It has been reported that there are plans of investing Rs 60,000 crores towards telecom infrastructure to meet the continuously increasing demand for data in India by Idea Cellular Ltd and Vodafone Group Plc’s Indian unit.  

The investment will apparently be spread out over a span of three years to expand and facilitate vertical growth. 

The merger that is imminent between the two giants, on the threshold of cumulatively becoming India’s largest telecom operator, has a new twist. 

Previous reports have already exhibited how India, currently, has the slowest 4G speeds in the world despite the fact that 82% of all mobile data traffic came from 4G networks. This demand is, not only expected to increase, but surge sixfold from the 20 petabytes it is now to 120 petabytes in the future. 

India, being the world’s second largest telecom market, both companies realise the requirement of strengthening the infrastructure that is currently in place in order to cater to the rising demand for data. 

Data wars

The investment comes as no shocker after most of the existing teleco’s in the industry are facing tough competition from Reliance Jio Infocomm Ltd since 2016, having triggered an intense price war. 

Cellular Operators Association of India (COAI) even issued a statement in which they claim that the recent Telecom Regulatory Authority of India (TRAI) regulations have been squarely in favour of one operator while placing the rest at a disadvantage.  Though Reliance Jio demanded an apology for such statements, Rajan Mathews (Director General, COAI) has clearly said that there is nothing for which COAI needs to be apologetic about. 

Bharti Airtel, another major player in the Indian cellular operations market, has already announced a Rs 60,000 crore investment to expand its network back in 2015. Project Leap, as it was called, should be a major factor in improving the network quality of the company.

Even Ambani’s Reliance Jio made an investment of Rs 1.5 trillion to set up its telecom infrastructure when it initially launched into the market. This included setting up the telecom towers, connecting fiber optic cables and purchasing the spectrum.

The boon of the merger

The $23-million merger isn’t only a big deal because it will combine the companies in name and volume, but also because it will generate synergy that will exponentially boost what the companies would’ve been capable of individually. 

It is expected that things will be final before 31 March. They have already received a go ahead from the National Company Law Tribunal (NCLT), the Security Exchange Board of India (SEBI), and the Company Commission of India (CCI). All that is left is the vote of approval from the Department of Telecommunications (DoT).

So how this affect you as a consumer? 

Where ever there were issues of overlapping spectrums, you’ll have large chunks suddenly opening up making data transfers faster than before. Current speed limits are capped at around 20-30 Mbps but with the infrastructural boost, speeds should ideally be able to reach 200-300 Mbps.

All in all, it’s nice to see cellular operators taking charge of the situation and implementing change even though the motive behind that may just be the competition from Jio. 

Credit where credit is due, the introduction of Reliance Jio did bring about a boost in data usage recorded at 200 million gigabytes in June 2016 to 1.3 billion gigabytes by March 2017. It’s further expected to grow to 1,608 petabytes by 2020 as per Deloitte estimates.

Infrastructural changes should no longer be just an option or a marketing gimmick. They are a prerequisite for the telecom operators to stay relevant because the demands of the people are far beyond the capabilities of the current infrastructure.