4G will gain traction in 3-5 years: Viom Networks

As telecom operators ready themselves to roll out 4G (fourth-generation) services, Viom Networks, the Srei group-promoted telecom tower company, is betting big on this. There would be new rollouts due to operators who have to set up last-mile connectivity for the technology. This, in turn, would lead to more towers on rent.

“With India being at the cusp of mobile data growth, carrier network infrastructure would witness continued investments, as operators invest in favour of data traffic growth and 3G and 4G technologies gain momentum. For 4G to gain traction, it would take three to five years. But it would start this financial year. 4G will pick up in a phased manner,” said Syed Safawi, chief executive officer Viom Networks.

The tower company believes this technology would create a market opportunity. “Reports predict wireless network traffic would grow another ten times over the next five years, with about 75 per cent of this growth expected to be delivered over traditional macro sites, primarily towers,” Safawi said.

The company also has technology for micro site infrastructure such as in-building solutions and distributed antennae systems. It is estimated these new technologies, along with other small cell installations, would support the remaining 25 per cent of infrastructure requirement. The company feels there would be good opportunities in the towers business, as well as in micro site network infrastructure.

Bharti Airtel has already launched 4G services in four circles, while Reliance Industries is expected to introduce these services this year. Bharti already has its own tower company, Bharti Infratel. It also has stake in Indus Towers. Recently, Reliance Jio formed a joint venture with Reliance Communications to use the latter’s tower infrastructure. However, to provide complete network coverage, both Bharti and Reliance would need many more towers across locations.

Viom is happy with the growth 3G services have seen in India. The technology was commercially deployed within a short period. Currently, six per cent of telecom consumers avail of this service. “Now, to provide seamless outdoor as well as indoor coverage, operators are strengthening their 3G networks in about 1,000 towns where they had rolled out the service initially. 3G additions are increasing at a fast pace. With further clarity on the policy front, 3G uptake would match the surge in data consumption currently being seen in the country,” said Safawi.

Viom has an average tenancy of 2.3x, indicating the number of slots its towers occupy. “We expect with increased clarity for telecom operators over the past few months, the network investment cycle would be enhanced in 2013-14 and beyond. We are witnessing early signs of this,” said Safawi.