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Telcos like Nokia networks, Huawei, Ericsson eye a share of over $1-billion 4G revenue

Economic Times:  August, 2015

New Delhi: Telecom equipment makers such as Nokia Networks, Ericsson and Huawei are eyeing a share of an over $1-billion (about Rs 6,600 crore) revenue opportunity as India's mobile phone operators prepare to launch high-speed broadband services on the 4G LTE technology.

"4G presents an exciting opportunity even before the launch as we assist our customers to prepare the network to deliver on the promises which the technology holds," Srini Sundararajan, president and managing director, Alcatel-Lucent South Asia told ET. Alcatel-Lucent is in the process of merging with Finnish rival Nokia Networks.

Market leader Bharti Airtel was the first mover on 4G, and has already commercially launched services in 296 cities and towns. Mukesh Ambani-owned Reliance Jio Infocomm is readying to launch its own 4G services commercially around December. Incumbent rivals Idea Cellular, Vodafone India and Reliance Communications have also announced launch plans for their respective 4G services — either later this year or early next.

Industry data suggests that 73 new 4G networks are expected to be deployed in the next one year. As of now, 9,674 4G mobile sites have been installed so far in the country to facilitate ubiquitous coverage.

The total capex spending by mobile operators in India is estimated to be between Rs 27,000 crore and Rs 30,000 crore in 2014-2015 (excluding spectrum payouts), as per Analysys Mason, a consulting firm. Analysts expect annual capex to grow 10% annually over two to three years, starting 2015-2016.

"4G network infrastructure market opportunity alone, inclusive of network software, is expected to be somewhere between $1 billion to $1.2 billion over the next twoyear period," estimated market researcher and advisor Deepak Kumar.

Nokia has already bagged a $200-million contract from Bharti Airtel to build the country's first 4G network in the 1800 MHz band in six telecom zones, apart from the world's largest IP multimedia system (IMS) deployment deal worth around $100 million that will allow voice calls over IP-based network to facilitate VoLTE for Jio. Late last year, Sweden's Ericsson also said it had secured a contract from the market leading telco for supply of base stations and other equipment for its 4G network. Ericsson though didn't provide the deal value or the zone details.

"4G in India is in its early stage, although the country has already has 5.5 million 4Gcapable devices but only about 85,000 subscribers are active LTE users. It indicates significant opportunity for selective rollout of 4G networks and services in the country," Amit Marwah, Head of Technology, India Region, Nokia Networks said.

Arecent Ericsson Mobility Report finding said that around 40% of India's population will be covered by 4G-based networks by 2020, which the company feels provide immense headroom for the network segment.

"(4G) technology is ideal for high-bandwidth communication like video streaming, as well as for less demanding data services and telcos will continue to make investments towards this," Ericsson VP and Head of Engagement Practices Nishant Batra said.

Chinese telecom network vendor Huawei believes that it expects 4G launches in more Indian cities soon as the ecosystem is shifting towards a maturity level. "In order to provide better video experience and fulfil the end consumers' bandwidth-hungry requirements, 4G is the most suitable solution for telecom service providers," Huawei Marketing and Integrated Solutions Director Chandan Kumar said.

Huawei is deploying 4G LTE mobile broadband services network for Bharti Airtel in Karnataka while the telco has given a similar task to its rival ZTE in Kolkata circle.