India's mobile towers, growing at a compound annual growth rate (CAGR) of three per cent, is expected to cross half a million by 2020, from 400,000 towers at present, according to a report prepared by audit and consultancy firm Deloitte.
The tenancy ratio in the Indian telecom tower industry is expected to grow from 1.77 in the fiscal 2014-15 to 2.48 by 2020 primarily due to focus on data, Deloitte said in its report 'Indian Tower Industry', released on Tuesday.
The report, The Future is Data, talks about the future outlook of the tower industry in the country. Tenancy ratio refers to the number of tenants (operators) who have put up their antennae and other active infrastructure per tower.
Overall site tenancies, including 2G, 3G and 4G, are expected to increase to nearly 1,268,000 by fiscal 2020, according to the report.
The key driver of tenancy growth and the consequent demand for tower capacity include data growth resulting in demand for capacity sites, traffic offloading to micro sites, movement in value chain by tower players to expand presence in adjacent areas and new concepts like RAN sharing, network cooperation, and virtualisation.
"As India is at the cusp of a data revolution, the time is right to look into the future of the Indian tower industry," says Rajat Banerji, senior director, Deloitte in India. "With the increasing proliferation of smart phones among the Indian masses, data will grow exponentially, requiring a significant number of additional data sites over the next few years."
Driven by the increasing data usage, standalone data towers are expected to grow with a CAGR of about 125 per cent till fiscal 2020 while other towers are expected to grow with a CAGR of 1.89 per cent over the next five years, says the report.
At present, the number of standalone telecom tower for 3G and 4G across India are estimated to be only around 700.
Towers are expected to grow at 3 per cent CAGR for next five years and the total number of towers is expected to grow to more than 511,000 by FY2020, of which 30,000 towers are expected to be only supporting data sites.
The report said a decline in growth of voice usage along with industry developments and regulations in India had raised concerns about the growth of independent tower businesses, thereby affecting their cash flows and debt repayments.
However, the exploding data traffic is leading to building of smaller cell sites, and is expected to drive growth of the Indian tower industry in the future.
The government's Digital India initiative will provide further impetus and opportunities to tower organizations, especially by the two key initiative areas of the Digital India plan - universal mobile access and public internet access programmes.