Telcos need to invest Rs 1 lakh cr each to provide seamless data services: Experts

Since 2010, telecom companies have invested Rs 3.27 lakh crore in spectrum auctions to support growth

With the government's move for a less-cash economy, telecom service providers will have to invest around Rs 1 lakh crore annually for the next five years to build a robust infrastructure for providing seamless data services, experts say.

Airtel is best placed, as it has got a payments bank licence. And, Vodafone has the experience of its mobile wallet, M-Pesa, which enables transactions between merchants and customers, an analyst told this newspaper.

Aditya Birla Idea Payments Bank, a subsidiary of Idea Cellular, and Aditya Birla Nuvo would also offer these services, with the latter having got a banking licence for digital payments. The new entrant, Reliance Jio, has also started its JioMoney e-wallet, to enable its users to pay from their bank accounts through the platform.

"The industry needs to invest Rs 5 lakh crore in the next five years to improve the overall infrastructure, including the data infrastructure," said Rajan S Mathews, director-general, Cellular Operators Association of India.

Since 2010, he said, telecom companies had invested Rs 3.27 lakh crore in spectrum auctions to support growth.

According to Prashant Singhal, global telecom leader at consultancy E&Y India, an investment in the range of $10 billion (Rs 68,000 crore) is needed over the next two-three years by telecom operators to make data services more seamless. "There is need for more investment for better coverage and capacity."

Sector experts feel spectrum requirement for mobile service providers have been met for the next five to 10 years. The need now is for infrastructure overhaul. The companies need to invest more on cell sites, towers and the like, for better customer service and a richer digital experience for users.

Despite the investment in spectrum, COAI still estimates an increase in the demand for licensed spectrum in the near future due to the increase in data services and growth in demand for multimedia content over the cellular network.

Mahesh Uppal, an independent expert, says cashless transactions involve very little additional data usage and therefore do not pose a new challenge for telecom networks. "Problems arise in areas where coverage is still poor. The larger problem is that users lack the requisite devices, familiarity with the technology and trust in the system," he added.

After demonetisation, Finance Minister Arun Jaitley announced a number of measures to provide a digital push to the economy, including digital payments for essential services and at public utilities. And, said a policy push was being envisaged by the government to take India to the next level.