely to gather pace in the coming year with the commercial launch of Reliance Jio likely to take place in March-April of 2016. RJio launched 4G services for its employees on December 27 this year.

India Mange More Data:

The contribution of data will increase for all telcos. As of now only data contributes around 18-20% of a telco’s revenue but this will increase significantly in the coming year as smartphone price plummets and telcos launch more and innovative data products for their subscribers.

WiFi-HiFive:

There were many WiFi initiatives announced in the year 2015 and this trend is likely to continue in 2016 as well. Vodafone and Airtel came together to form a new company, Firefly to bid for Government WiFi projects. Google also announced partnerships with Indian Railways to offer free WiFi to passengers. Besides Delhi Government also announced intention to offer free WiFi to the citizens. Telcos would continue to use WiFi to enhance network coverage and to also offload data. At the same time they will struggle to generate revenue through WiFi.

Customer Reaps Benefit:

The data tariff is expected to fall in the coming year much to the benefit of the subscribers. The entry of Greenfield operator, RJio will be disruptive and will ensure that the data tariff remains rock bottom. Fierce rivalry between Reliance Jio and Bharti Airtel will also ensure that the telcos are unable to hike tariffs.

“We see the industry-blended tariff falling 5-6% as Jio’s entry will arrest the rise in data average revenue per user despite rising data usage and as voice ARPU will continue to fall due to cannibalisation by data,” ratings agency Fitch says in a report.

Network Quality Becomes Prominent:

The year 2015 saw the issue of call drops zoom into prominence. Network quality will continue to be part of telecom discourse through 2016 as well. India’s largest service provider, Bharti Airtel recently announced investment of $9 billion in network modernization and upgradation. Besides that other telcos would also ramp up their spending on network modernization. As data consumption increases ubiquitous and seamless coverage will become of paramount importance for telcos to retain customers.

Telcos are also likely to increase investment in small cells and virtualisation of the networks.

The Devices Story:

The prices of smartphones will continue to dip and adoption of 4G smartphones will increase. RJio’s devices brand, LYF will bring VoLTE devices in India. Taking a cue from this, other manufacturers will also launch Voice Over LTE (VoLTE) devices. VoLTE device ecosystem will start to develop in 2016.

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7 Comments on "Here are the key telecom trends to watch out for in 2016"

 

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Ruturaj
May 2, 2016 5:57 pm 5:57 PM

You Broadband is offering me 510 GB to be used in 6 months at 18 mbps for Rs 8306, I was seeking reliable wired broadband provider which assures me full connectivity at all time, No one is confirming that, Funny Answer I get is Buy a leased line

Sayed Ejaz
January 1, 2016 5:37 pm 5:37 PM

Happy new year TT folks 🙂
May this year bring you more happiness …

To Tharun G,
Idea recently introduced Rs.97 pack 1GB 3G/4G pack for two days in kerala circle.
wtr data can be carry forwarded is not clear.

Proof : tinypic.com/r/21b6loh/9

Kindly update to TT .
so that people can aware of it . 🙂

Thanks.

Sachin
January 1, 2016 5:33 pm 5:33 PM

Contrary to what you think… Data prices will not fall. The merger of telecom companies is aimed at removing competition and introducing monopoly (read rcom and aircel merger)Data Prices will not fall unless new telecom player enter the market and get fresh spectrum such as 700mhz.
Uninor and Tata are looking for 700mhz spectrum and unless govt puts this highly efficient band for sale there is no hope for cheap data for consumers.

Niggachu
January 1, 2016 8:24 pm 8:24 PM

Data prices will fall, because of the simple fact that data consumption will go up. To drive greater data consumption on 4g devices they need to lower the price. Telecom industry is self regulating in nature and whatever hocus pocus AVOID may have done till now will not go on because things are about to change.

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