Digital Telecommunication Revolution Innovation KPMG Oct 2018

New Digital
Horizons
Connect. Create. Innovate.
India Mobile Congress 2018
October 2018
KPMG.com/in
New digital horizons:
connect, create, innovate
1 Current state 2 Where we want to be
Trillion dollar digital economy
1.1+ billion subscribers dream:
Convergence of connectivity and
advanced technologies like AI,
Teledensity at M2M, IoT, analytics is bringing
India closer to its trillion dollar
89.72 per cent digital economy dream. Telecom
companies (telcos) having a direct
interface with end users, can
512 million internet play a central role in the digital
subscribers revolution by moving beyond
connectivity. It can be the platform
to allow the interplay of these
Government initiatives advanced technologies to create
digital solutions across varied
driving digital growth industries. In the next few
years, a significant portion of
revenue will be growing from
FDI ~ USD5.9 billion digital initiatives enabled by
during Apr-Dec 2017 5G network.
3 Challenges
Falling Huge capex Debt repayment of USD119.44 billion
revenues requirement as against its annual revenue of around
(ARPUs) (USD17 USD38 billion
billion FY19-20)
© 2018 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
4 How to get there
Connect Investments in
1 rural India 2 content ecosystem
Enhance start-up
Create networks
3 ecosystem to
foster innovation
4 of the future
Expanding business
Build a customer
5 centric ecosystem 6 models beyond
connectivity
Significant intervention from all

stakeholders (public and private) required
to uplift the industry and realise the
potential that new digital horizons hold
5 Need of the hour
Rationalise Robust cyber,data
Increase overall security framework
spectrum allocation Bridge skill gap
fiberisation and data privacy
and pricing
norms
Simplification and Favourable device, Redefine Adjusted

Rationalisation of
uniformityof RoW component Gross Revenue
taxes and levies’
policies manufacturing (AGR)
Public Private
Lower cost
Partnership(PPP)
of backhaul
models for shared
connectivity
infrastructure
© 2018 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved
Foreword
Indian Telecom Industry has including over 8600 villages and I am happy to be part of the IMC
witnessed one of the fastest paces installation of over 300 mobile meet this year, with a theme of
of expansion in the recent years. tower sites. We are into the 4th connect, create and innovate that
The government and the industry year of Digital India initiative, in this resonates well with the direction
have worked together to make period we have tripled our telecom that the industry is headed
Indian Telecom Network, the 2nd infrastructure, we are spending towards. I trust a meet like this
largest in the world with a total 9 billion in providing optic fiber in will provide an opportunity for all
subscriber base of over 1.1 billion rural areas. The government will the stakeholders involved – big or
and an overall tele density of close be setting up over 2.5 million Wi-Fi small to showcase their expertise
to 90 per cent. The government hotspots across the country to and be part of the larger system
has a digital vision for India and the enable connectivity covering the that drives India forward, digitally.
strategy is premised on access and urban and rural areas. Wishing you all the very best.
inclusion, giving a digital identity
to everyone and delivering next Adaption of technology, whether
generation goods and services to applications or services, is best
all citizens. understood in the local languages.
We are also working on a mass
The National Digital digital literacy program so that
Communications Policy (NDCP) people at the bottom of the
2018, was approved by the pyramid will not merely have
cabinet this year to lay out policy access to technology but also will
and principles framework that be able to leverage technology
will enable creation of a vibrant in their local language. This will
competitive telecom market. The enable this section of the society
key themes that the policy aims to stay connected and digitally
to look at include, the regulatory
and licensing framework
informed. Aruna Sundararajan
impacting the sector, connectivity While digitalization is progressive, Telecom Secretary and
for everyone, ease of doing the connected space comes Chairman of the Telecom
business and adoption of new with challenges and there Commission
technologies including 5G and the should be a strong focus on Government of India
IoT to accomplish the mission to security. Every nation faces cyber
connect, propel and secure India. security challenges. Countries
The common underlying themes like India, where digital growth
of ‘Make in India’ and ‘Skill India,’ has been exponential, the
would be inclusive elements of the magnitude and complexity
above. of these challenges become
multi-fold. A comprehensive
In a connected era, easy access cyber security policy along with
to information should be enabled the sectoral CERTs are the key
for all citizens. We have begun building blocks of India’s cyber
a number of initiatives like security infrastructure. India is
BharatNet, Network for Left Wing currently working towards putting
Extremism Areas, connecting a comprehensive data protection
remote areas of the North East framework in place.
Foreword
It gives me immense pleasure services and revenue streams for acknowledge the efforts made by
to bring to you IMC 2018. IMC all players in the ICT ecosystem. IMC and KPMG in India’s team in
with its vast range of dignitaries, However, to untap its true potential making this report insightful.
speakers and attendees is playing it is important that due emphasis
Thank you.
a crucial role by bringing all the is given by the government
players in our telecom ecosystem and industry on spectrum
together on a single platform. The harmonization, infrastructure
future of our industry is defined creation and introducing relevant
in platforms like these where all regulatory measures.
stakeholders connect, create and
IMC 2018 plans to focus on how
innovate which strongly aligns with
the trinity of regulators, academia
our central theme this year.
and industry can collaborate to
Telecom provides connectivity CONNECT India, CREATE an
that fosters inclusion, drives ecosystem for ICT players to thrive
empowerment and enables and contribute to the growth of
transformation. The near digital India and INNOVATE to
ubiquitous reach of the mobile
makes it the best tool to deliver
bring a faster growth in technology
adoption, network solutions that
Rajan S Matthews
development to the very last will allow an unforeseen socio Director General
mile through ‘Digital India’ and economic development of India. COAI
a ‘mobile first’ approach. It is
I am pleased to inform you
important for the future of India to
that IMC, Cellular Operators
have a robust telecom network as
Association of India (COAI) along
India has an opportunity to power
with KPMG in India has brought
ahead of the rest of the world as
out a comprehensive report on
a digital economy. The promise of
how the New Digital Horizon is
5G is tremendous and it will be
un-flolding for India. I would like to
a catalyst in the evolution of new
Foreword
Welcome to the 2nd edition of academia, industry would be a key
IMC 2018: New Digital Horizons: differentiator that will make India a
Connect. Create. Innovate. digital leader.
The event is aimed to explore
Our research paper, written by our
the current dynamism in the
knowledge partner KPMG in India,
telecommunications sector which
studies the evolution of networks
has become a catalyst for a digitally
of the future and dwells into how
empowered and connected India.
technology will be shaping our
With the stupendous success lives. It identifies some of the
from last year, IMC has become trends on customer expectations
South Asia’s largest digital
technology forum bringing
and how telecom companies are
evolving their business models
P Ramakrishna
CEO
together the congregation to meet those expectations. It
of regulators, academia, is clear from the report that India Mobile Congress
researchers, industry leadership only companies which thrive
under one roof. It is aimed to on innovation and cutting edge
bring together the converging technology are the ones which will
communication industry on one be able to leapfrog the exponential
platform in India, to showcase growth offered by the sector.
emerging opportunities and
I conclude by thanking the team at
trends, technologies, business
IMC, COAI, and KPMG in India for
opportunities, applications,
working together to successfully
platforms, government policies
deliver this program to you. Our
and initiatives.
aim is to be a one-stop-shop expo
India has the world’s 2nd largest destination for the mobile industry
telecommunications network and in India and South Asia and
internet user base. It is becoming ultimately, gain from the insights
the hotbed for innovations in and partnerships forged this year
telecom services, equipment in India.
and network technologies. As
Thank you.
new technologies like 5G and IoT
are ready to usher an industrial
revolution, building a collaborative
framework between regulators,
Foreword
The amalgamation of players in media content to the end consumer of media. Rapid use of machines
the ICT sector is creating new either by way of collaboration or to augment human intelligence
landscapes. Technology is fuelling through creation of their own. The in creating a new paradigm of
the shift and shaping a new industry overall, while experiencing opportunities impacting consumers
narrative of the ICT ecosystem disruptive innovations is also and enterprises. As we look into the
which in my view has assumed witnessing the slow convergence future, networks have the potential
critical propositions with the market of the telecom industry with media, to be an intelligent platform to aid
boundaries dissolving and changing using technology to drive costs consumers and enterprises to reap
operating models. High-speed down. It is undisputed that the ability benefits of new age technologies.
connectivity, strategic collaborations of ICT companies to adapt to the ICT businesses would need to re-
and altering growth strategies might continuously evolving technologies evaluate their existing strategies and
well determine the next phase of to suit the changing needs and operating models to leverage the
growth of the industry. preferences of consumers is all good emerging opportunities and sustain
news for them but, it could leave the against new evolving challenges.
In association with the IMC and
telecom operators in a precarious
COAI, KPMG in India is pleased
situation, where only those players
to present the report – ‘New
with deep pockets could survive.
digital horizons - Connect, create
and innovate’. This report traces The market has already witnessed
the evolution of various network the consolidation of two major
enabled services over time and helps players while, the other four
understand how telecom services players are unable to sustain their
consumption has been changing businesses and are on the verge
over the years and how it is likely of exit. The industry might see only
to impact the larger ecosystem of 4-5 main players in an aggressive
telecommunications in our country. telecom market of the future. To
conquer this frontier, the operators
The growth of the Indian economy
is closely linked to the rise of
will have to be ready for the ‘Digitally
Native’ consumers who expect
Arun M. Kumar
the telecommunications sector Chairman and CEO
innovative, converged services of
as they are intricately linked to KPMG in India
impeccable quality delivered to them
connectivity as a fundamental
seamlessly. Enhanced customer
requirement for driving businesses.
experience coupled with exceptional
The telecom sector in India has
quality of services shall act as the
witnessed immense disruption
key differentiators, which would help
in the last few years. This
the operators not only retain their
phenomenon has propelled a shift
existing customers, but also acquire
in the user behaviour with the
the new ones.
passive consumers of voice and
SMS services becoming active The next phase of growth in the
participants. They are now one of the industry is hinged on convergence
largest consumers of mobile data of ICT. Digital technology, coupled
and high bandwidth applications like
video streaming and social media.
with radical shifts in consumption
patterns have undeniably resulted in Mritunjay Kapur
The consumers have benefited the blurring of boundaries that define National Head
immensely from discounted pricing the ICT sectors. ICT convergence Markets and Strategy
due to hyper competition, availability is now a reality and is expected Head - Technology, Media and
of affordable smart phones and to cause significant disruptions Telecom
evolving ICT infrastructure. across the entire value chain. Very
soon, the traditional ways of media KPMG in India
Furthermore, the operators are
consumption shall make way for on-
going the innovative way to offer
demand and dynamic consumption
Table of
contents
1. Executive summary 01
2. Telecom sector - the ground covered so far 05
3. Connect the unconnected 11
4. Create an ecosystem for digital enablement 21
5. Networks for the future 27
6. Innovate beyond connectivity 39
7. Technology shaping our lives 47
8. Challenges to digital penetration and way forward 77
01
Executive
summary
02
The Indian telecom sector has charted an Connect the unconnected

unparalleled growth story. With over 1.1 billion
subscribers, overall teledensity around 90 per cent With around 67 per cent of our population06 living in
and 512 million internet subscribers01 as on June rural areas and the rural teledensity is 57.99 per cent
2018, it stands tall as second largest in the world. In as on June 201801, rural India presents a gigantic
FY17, the Indian telecom sector contributed about opportunity for growth. The stark digital divide is
6.5 per cent of Gross Domestic Product (GDP)02 and evident by the low internet penetration of 19.48 per
plays a pivotal role in creating the building blocks cent in rural areas01.
of the digital economy which is estimated to be However, rural telecom will require a serious revamp
USD280 billion as of FY1803. of backhaul connectivity and fiberisation. Fiberisation
of backhaul will increase the capacity and reduce the
The telecom sector is at the forefront of the digital
latency period and is critical before 5G deployment.
revolution and the dream of a trillion digital dollar
In India, about 80 per cent of cell sites are connected
economy will be achieved through convergence and
through microwave backhaul and only 20 per cent
capitalisation of multiple technologies such as AI,
through fibre07. However, 70-80 per cent fiberisation is
Machine-to-Machine (M2M) and IoT and collaboration
required for effective network roll-out for 4G and 100
between government and industry players. While the
per cent fiberisation for 5G08.
growth story has so far been stupendous and holds
enormous potential, the sector currently faces an In regions where fibre backhaul is not possible,
uphill task of debt repayment of about USD119.44 higher-capacity microwave links will have to be
billion as against its annual revenue of USD38.78 installed. E-band and V-band spectrum needs to be
billion03. Given the industry’s average return of capital allocated to telcos at the earliest so that they can
employed at 1 per cent, there is a dearth of funds for utilise them for low-cost, high last-mile connectivity
the huge capital expenditure that lies in store for the to base stations. While some telcos are currently
sector. focusing on expanding the reach of fibre network
to homes, policy amendments encouraging active
This situation is further compounded by disruption infrastructure sharing will shape fibre leasing and
of traditional voice and messaging revenue streams renting dynamics in India.
because of digitalisation. While the exponential rise
in data consumption (wireless: 4026 PB during the To build a diversified and digital ecosystem, the
quarter April-June 2017 to 10418 PB in April-June fundamentals of conventional network and business
2018)01,04 has provided some relief, it has not been architecture need to be revised. Therefore, ICT,
enough to uplift the overall Average revenue per infrastructure providers (IP), Telecom Service
user (ARPU), which stands at USD1.25 (INR80.97) Providers (TSP), Internet Service Providers (ISP), and
in FY18 (USD1.79 or INR117.37 in FY17)05. The content providers will play an important role in paving
ongoing price war and lack of adequate monetisation the way for digitisation in a reliable and sustainable
of content delivery coupled with increasing costs fashion.
from bandwidth and speed upgrades have put the
telecom sector in a precarious situation. It will take Create a start-up ecosystem
the collective will and action from all stakeholders, The technology landscape in India has seen a rapid
private and public to reinvigorate the sector. Lack of transformation in recent years because of the strong
immediate action on this will risk the derailment of emergence of various start-ups. This has created
the vision of Digital India and the socio-economic a momentum for a plethora of new ideas fuelling
development that it promises. disruption, innovation and investments across
Telecom companies (telcos) need to think of new verticals. Riding on the pillars of future technologies
avenues for growth as legacy revenues are under like AI, IoT, robotics and analytics, the Indian start-up
pressure. This could mean expanding their existing ecosystem is shaping up in positive light.
solutions to newer markets while realigning their
business models to cater to emerging opportunities.
The following are the three themes that telcos need
to focus on: connect, create and innovate.
01. The Indian Telecom Services Performance Indicators April – June, 2018. FX Conversion Rate for FY18 - 05. The Indian Telecom Services Performance Indicators Quaterly reports for FY17 and FY18
64.46 06. http://www.worldometers.info/world-population/india-population/
02. https://www.investindia.gov.in/sector/telecom, Accessed on 25 September 2018 07. 5G a distant dream for India when backhaul takes a back-seat: Experts, The Economic Times, 11 August
03. COAI Annual Report, 2017-18 2017
04. The Indian Telecom Services Performance Indicators April – June, 2017. FX Conversion Rate for FY17 - 08. Why India must get fiberised to leapfrog to 5G, The Financial Express, 17 February 2018
64.46
03
However, to drive and nurture a strong Further, the survey also indicates IOT followed by
entrepreneurial culture, the government has AI and robotics are identified as the leading game
to address a series of roadblocks related to changers over the next three years globally.
administrative and economic areas for start-ups.
As India stands at the cusp of transforming into one
of the world’s fastest growing digital economies,
Create networks of the future these emerging technologies have started traversing
While the Indian telecom sector has come a long across businesses accelerating their growth journeys.
way and has experienced tremendous growth in Telecom, despite being central to this digital evolution,
the past decade, it is lagging on quality parameters has so far not been able to reap benefits from
like network throughput and 4G coverage. With this growth. Instead, we are seeing a sect of new
data surge and increasing use of IoT and M2M agile digital businesses emerge which are not only
applications, the telecom ecosystem will have to creating an intermediate layer between connectivity
boost its network capacity to offer high-speed data providers and the end users but also increasingly
access and minimum latency. Although 5G is likely to making customers agnostic of which network to
be the key enabler of the fourth industrial revolution choose.
and an integrated ecosystem across business-to- To outpace the digital disruption and ensure that they
business (B2B), business-to-consumer (B2C), and remain the epicentre of the growth, telcos will have
business-to-government (B2G), until it is launched, to innovate on two fronts i.e., redesign their business
the telcos will have to improve on their existing models beyond connectivity and enhance their
networks to enhance their performance. customer experience.
Software Defined Networks (SDN) and Network
Redesigning the business models
Function Virtualisation (NFV) are examples of cloud-
based technologies. These can replace complex With traditional revenue streams maturing,
network functions with customisable virtualised redesigning business models is the need of the
software. It is estimated that SDN and NFV could hour. Industry players are already commercialising
generate significant savings in overall operator consumer behaviour, trends and innovative
operating expenditure and will be the main drivers technologies to create new paths to outpace the
of adoption of these technologies in an otherwise competition. Telcos should leverage this gold mine of
financially constrained industry. data and move up the technology stack by providing
platforms and applications to create industry-specific
To unleash the full potential of Digital India, an
solutions using emerging technologies. This will
investment of USD17 billion is required over the
help telcos transition from just being communication
next two years. Significant investments are required
providers and become core to the enterprise and
over the next two years to unleash the full potential
consumer digital transformation.
of Digital India. However, this can only happen
when adequate Return on Investments (RoI) is The adoption of 5G will drive demand from
enabled through a facilitative policy and regulatory enterprises and allied industries such as e-commerce,
environment. healthcare and automotive. Though the potential
opportunities for collaboration are unlimited, telcos
Innovate beyond connectivity will have to develop vertical specialisations in these
industries to understand the enterprise solution
As per KPMG Technology Innovations Lab’s findings
requirements and collaborate with tech companies
through a web survey comprising of 15 countries
and innovators to provide a holistic solution.
and 15 countries and more than 750 technology
leaders, India is ranked third in the tech leadership Telcos will have to develop some of these capabilities
charts for countries showing most promise for in-house or acquire through partnership and
disruptive technology breakthrough that will have a collaboration with other ICT players.
global impact. It will take the collective will and action
from the entire ICT ecosystem along with adequate Enhancing customer experience
government support to unearth the true potential of
The rapid change in consumer demand, led by
the Indian digital economy. With connectivity and the
enhanced network connectivity and improved speeds
promise of 5G being the most critical enabler to the
has increased on-the-go consumer count. They are
vision of digital India, Telcos will have an important
becoming accustomed to accessing information,
role to play.
retail, financial and entertainment services across
04
devices. Consumers are demanding more from their Conclusion

network providers and are looking for personalised
service offerings. The existing high customer churn India is at the helm of a new revolution ‘Industry
indicates that telcos need to work on increasing 4.0’, as digital transformation makes inroads across
customer loyalty which includes the following: sectors altering the modus operandi for businesses.
The enhancement of features in affordable
• Telcos need to differentiate beyond networks and smartphones, constant connectivity and 5G’s
deploy disruptive technologies that will act as a potential will position the telecom sector uniquely in
catalyst to provide a better customer experience this transformation.
• Use advanced analytics to understand customer Being the key stakeholder with an obvious path to
preferences based on their digital behaviour full connectivity for the consumer makes telcos a
necessary part of any future consumer proposition
• Adopting an organisation-wide cultural change regardless of who owns the platform. The path
and build customer centricity across all functions. forward is leveraging this strength while navigating
the challenges in regulation, changing technology and
Challenges and way forward changing consumer dynamics.
The telecom sector’s current structure is weighing
on its growth. Moreover, its burgeoning debt, falling
revenue and constrained margins leave little room
for further investments. The government has set
the tone of a progressive policy framework with
the National Digital Communication Policy 2018.
The policy promotes the judicious use of Universal
Service Obligation Funds (USOF) and public private
partnership to promote connectivity through its
Bharat Net, Gram Net, Nagar Net and JanWifi
initiatives. However, monetisation models and
financial viability of these initiatives need to be
well defined to make the public-private partnership
successful.
Some of the potential areas, which could be looked
at with respect to promoting an investor-friendly
environment in the telecom sector are as follows:
• Spectrum management, its pricing and future
availability roadmap
• Redefine Adjusted Gross Revenue (AGR)
• Bring down levies such as Spectrum Usage
Charge (SUC) and Licence Fee (LF)
• Reduce the tax burden
• Lowering the cost of backhaul connectivity
• Development of the start-up ecosystem
• Data privacy
• Favourable device and component manufacturing
• Robust cyber and data security framework
• Bridging skill gap
• Public Private Partnership (PPP) models for
shared infrastructure
05
Telecom
sector - the
ground
covered so far
06
The convergence of information, ubiquitous Some of the other key initiatives undertaken by
connectivity and technology heralds a new India the government to support the growth of digital
which is marked by societal and entrepreneurial economy are:
transformation. The transition from trunk calls
• Right of Way (RoW)
to 5G, IoT and AI has been nothing less than a
metamorphosis of our economy. • Ease of installation of infrastructure
As per KPMG Technology Innovations Lab’s findings • Proliferation of broadband through public Wi-Fi
through a web survey conducted from November networks
through December, 201701 which comprised of 15
• Common duct policy
countries and more than 750 technology industry
leaders (CXOs, entrepreneurs, venture capitalists) • Next generation network
India is ranked third in the tech leadership charts • Electronic Development Fund (EDF)
for countries showing most promise for disruptive
technologies like AI, robotics and IoT breakthroughs • Centre of Excellence for IoT
that will have a global impact. • Introduction of policies to promote Foreign Direct
With a vision to make India a digital economy, the Investment (FDI)
government through its policies and regulatory • Amendment in unified license for active
interventions has provided a positive trajectory to the infrastructure sharing
Indian Information and Communications Technology
(ICT) sector through initiatives like Digital India • Favourable mergers and acquisition policy
program, formalisation of NDCP, Smart Cities and • Formulation of spectrum trading and sharing
BharatNet. norms.
Major milestones achieved through government’s initiatives02,03,04
Digital empowerment Innovation and

Digital infrastructure Make in India Governance
of citizens centre of excellence
• 114,552 Gram • Electronics • eTaal – significant • EDF with corpus • Safe and
Panchayats (GPs) manufacturing growth in of USD342 secure
connected through clusters e-governance million for cyberspace
optical fibre network transaction per start-ups
• 120 mobile • Robust cyber
under BharatNet day (86.8 million
manufacturing • Nano technology security policy,
transactions in 2018
• Enhanced outlay units set up in centres Information
till April)
of USD957 million last 3 years Technology
• Centre of
towards smart cities • 2.92 lakh common (IT) Act and
• 225 million Excellence for
service centres dynamic Indian
• 28 State data mobile IoT
Computer
centres handsets • BHIM App touched
• 3rd largest start Emergency
manufactured a record high of 913
• 800 services up ecosystem Response
in India in FY18 million transactions
being delivered on with 1000+ Team (ICERT)
of USD15.5 billion in
Government of India startups added
FY18 • Botnet cleaning
(GI) cloud initiative in 2017
and malware
(Meghraj) • USD51.7 billion value
• Seven centres centre
of digital payments
• 3,856 government of excellence
made in FY18
departments and in emerging
agencies integrated technologies
with Mobile seva
platform
• 203 e-hospitals
Source: MEITY and DOT Annual report 2017-18, https://www.thehindubusinessline.com/economy/budget/slick-rise-in-funds-for-smart-cities/article22624920.ece

https://economictimes.indiatimes.com/small-biz/startups/newsbuzz/bhim-upi-transactions-touch-rs-1-trillion-in-fy18/articleshow/63574195.cms, Accessed on June 2018, Average FX conversion rate during
2017-18 - USD1 = INR64.46
01. The Changing Landscape of Disruptive Technologies, KPMG in US, May 2018 03. Smart Cities still a work in progress, The Hindu Business Line, 01 Feb 2018
02. Annual Report 2017-18, MEITY 04. BHIM UPI transactions touch Rs 1 trillion in FY18 , Economic Times, 02 Apr 2018”
07
The Indian telecom sector’s subscriber base is Over the years, the telecom sector has become
growing at a Compound Annual Growth Rate (CAGR) a significant contributor to the country’s growth.
of 17.44 per cent05, reaching 1.1 billion during The sector contributed 6.5 per cent to total Gross
FY07-1806 and the sector’s revenue doubled from Domestic Product (GDP) in FY1808, generating direct
USD19.5 billion in FY06 to USD38.78 billion in FY1707. and indirect employment opportunities for over four
Numerous players in the market - TSPs, IP, regulatory million people and attracting FDI of USD6.2 billion in
bodies and the government have collaborated FY1809.
together and fostered the Indian telecom growth.
Interesting facts summing up India’s current digital drive
Total Total telecom Total internet Active social

population: subscribers: subscribers: media users:
1.4 billion 1.1 billion 512 million 250 million
M-wallet Mobile banking

E-commerce M-commerce transactions transaction
penetration: penetration: volume: 3.02 volume: 1.87
26% 20% billion (2017-18) billion (2017-18)
Number of 114,552 GPs

3.14 billion
digital buyers: connected via
transactions
224 million high-speed
recorded in
(2018) broadband
FY18 on eTaal
connectivity
Sources:
-- www.worldometers.info;
-- The Indian Telecom Services Performance Indicators, TRAI, January-March 2018, Accessed on 01 October
2018
-- Statista; Digital in 2018, Hootsuite, Accessed on 01 October 2018
-- Payment System Indicators, Reserve Bank of India, September 2018
-- Annual Report 2017-18, MeiTY, Accessed on 01 October 2018. The sector contributed 6.5 per cent to
total GDP in FY 2018, generating direct
and indirect employment opportunities
for over four million people and attracting
FDI of USD6.2 billion in FY18.
05. KPMG India’s Research

06. The Indian Telecom Services Performance Indicators April – June, 2018. FX Conversion Rate for FY18 -
64.46
07. COAI Annual Report, 2017-18
08. https://www.investindia.gov.in/sector/telecom, Accessed on 25 September 2018
09. FDI in telecom sector surges to $6.2 billion in 2017-18: Manoj Sinha, The Economic Times, 25
September 2018
08
Average Average Ecommerce

Internet Mobile’s Unique
fixed internet mobile annual ARPU:
penetration share of mobile user
speed in internet speed consumer goods
by country web traffic penetration
Mbps in Mbps (in USD)
Worldwide
53% 40.7 21.3 52% 68% 833
average
Highest 99% 161.2 54.2 83% 84% 2,062
India 39.32% 19.7 9.1 79% 63% 113
Sources: Digital in 2018: Hootsuite report 2018; TRAI- performance indicator report June 2018
India Mobile connectivity index
Consumer Content and

Overall index Infrastructure Affordability
readiness services
53.7 41.1 77.3
50.3 51.8
Sources: GSMA’s mobile connectivity index accessed on 16 October 2018
The journey of the industry from being a Today, the business is no longer only dependent
communication provider to becoming an important on technology. Sure, that remains a driver; but only
economic enabler has passed significant milestones. one of the many including asset-light business
The telecom sector has undergone radical models and rapidly changing hyperlocal consumer
transformations in the past few years and it stands preferences. Emerging technologies like 5G, IoT,
as one of the most disruptive and customer focused M2M and cloud technologies have created a new
industries today. India adopted the third generation paradigm to develop sophisticated, sustainable and
mobile network (3G) in 2010 which introduced India scalable infrastructures to pave the way
to fast data speed and played a significant role in for ‘Digitalisation’. Hence, the ICT industry will be
the path towards the transformation of sector from at the forefront of the newly emerging environment
voice-centric to data-centric05.This received a further and help give a global competitive edge to the Indian
stimulus with the launch of the fourth generation economy. And that’s the threshold from which the
of mobile networks (4G) and Voice over Long Term next quantum leap – or the roll-out of 5G services –
Evolution (VoLTE) services in the year 201505.Today, will occur.
most TSPs in the country boast of providing 4G
services to their subscribers and the industry is
seeing a steady rise in the number of 4G customers.
In addition to VoLTE, the industry has also rolled
out the optical fibre network in excess of 2.8 million
kms10 to provide reliable, secure, reasonable and high
Quality of Service (QoS) to all citizens.

10. Status of BharatNet, Bharat Broadband Network Limited, Accessed on 10 October 2018
09
Growth of telecom industry
<1 4.7 10
Riding on technology wave, video
OTT revenues to grow at a CAGR
4G launch of 45% during 2018-2023
12% 19% <50%
IPTV Deployment of IoT, AI, VR/AR

2016:
across businesses
Entry of a
10% new player 73% 98%
4K HD trigger Significant infrastructure upgrade
videos high data planned through NDCP 2018
usage; 60% 5G launch
spectrum
Video 2% unsold in 50% 83% Industry
auctions
conference 4.0
Cloud 2017: Data share Rural

computing in non-voice 2.0
revenue reach 84%
compared to 23%
in 2013 AI, AR,
1,287 Big Data,
1,263 IoT
1,183 1,196 1,234
1,170
1,034
970
905 2018: Consolidation
amongst existing
players
580 663
473 488 520
401
283 322
233
2013-14 2014-15 2015-16 2016-17 2017-18E 2018-19F 2019-20F 2020-21F 2021-22F
Total data subscribers Total subscribers
Data usage per

% 4G data % 4G data Rural internet
subscriber per
subscribers revenue penetration
month (GB)
Sources: Crisil Research, Accessed Date, 08 October 2018
10
Despite the rapid subscriber base growth, the Indian The road ahead
telecom growth story is in distress. In particular, in
As disruptive technologies develop and consumer
2017, telecom companies (telcos) faced financial
expectations evolve, most industries in India are
woes with a price war, which resulted in a sharp
facing a triad of change relating to technology,
decline in ARPU. The decline was so sharp that it
competition and consumers, bringing the telecom
reached USD1.25 in 2017-1813 and USD1.13 in
industry at the forefront of this tectonic change.
April-June 2018, the lowest level since 2010.
With economic activities relying on information,
Nonetheless, the industry is shifting gears to ride
communication and technology more than ever, the
over the issue by varying its pricing and bundling
opportunity for the sector is vast.
strategy, consolidating synergies and expanding its
footprint in the ICT ecosystem through acquisition. The convergence between telecom operators, ICT
However, these initiatives are yet to show results. infrastructure providers and content providers is
The government will play a critical role in re- set to generate prodigious opportunities to connect,
energising and funding the sector to shape India’s create and innovate.
digital landscape.
Connect, create and innovate
CONNECT the unconnected

• Total subscriber base is expected to reach 1.28 billion in FY22
• By 2022, 10 million public Wi-Fi hotspots will be deployed
CONNECT
• Aims to provide 1 Gbps connectivity to all gram panchayats by
2020 and 10 Gbps by 2022.
CREATE an ecosystem for digital enablement

• Telecom sector to create 11-12 million job opportunities in the
services sector
• Attract USD100 billion of investment to the telecom sector
CREATE by 2022
• Telecom industry to contribute an additional 3.5 per cent to
the GDP from 6.5 per cent in FY18
• 5,000+ tech start-ups including 300+ ICT start-ups in FY17,
estimated to reach 10,500 by 2020.
INNOVATE beyond connectivity

INNOVATE • Potential USD1 trillion of revenues for digitally enabled businesses by
2022 and USD1.8 trillion by 2025
• Cumulative USD1 trillion 5G economic impact in India by 2035
• 2.7 billion IoT units and a market size of USD15 billion by FY20.
Sources:
-- Readying India for a USD 1 trillion opportunity through Digital, Nasscom, December 2017
-- 5G to offer $27 bn biz opportunity for India by 2026, The Economic Times, 22 May 2018 The trinity of increasing mobile penetration,
-- Panel on 5G deployment in India predicts ‘$1 trillion impact on economy’, Hindustan Times, 23 August
2018
1.2 billion aadhar cards11 and over 312
-- INDIAN IOT MARKET SET TO GROW UPTO USD 15 BILLION BY 2020, Nasscom, 05 October 2016
-- Digital India: Telecom skills group sees surge in job opportunities, The Economic Times, 25 November 2016
million Jan Dhan accounts12 enable real
-- Indian Start-up Ecosystem-Traversing the maturity cycle, Edition 2017, Nasscom, Accessed Date 08 time direct benefit transfers and provide
October 2018
-- Pradhan Mantri Digital Saksharta Abhiyan (Gramin), Pradhan Mantri Yojana, Accessed Date, 08 October digital delivery of services like education,
2018
-- 5 Crore Rural Indians to Get Wi-Fi, Thanks to Union Budget Scheme, Daily Hunt, 02 February 2018 healthcare etc.
-- Expect India mobile sector to create $217 bn value by 2020:Min, Business Standard, 27 September 2017
-- National Digital Communications policy 2018, Department of Telecommunications, 01 May 2018.
11. State/UT wise Aadhaar Saturation, 30 Sep 2018

12. Press Information Bureau ,Government of India, Ministry of Finance, March 2018
13. The Indian Telecom Services Performance Indicators Quaterly reports for FY17 and FY18
11
Connect the
unconnected
12
Today the Indian telecom industry is at a crossroad, and the changing consumer requirements of urban
where it needs to meet the basic connectivity and semi-urban India which demands next generation
requirement of rural India including 4G proliferation solutions through emerging technologies.
State-wise urban-rural teledensity - The stark urban-rural divide
Rural teledensity All India - June 2018 89.72

313.9
Urban teledensity Urban teledensity 158.16
264.8
Rural teledensity 57.99
177.0
180.4
174.0
176.5
167.3
145.2
158.4
153.9
165.3
133.3
162.4
156.9
141.1
147.5
140.5
134.8
117.7
87.8
80.7
76.7
75.9
74.3
58.8
66.3
63.6
60.7
56.0
59.1
64.4
43.2
49.4
48.4
44.6
43.6
J&K
Bihar
Gujarat
North East
Himachal
Assam
Pradesh
Pradesh
Rajasthan
Uttar Pradesh
West Bengal
Haryana
Karnataka
Kerala
Madhya
Maharashtra
Orissa
Tamil Nadu
Andhra
Punjab
Source: The Indian Telecom Services Performance Indicators, January-March 2018, TRAI
The Indian telecom sector is going through an invigorating

journey and it is exciting to be a part of it. As the
Indian economy is leapfrogging towards digital growth,
the telecom sector will play a critical role in not only While India’s overall teledensity stood at
enhancing the penetration of emerging technologies like 89.72 per cent, rural teledensity remained
IOT, AI, M2M through connectivity but also provide a low at 57.99 per cent in June 2018. Internet
platform to create solutions for consumers, enterprises penetration in rural India has been at just about
and government to deploy these technologies to foster 19.48 per cent. As around 67 per cent of the
growth in different sectors. However, to unlock the true country’s population lives in rural areas, the
potential, it would be critical that all stakeholders in the digital divide between urban and rural India is
sector, government and industry, work cohesively in significant.
addressing some of the pertinent challenges to ensure
that the best of the services can be provided to the Indian
telecom consumers at par with their global counterparts.
We assure the government of full support and look
forward to be a path of the growth story.
Balesh Sharma
CEO Vodafone Idea Limited
13
Vectoring on rural India

While India’s overall teledensity stood at 89.72 per On its part, the government has also been making
cent, rural teledensity remained low at 57.99 per cent facilitative investments. Its digital literacy drive is
in June 201801. Internet penetration in rural India has expected to reach 60 million rural households with an
been at just about 19.48 per cent01. As more than investment of around USD350 million by FY1903.
66 per cent of the country’s population lives in rural
The phase 1 of the BharatNet project resulted in
areas, the digital divide between urban and rural02
1.1 lakh villages being connected and service ready04.
India is significant.
In the recent fiscal budget, the government proposed
Not surprisingly, the focus of telcos has been shifting an investment of about USD1.5 billion in FY1905 to
away from urban circles, which has hit or is hitting develop additional telecom infrastructure.
saturation levels. The rural sector is coveted despite
Additionally, Public Private Partnership (PPP) models
infrastructure hurdles such as lower bandwidth and
are also evolving such as Google’s partnership with
coverage, high upfront investment cost, low pricing
RailTel as a backhaul provider for enabling public
power, and high customer switching among service
Wi-Fi hotspots at 400 railway stations. Eventually,
providers. In the hinterland, aggressive expansion
these services will cover 6,000 railway stations06.
by operators and the launch of 4G (VoLTE) services
Also, BSNL is partnering with Facebook to set-up
has improved penetration. Similarly, the availability
community public Wi-Fi hotspots in rural India.
of local-language apps and devices have increased
smartphone adoption, especially in rural areas. However, significant efforts from all stakeholders
are required in broadband expansion and fiberisation
which will be critical to eliminate the digital divide.
Fixed and mobile broadband subscriptions per 100 inhabitants, in 2017
Fixed-Broadband Mobile-Broadband
43.8 153.8
41.6 148.2
39.3
132.9
33.9
30.9 112.8
Average Average
26.9 of 27.5 90.2 88.1 of 100.1
25.8 87.5 83.6
78.1
17.8
13.7
25.8
1.3
U.K.
U.S.
U.S.
U.K.
Korea (Rep)
Korea (Rep)
France
Singapore
Singapore
France
Brazil
Brazil
China
Argentina
India
Argentina
China
India
Finland
Finland
Source:The State of Broadband: Broadband catalyzing sustainable development, September 2018
The government has also been

making facilitative investments.
01. The Indian Telecom Services Performance Indicators April – June, 2018. FX Conversion Rate for FY18 - BharatNet and NDCP are aimed to
64.46
provide the required momentum
02. http://www.worldometers.info/world-population/india-population/
03. Pradhan Mantri Digital Saksharta Abhiyan (Gramin), Pradhan Mantri Yojana, Accessed Date, 08 October to the sector in terms of
2018
infrastructure and investment push
04. “BharatNet Phase 1: Target Achieved Through Meticulous Planning and Focused Implementation at
Ground Level; Press Information Bureau ,Government of India, Ministry of Communications, Accessed however speedy implementation
in June 2018”
05. 10,000 crore to boost telecom infrastructure , The Hindu, 01 Feb 2018
of these initiatives would be key.
06. 6000 railway stations will be Wi-Fi-enabled in next 6 months, Economic Times, 28 August 2018
14
India’s low broadband penetration compared to global the 50 Mbps per citizen target, the government
peers signifies a huge potential for the industry. The has to provide five times the spectrum and the
NDCP released in September 2018, which aims to telecom network has to grow from the present two
provide fixed-line broadband access to 50 per cent million Base Transceiver Stations (BTS) deployed
of households by 2020 and universal broadband to 10 million. This will require focused and timely
coverage of 50 Mbps for every citizen07, should also provisioning of resources. It will be important
boost broadband expansion. Moreover, the BharatNet that the government intervenes to provide the
project (phase 2) under the Digital India initiative aims requisite resources in terms of spectrum, right
to connect additional 150,000 Gram Panchayats (GPs) of way permissions, financial incentives and an
through high-speed optical fibres by end of 201808. implementation monitoring system to achieve the
targets defined in NDCP 2018.
Currently, the average speed of Indian operators
is below 10 Mbps09 and if we have to achieve
Status of BharatNet project
Status as on Status as on Status as on

Sr.
Description of work
No.
2 September 2018 3 September 2017 21 August 2016
1. Optical Fibre Communication 2,79,346 kms 2,43,590 kms

(OFC) pipe laid (1,20,713 Gram (1,08,275 Gram 1,55,398 kms
Panchayats) Panchayats)
2. Optical fibre laid 2,87,878 kms 2,25,475 kms
(1,19,036 Gram (100,768 Gram 1,31,494 kms
Panchayats) Panchayats)
3. Tenders finalised 3,291 blocks / 3,326 blocks / 2,541 blocks /
1,22,828 Gram 1,24,291 Gram 95,242 Gram
Panchayats Panchayats Panchayats
4. Work started* 3,281 blocks / 3,242 blocks / 2,430 blocks /
1,22,305 Gram 1,21,328 Gram 87,176 Gram
5. Current weekly performance of
386 kms 971 kms 1,089 kms
optical fibre laying
6. Current weekly performance of
194 kms 615 kms 830 kms
OFC pipe laying
7. Optical fibre cable delivered on site 3,41,568 kms 2,86,944 kms 1,77,998 kms
8. Service-ready Gram Panchayats 1,14,552 Gram 32,715 Gram 8,472 Gram
Source: Status of BharatNet, Bharat Broadband Network Limited, Accessed on 11 September 2018
New asset-light operating models of fibre leasing and renting may be explored in view of declining profitability
and stretched balance sheets. While some of the operators are currently focusing on expanding fibre home
reach, policies and schemes encouraging active infrastructure sharing will shape up fibre leasing and renting
dynamics in India.
07. “National Digital Communication Policy, 2018 - Draft For Consultation, Department of Telecommunication 09. State of Mobile Networks: India (April 2018), OpenSignal, Accessed on 18 October 2018
– Ministry of Communication, Government of India, 1 May 2018”
15
Urban India and the surge of data usage

Data consumption in India has grown exponentially subscriber per month to 4.7 GB01 as of June 2018
over the past few years due to increased smartphone (up from 420 MB in FY16)10. With continued operator
penetration and improved coverage of high- investments in 4G roll-outs and aggressive operator
speed data network coupled with low data tariffs. data plans, there is an inherent shift in consumer
September 2016 was a watershed moment when data usage patterns. Incumbents followed suit and
the arrival of a new greenfield operator resulted in a introduced aggressive 4G data plans, leading to a
steep drop in data prices and subsequently resulted fundamental shift in the way consumers use data.
in an increase in average wireless data usage per
Falling data tariffs have led to rapid data uptake10
4,708 ~7,000 MB
Data usage/
subscriber/
1,360
month (MB)
Increase in data
420 revenue has been
offset by fall in
310 data realisation
256
229
68.5
Average
realisation 12.4 Paise/MB
(Paise/MB) 16.4
FY15 FY16 FY17 FY18 FY20
Source: Crisil Research, Accessed Date, 08 October 2018
Increased competition has led to commoditisation telecom operators - average voice revenue per user
of voice revenue and emergence of data services as declined about 30 per cent in FY18 and is expected
the primary driver of potential revenue growth for to further decline by 15-20 per cent in FY1911.
With continued operator investments

in 4G rollouts and aggressive operator
data plans, there is an inherent shift in
consumer data usage patterns
01. The Indian Telecom Services Performance Indicators April – June, 2018. FX Conversion
Rate for FY18 - 64.46
10. Crisil Research, Accessed Date, 08 October 2018
11. CRISIL Research, 01 June 2018
16
Demand for mobility, app-based and OTT services to spawn bundled services
opportunities
Personalised 5+ inch screens in the form of approximately USD40 for a 4G smartphone13 has also
smartphones and tablets have emerged as the contributed to increased use of mobile devices with
preferred entertainment mode. Around 95 per cent 4G capable device penetration reaching 22 per cent
of households12 in India own just one TV making at a pan-India level in 2017 from 12 per cent in 201614.
smartphones the second screen for users. The Consequently, mobile as a medium has become the
low price of an entry-level 4G enabled device — most popular and adopted device for consuming
starting at around USD21 for 4G feature phones and online content.
Rise of digital media proliferation to drive future adoption
72.6% 27.4%
30.8%
2018
56.9%
Desktop/laptop Mobile
Share of average devices
time spent
2013
Share of time spent on digital
mediums- 2017
17.9% 67.8%
Digital TV
2017 2023
390 mn Smartphone subscription 975 mn
~100 mn VoLTE connections 800 mn
Average monthly data usage per

5.7 GB 13.7 GB
smartphone
Source: Mobile data traffic in India to grow 5 times by 2023: Ericsson report, The Economic Times, 12 June 2018
With expected exponential rise in

data usage, telcos need to find new
ways of monetising data.
12. India Trends 2018: Trends shaping digital India, KPMG, May 2018
13. CRISIL Research, 20 July 2018
14. India Mobile Broadband Index 2018, Nokia, Accessed Date, 20 Sep 2018
17
Video streaming has the biggest share in media consumption
8-10% 4-8% Active users (in mn) of OTT platforms

Social Others
Media YouTube 225
Operators’ OTT 50-100
Hotstar 75
15-18%
Browsing Voot 30
Amazon 13
Netflix 5
65-75% Sony LIV 5

Video streaming
TVF Play 4
Online video consumption grew 5X in 2017

ALT Balaji 2
2017
2023
Online video audience (millions) Video OTT revenues (INR billion)
550
%
– 20
GR 6 0%
C A
G R–
CA
%
– 50
225 AGR
C 44.9
93.2
4.3
17.2
FY18E FY23P FY23P FY23P
Advertisement Subscription
Sources:
-- India Mobile Broadband Index 2018, Nokia, Accessed Date, 20 Sep 2018
-- Media ecosystems: The walls fall down, KPMG, September 2018
Mobile data usage in India rose to the levels
of a few developed markets in 2017 and is
expected to surge 5x by 2023.
Video streaming contributed 65-75 per cent
to total mobile data traffic in 2017 in India,
driven by 4G uptake, the emergence of OTT
players and availability of content in Hindi and
regional languages.
18
With this shift to a data-centric revenue driver, audience base through a distribution medium
operators across the globe are exploring further data which is increasingly becoming digital
monetisation opportunities. Given the potential of the
• Convergence and digital distribution mediums
content market, operators are investing in content
also open up monetisation avenues for content
ecosystems (creation, curation and distribution)
creators – which have traditionally been led
to provide further data value-adds. Operators like
through advertisements. Convergence opens
Telefonica, BT, AT&T are investing in developing
up a monetisation outlet, especially for a
content and evolving into digital media franchises
subscription-based revenue
with a sharp focus on bundled offerings including
bundled TV, wireline and wireless phone services. • For the telecom operators, content becomes
Operators in India have also pursued different more important and has the potential to act
strategies with respect to defining and developing as a key differentiator eventually helping with
their content portfolios (from sourcing original customer stickiness on their network
content to being an aggregator of video and content
• Telcos can also look to monetise the projected
platforms). The trend of investing in content can be
surge in data traffic (by 2021, 82 per cent of all IP
expected to continue as operators strive to provide
traffic is expected to be video)15 at scale.
differentiated experiences to the end consumer with
respect to content, media and video consumption. Capitalising on this opportunity, telcos are changing
their business models and are coming up with
The boundaries between Technology, Media and
lucrative bundled offers and free subscriptions to
Telecommunications (TMT) sector are increasingly
certain OTT apps to drive ARPU. Telcos are evolving
blurring across the globe with connectivity being the
from pure voice providers to ‘triple-play’ or ‘quad-
catalyst for this disruption and driving convergence of
play’ players integrating their voice, data, and content
business models. As this convergence starts to play
offerings.
out across the globe, India is not likely to remain far
behind. • Airtel launched Airtel Home, a digital quad-play
platform bundling home broadband, fixed line,
Benefits and opportunities abound for the
post-paid mobile and digital TV in June 2018
stakeholders of the TMT ecosystem as a result of the
convergence theme. • Jio is betting on bundled OTT and Internet
• The convergence of traditional content-led Protocol TV services along with voice and data.
organisations with telcos and technology led
platforms results in content reaching a wider
15. Fast Data Use Cases for Telecommunications, Voltdb, September 2017, Accessed on 01 October, 2018
19
Emergence of triple-play and quad-play services
Video/
content
Data Voice
Telcos Dominated by
OTT players
Apps and streaming

content directly to
Either building consumers through Internet
their own platform
or partnering with
OTT players
Impacting telcos’ WhatsApp, with
basic communication an active monthly
service revenues i.e. subscriber base
messaging and voice of over 200
million in India,
has virtually
stopped the use
Evolution of telcos from being purely voice of SMS for data
providers to ‘triple-play’ or ‘quad-play’ players subscribers
Telcos globally, particularly in Europe, have • China Telecom has a 59 per cent triple-play
leveraged the evolution of triple-play and quad- penetration rate which has improved wireline
play models either against rising competition or to broadband churn rate to 1.1 per cent.18
attract new customers.
High speeds, enhanced network capability, and
• About 15 per cent of Belgian operator Telenet’s strong content competency are necessary to
customers subscribed to its quad-play services succeed in convergent strategies. Globally, telcos
in Q1 2018 compared to about 9 per cent in Q1 have opted to build, acquire or partner with
2017.16 different players in the ecosystem to enhance their
service offerings.
Bundled offers increase average revenue in addition
to reducing churn.
• Belgium-based operator Proximus’ multi-play Data accounts for only 35 per cent of
subscriptions grew 7.2 per cent year on year. the revenues of Indian telcos despite
Its ARPU was EUR110-115 for multi-play offers the spike in volume. That’s in sharp
versus EUR30-35 for single offers in Q2 2018. contrast to chinese players whose data
The full year annualised churn rate for multiplay revenue accounts for 60-65 per cent of
was 2.9 per cent compared to 19.4 per cent for their total wireless revenue19.
single play.17
16. Telenet scores with quad-play bundles, Broadband TV News, April 26, 2018
17. Proximus Company Presentations, Accessed Date: 28 September 2018
18. 2018 Interim Results, China Telecom Corporation Limited, 20 August 2018
19. CRISIL Research, 01 June 2018
20
Control over content is driven by collaborations and investment models
Content
Partnerships Strategic investments
• Airtel, Vodafone Idea • Reliance Jio aggregating content and investing in

aggregating content original and exclusive content
• Airtel partnered with • Acquired digital rights for Winter Olympics 2018,
Hotstar for content EFL Cup and T20 cricket series
comprising live sports, • Acquired 5 per cent stake in Eros International
movies and TV shows and 25 per cent stake in Balaji Telefilms20
• Airtel partnered with Netflix. • Announced merger of its music app with Saavn.
Multi-play strategies in India are still in their infancy. Telcos face a number of challenges related to
infrastructure and digital literacy in rural areas, and most importantly, content including the availability of
regional language content. However, monetisation opportunities have encouraged some players to take
initiatives on the infrastructure and content fronts to strengthen their position as multi-play providers.
20. Reliance Industries to buy 5% stake in Eros for over Rs 340 crore, Times News Network, 21 February 2018
21
Create an
ecosystem
for digital
enablement
22
As the digital revolution continues to accelerate and robotics move firmly into the mainstream and
expand at an astonishing pace, business leaders upturn businesses like media and entertainment,
are grappling with emerging technologies, fuelling transportation, healthcare, security and retail. This
simultaneous disruptions across all aspects of the places the ICT sector at the heart of this revolution,
enterprise. The transition from an industrial economy with telecom being the essential lifeline.
that favoured mass production and scale to a digital
It is evident from a recent KPMG survey that
economy that favours information, is challenging the
companies which are able to deploy some of these
existing ecosystems. The fourth industrial revolution
new edge technologies are the ones driving business
is quickly unfolding as the evolution of AI, IoT and
transformation.
The road to growth: Disruptive business models
List of several companies named by tech industry leaders as companies they believe are most likely to
disrupt their business.
12% 11% 10% 9% 9%

Alibaba Facebook Airbnb Amazon Google
Source: KPMG Technology Innovation Findings, The Changing Landscape of Disruptive Technologies, KPMG US, 2018. The figures are based on responses provided by global industry leaders across 15 countries
The survey also indicated that over the next three

years, IoT is identified as the leading game changer
and e-commerce as the biggest disrupter globally.
17% 13% 8%
IoT AI Robotics
Source: KPMG Technology Innovation Findings, The Changing Landscape of Disruptive Technologies,
KPMG US, 2018
23
The road to growth: Disruptive business models

Based on KPMG Technology Innovations Lab’s findings through a global web survey of more than 750
technology industry leaders (CXOs, entrepreneurs, venture capitalists), e-commerce is seen as the top
disruptor in the next three years.
26% 19% 14% 11%

E-Commerce Social Autonomous Entertainment Source: KPMG Technology Innovation
platforms networking transportation platforms Findings, The Changing Landscape
of Disruptive Technologies, KPMG
platforms platforms US, 2018. The figures are based on
responses provided by global industry
leaders across 15 countries.
E-commerce platforms are transforming at the on people’s life, behaviour and choices. Social
speed of light, from fast deliveries to highly network platforms also play an important role
efficient logistics and supply chain operations along in the distribution of innovative technologies.
with new mobile payment services and digital Disruption resulting from transportation as a
assistants. This top ranking is consistent with the service and self-driving vehicles is reflected in the
tech industry leaders’ responses in identifying ranking of autonomous transportation platforms.
Alibaba and Amazon as top companies to watch as Entertainment platforms ranked fourth as the
disruptors of their business. shake-ups in traditional entertainment companies
are expected to continue.
Social networking platforms ranked second. These
platforms are known to have a strong influence
Top disruptive business models by country to drive growth in future

Even though e-commerce would be a top disruptor globally, social networking platforms would be the top
disruptor for India.
China India Japan U.K. U.S.
Autonomous To reap the true benefits

transportation of technology for
platforms 18% 12% 20% 15% 15% the socio- economic
development of the
country, it is important
that all stakeholders come
together and contribute
E-commerce
platforms
29% 17% 30% 26% 24% towards providing
an environment that
will foster innovation,
entrepreneurship and
Entertainment investments.
16% 9% 10% 19% 12%
platforms
Social
networking 12% 20% 17% 19% 23%
platforms
Source: KPMG Technology Innovation Findings, The Changing Landscape of Disruptive Technologies, KPMG
US, 2018. The figures are based on responses provided by global industry leaders across 15 countries.
24
However, for India to emulate similar success in

these businesses as its global counter parts, there
is a lot that needs to be done. As per CISCO’s
Digital readiness research released in May 2018,
India’s score of digital readiness is 10.54, a little
lower than the global average of 11.96, but with
a vast difference with the highest score of 20.101,
achieved by the U.S. The government is cognizant
of the significant efforts required to make a digital
India and NDCP 2018 is a progressive step towards
the digital empowerment of India. NDCP 2018 has
also outlined the following strategies to strengthen
India’s digital footprint and coverage with the aim to
achieve the following objectives by 202202:
1. Provisioning of broadband for all

2. Creating four million additional jobs in the
Digital Communications sector
3. Enhancing the contribution of the Digital
Communications sector to 8 per cent of India’s
GDP from ~ 6 per cent in 2017
4. Propelling India to the Top 50 Nations in
the ICT Development Index of International
Telecommunications Union (ITU) from 134 in
2017
5. Enhancing India’s contribution to Global Value
Chains
6. Ensuring Digital Sovereignty.
To reap the true benefits of technology for the

socio-economic development of the country, it
is important that all stakeholders come together
and contribute towards providing an environment
that will foster innovation, entrepreneurship and
investments. It is believed that the two most
important focus areas would be:
• Creation of a conducive environment for

innovators and entrepreneurs to thrive
• Creating networks for the future, to support
the functioning and adoption of the new edge
technologies.
01. “Country Digital Readiness: Research to Determine a Country’s Digital Readiness and Key Interventions,
Cisco, May 2018 “
02. National Digital Communication Policy, 2018
25
Start-ups adding significant value across industries

India’s start-up ecosystem has grown at a rapid
pace (1,000 tech start-ups added in 2017)03 and have
played a big role in the growth of the Indian economy.
Backed by improved connectivity and internet
penetration, start-ups are building solutions across
industries such as healthcare, banking, insurance,
travel, agriculture and education.
India Start-up landscape
1 2 3 4 5
3rd
largest startup
Number of tech
startups (2017) 40%
startups in the
+190
accelerators
+500
active
ecosystem 5,200 B2B segment and incubators investors
6 7 8
28% 31% 13%
Tier II and
USD 13.7 bil ion YoY growth in
top verticals
Tier III cities
invested in gaining
2017 (2017) Health- Fintech E-commerce
tech momentum
Sources: -- The YourStory 2017 Startup Funding Report – $13.7 billion invested across 820 deals, YourStory, 23
-- Over 1,000 tech start-ups added in 2017, says Nasscom, The Indian Express, 2 Nov 2017 December 2017
-- Indian start-up ecosystem- Traversing the maturity cycle, Edition 2017, NASSCOM, Accessed Date, 21 -- Business incubators leading growth of startups in India’s tier II/III cities: NASSCOM report, The Economic
September 2018 Times, 05 Dec 2017
Government backing has come in the form of the and grow. For innovation to thrive, a multi-pronged
Start-up India programme, setting up an investment approach has to be taken i.e. funding support,
fund of USD1.38 billion04 to support development infrastructure support, tax and surcharge relief,
and growth of innovation-driven enterprises, tax regulatory and compliance support and enterprise
incentives, patent right reforms, single-window level adoption.
clearances and easing of restrictions on foreign
Nonetheless, the start-up landscape shows
venture capitalists.
tremendous potential in India and even the most
Incubators/accelerators play an important role conservative sectors such as Banking, Financial
by providing mentorship, nurturing ideas and services and Insurance (BFSI) are embracing
extending technical support and providing access innovation and collaborating with start-ups.
to funding. To encourage innovation, Niti Aayog Technologies such as AI, Blockchain, Augmented
as part of its Atal Innovation Mission (AIM) will Reality (AR)/Virtual Reality (VR), robotics and
provide USD1.49 million to 100 new incubators and open Application Programming Interface (APIs)
USD30,000 to 500 tinkering labs in schools05. will bring profound changes in the way business
strategies would be defined. The future will see the
However, despite the positive economic growth
emergence of frameworks for concurrent adoption
and government policies, India faces an uphill
of these technologies and play a very crucial role in
task to become a mature start-up community –
building a vibrant digital economy.
mainly owing to skill-gap, lack of robust regulatory
framework around data, compliance and Intellectual A conducive start-up ecosystem could accelerate
Property Rights (IPR), lower connectivity in rural the adoption of technologies and help create
areas and limited awareness in tier III cities that innovative models to monetise ICT opportunities
may contribute immensely to their ability to scale emerging across industries.
03. Over 1,000 tech start-ups added in 2017, says Nasscom, The Indian Express, 2 Nov 2017
04. Start-up India Scheme, Department of Industrial Policy and Promotion, Accessed on 23 July 2018
05. Niti Aayog to fund tinkering labs in schools to boost scientific temper, Livemint, 30 May 2016
26
The transition from an industrial Start-ups have played a major

economy that favoured mass role in the growth of the Indian
production and scale, to a digital economy across industries such
economy that favours information, as healthcare, banking, insurance,
is challenging the existing travel, agriculture, and education.
ecosystems. The fourth industrial Further efforts in areas such as skill
revolution is quickly unfolding development, a robust regulatory
as the evolution of AI, IoT and framework and greater connectivity
robotics move firmly into the would contribute immensely in
mainstream. their ability to scale and grow.
27
Networks for
the future
28
With the emergence of disruptive technologies, network upgrades will be key to survival. While 5G will be
a game changer, the telcos will have to improve on their existing networks to enhance their performance.
Ubiquitous connectivity, faster data speed, smarter devices and increased data traffic have changed the
dynamics of telecom network infrastructure requirement.
Factors influencing investment in telecom infrastrucuture
Future corporate Digital industrial Proliferation of Need for Advanced

networks ecosystems OTT services connected devices analytics
Provide high-speed Participate and Support customer Improve latency of Digitise business
and high-reliability collaborate in demand for rich 4G LTE, leading to models of telecom
networks to improve bringing multiple content such as 4K, increased efficiency and allied industries
productivity, reduce under one digital 8K, virtual reality
costs and support umbrella (e.g. for (VR), augmented Support massive Segment customer
enterprise digital smart city) reality (AR) and machine-type and provide
transformation 360-degree videos communication customised
solutions
Telco expectation
Source: – KPMG in India’s analysis in 2018
29
Comparison of India vs peers on quality of service (QoS) parameters
India’s 4G download speed compared to global peers…
SINGAPORE U.K. U.S. INDIA
46.5 22.1 18 9.1

...even lags behind in latency
SINGAPORE
INDIA
U.K.
U.S.
30.2 ms 43.8 ms 59.2 ms 72.9 ms
India’s 4G coverage lowest compared to global counterparts
SINGAPORE
NDIA
U.K.
U.S.
86% 79% 91% 68%
Source: State of the Mobile Network – India: April 2018; US: July 2018; UK: April 2018; Singapore: May 2018, OpenSignal. Note: speed, latency and 4G coverage are average of maximum and minimum
A few critical aspects for telcos to facilitate a swift

move towards achieving latency requirements having
a bearing on QoS are:
• Infrastructure upgrade including effective
placement of cell sites for maximum coverage to
demand-heavy areas. Sites to be connected by
Optical Fibre Communication (OFC) or ‘Fibre to
the Tower’ approach
• Confluence of networks, Wi-Fi and Bluetooth for
faster connectivity
• Transformation of network architecture by
reinventing IT platforms
• Adoption of Artificial Intellgence and Machine
Leaning based technologies to ensure
smooth functioning of existing networks and
new roll-outs.
30
Pervasive connectivity
On the network front, Wi-Fi is emerging as an omni-present free-of-cost alternative providing fast access
to data.
Wi-Fi, an enabler to facilitate omni-present network
Issues High-speed indoor Capacity for congested

Connectivity gaps
addressed coverage networks
Wi-Fi hotspots
Wi-Fi spectrum sharing between operators leads to high traffic load, resulting in lower
Challenges
speed and connectivity
Potential Release of relevant unlicensed spectrum and other policy measures to support Wi-Fi
resolutions expansion
Establishing Self-Organising Networks (SONs) that use AI and ML based technology to

help telcos monitor and control traffic
Globally, data offloading through Wi-Fi is expected to reach 63% by 2021
Source: Global Mobile Data Traffic Forecast, 2016–2021 Q&A, Cisco Visual Networking Index, 31 July 2018
In India, only 16 per cent of public data is offloaded Players globally are developing models to efficiently
to public Wi-Fi networks, compared to the average of use Wi-Fi to bridge their offline and online presence.
30 per cent in the U.S., the U.K. and France, mainly In China, the Online to Offline (O2O) model is gaining
because of lack of Wi-Fi infrastructure01.However, traction, helping retailers’ market products by using
government impetus for increasing Wi-Fi hotspots Wi-Fi and location-based techniques. A major internet
to 10 million by 202202 and policy reforms such as player partnered with one of the leading commercial
the simplification of Right of Way (RoW) should Wi-Fi service providers to extend its reach to the
ensure universal connectivity as well as low cost for offline channel for marketing products.
operators.
Telcos are establishing Wi-Fi networks in public
places such as shopping malls, railway stations,
gardens and theatres, and are increasingly partnering
with each other to expand their Wi-Fi hotspot
Government impetus for increasing Wi-Fi
network. TSPs and ISPs are jointly working on hotspots to 10 million by 2022 and policy
providing seamless and interoperable internet and reforms such as the simplification of RoW
broadband servcies through public Wi-Fi hotspots. should ensure universal connectivity as well
Femtocells (small towers installed at the user’s as low cost for operators.
location) and Li-Fi (uses light bulbs for transmission)
are other emerging technologies that can support
universal connectivity and bandwidth in future.
01. Telcos may cry hoarse but India needs public Wi-Fi, Livemint, 10 July 2018
02. National Digital Communications Policy, September 2018
31
Building infrastructure blocks from Technologies to expand capacity and

4G to 5G smoothen transition to 5G
While a robust infrastructure backbone is a must for Indian operators are still rolling out the 4G network,
handling increasing data, prudence on technology and coverage in the country lags behind global
adoption, network upgrade and overall transformation peers. The exponential growth in data consumption
is also called for. As 4G-LTE is gaining traction in India, necessitates new technology to raise throughput.
competitive disruption and its impact on profitability Operators globally have increased throughput
and leverage will govern the capex decisions of through technologies such as Carrier Aggregation
telcos in the next few years. (CA), advanced multiple-input and multiple-output
(MIMO), and higher order modulations (for instance,
Fiberisation of backhaul will allow enhanced capacity
256-QAM).
and low latency, and is critical before 5G deployment.
In India, about 80 per cent of cell sites are connected Indian telcos have already adopted 2-band CA. Given
through microwave backhaul and only 20 per cent the consolidation in the industry, 3-band CA is the
through fibre03. However, 70-80 per cent fiberisation next prudent step and can help raise peak speed
is required for effective/efficient 4G and 100 per cent to up to 160 Mbps09. Indian operators conducted
for 5G04. Cumulative fibre-deployed-to-population ratio commercial trials for 4x4 MIMO technology in 2017,
in India is about 0.1x, compared to 1.2x for the United and have begun deploying it in April 2018.
States and 0.7x for China05.
Over the past few years, Indian telcos have expanded CA benefits for global telcos
their fibre network. A large telco aims to roll out
9,000 new sites and 4,150 km of fibre optic in
FY19, taking its fibre backbone to 23,100 km06.
One of the Indian telecom operators plan to invest
South Korea’s largest
USD7.29 billion in fibre network development07. In telecom operator reduced its
FY19, approximately USD10.85 billion (excluding churn to 2.1% from 2.4%
5G spend) investments will be incurred on network
infrastructure08. A significant proportion of these
investments will be incurred on strengthening
backhaul. Singapore’s largest telecom
operator improved its throughput
to 300 Mbps, twice that of the
previous level, and improved its
market share by 3.4%
The telecommunications sector is at the core of
any nation’s growth and development, and India is
no different. Over the years the sector has played
a stellar role in ensuring connectivity for all. We are
Germany’s largest telecom
today on the brink of the next wave of growth in the
operator improved its throughput
form of new and innovative services. Globally CSPs to 300 Mbps, twice that of
are not only focusing in making their networks more the previous level. It improved
agile and cost effective through implementation of data ARPU to USD8.1 (USD7.8
technologies like SDN and NFV but also creating previously)
new business verticals by developing customised
solutions around IOT, analytics, M2M. As some
of these technologies are still fledgling, CSPs Source: India Mobile Broadband Index 2018, Nokia, Accessed Date: 28 September 2018
prefer to partner with tech/platform providers to

develop some of these solutions for their enterprise
customers. This convergence is a start of a new era,
a beginning where the role of the CSP is expected
to be much larger where their strategy should evolve
beyond connectivity. MSPs will play a critical role 03. 5G a distant dream for India when backhaul takes a back-seat: Experts, The Economic Times, 11 Aug
2017
in equipping them with technology and expertise 04. Why India must get fibreised to leapfrog to 5G, The Financial Express, 17 February 2018
to make this network transition seamless in this 05. “Finolex Cables Rating ‘Buy’: Edelweiss says reasonable growth lies ahead, The Financial Express, 16
April 2018”
journey. 06. “Airtel announces massive expansion plans for its future-ready network in Rajasthan, Airtel, 28 August
2018”
Sanjay Malik 07. “Reliance Jio to invest Rs 50,000 crore to build JioGigaFiber network: report, Business Today, 31 July
2018”
Head of India market at Nokia 08. “Post-Jio onslaught, industry survivors pin revival hopes on soaring data usage and consolidation, Crisil
Research, 18 September 2018”
09. India Mobile Broadband Index 2018, Nokia, Accessed Date: 28 September 2018
32
Cloud
Cloud has been at the forefront of major disruptions in order to keep pace with the ever-growing demand
in the ICT industry over the past few years. The of higher bandwidth. The telecom operators are
growth in data traffic from videos to an increased increasingly accelerating investments in cloud
adoption of bandwidth consuming apps is forcing technologies and expertise to be more agile, cost-
service providers to spend significantly on equipment optimised and increase customer satisfaction.
Telco cloud
Telco as cloud user
Virtualised network Agility and flexibility
Software defined networking Optimised connectivity
Network functions More innovation
OSS/BSS migration to cloud Customised products and services
Telco as Cloud Service Porviders (CSP)
New business models Build and sell own IaaS
Product innovation New revenue streams
Alliances and partnerships/Ecosystem Cloud brokering services
Fog computing
One of the emerging solutions is ‘Fog
computing’, which has the potential to
extend cloud computing to power both cloud
and mobile applications through virtualised
resources. Less data is transported to the cloud
for data processing, analysis and storage, raising
efficiency and security characteristics. Fog is
predominantly relevant to IoT, as substantial
bandwidth is required to transmit significant
data volumes generated by all the connected
devices and sensors for processing and analysis.
33
Additionally, numerous innovations adopted by global operators to expand network capacity and strengthen
signalling, are gradually making inroads in India.
New technologies to upgrade/modify 4G and facilitate 5G roll-out
Quadrature Amplitude LoRa

Modulation Narrow Band IoT Network Slicing
(Long Range)
Key Feature - Higher Key Feature - Key Feature - Multiple Key Feature - Long
transmission of data Connects IoT-based networks over range and low power
per waveform devices and M2M common infrastructure consumption wireless
Benefit - Improves communication Benefit - Higher speed technology
network capacity Benefit - Throughput and wide coverage Benefit - Higher range
optimisation (up to compared to existing
200Kbps) cellular networks
Heterogeneous
LTE-A Pro Beam Forming Massive MIMO
Networks (Hetnets)
Key Feature - Key Feature - Radio Key Feature - Key Feature - Include
Interconnection of interface; beam is Antenna technology both large and small
multiple carriers (up to directed from cell base for wireless cell sites
five) station to user device communication Benefit – Support
Benefit - Releases Benefit - Helps in Benefit - Eliminates different radio
spectrum capacity and strengthening signal network interference technologies such as
allows high bandwidth capacity and signal fading Wi-Fi and wireless
(100 MHz) issues
Key Feature - Central cloud-based units to link core network with user and enable mobile
Cloud RAN
edge computing
Benefit - Low latency, faster speed and network flexibility
Source: KPMG India’s Research
SDN and NFV to optimise network architecture

Growing data consumption and bandwidth The use of AI, ML, and deep learning will facilitate
requirement necessitate dynamic network automation and integration of SDN and NFV
architecture to handle traffic and storage. Software- technologies into the network. These technologies
defined networking (SDN) and network function help operators automate manual activities and
virtualisation (NFV), which use virtualisation, are two eliminate delays and errors, thus ensuring faster
major network design-related technologies touted as services and cost benefits. Precision algorithm for
transformational. They allow operators to: intelligent network optimisation, effective operations,
and precautionary maintenance is also essential.
• Upgrade and configure network quickly at a low • One of the telecom operators in India partnered
cost due to standardised servers for software with a Korea-based telecom operator to install AI-
and control functions enabled networks along with machine learning
• Launch new services and applications quickly and big data analytics. This helped to improve
as standardisation eliminates recurring network customer experience by detecting network
reconfigurations. issues, troubleshooting, and optimising network
usage.
34
While India is taking multiple initiatives, it has a long way to go in terms of expansion, modernisation and
improving the efficiency of networks before 5G is rolled out by 2020
India’s technology benchmarking versus global peers
5G 4.5G – 4.5G Pro 4G Fiberisation SDN-NFV
5G test bed LTE-A: February • Leading Indian operator

set-up with IIT 2016 (2 band CA) partnered with AT&T
Chennai in 2018 and Linux foundation for
technology innovation
India • Leading Indian operator
and SK Telecom partnered

for developing SDN/NFV
• Limited policy support
Commercial • LTE-A: March • AT&T to virtualise 75

launch of 5G in 2014 (2 band per cent of network by
U.S. October 2018 CA) 2020
• LTE-A Pro: • Centurylink virtualised
Testing phase 60 per cent of PoPs as

of 2017
Trials completed • LTE-A: March NTT DOCOMO to

in May 2018 2016 (2 band virtualise 75 percent of
Commercial CA) network by 2020
Japan launch in 2020 • LTE-A Pro:
Testing phase
Test trials by • LTE-A: British Telecom uses wide

operators in November 2013 area networking (SD-WAN)
October 2018 (2 band CA) and NFV to launch Network
U.K.
• LTE-A Pro: Automation Platform and a
Testing phase new service
• Soft launch in • LTE-A: Korea Telecom

2018 Olympics November 2013 implemented all layer
South • Network roll- (2 band CA) transformation for SDN/
Korea out in 2019 • LTE-A Pro: NFV in 2017
September 2017
Test trials by LTE-A: September China Mobile deploys

operators in end 2015 (3 band CA) SDN/NFV in September
China of 2018 2018 for core network
separation
Low adoption High adoption
35
Key challenges in terms of transition 5G

and deployment: 5G will allow operators to move beyond
connectivity and collaborate across sectors
The move towards virtualised networks and cloud has
such as manufacturing, finance, transport, retail
indeed allowed telecom operators to be more agile
and healthcare to deliver new and personalised
and flexible; however, there are still challenges faced
services. Opportunities related to IoT, M2M and
worldwide in a software-dominated environment.
AR/VR will create new revenue streams from B2C,
• Migrating legacy set-ups: In actual network B2B and business-to-government (B2G) segments.
scenarios, operators are likely to migrate from
Given a plethora of applications that will be
their legacy set-up and establish a thorough
driven by 5G, network and service quality will
network functionality using software running
be of critical importance in the networks of
on a cloud-based virtualised infrastructure. They
tomorrow. Given the volume of data available at
would have to do this across different network
their disposal, investments and capability building
layers and overhaul their current Operational
in the data and analytics space will be crucial for
Support System (OSS)/Business Support System
operators to service the 5G requirements from
(BSS) systems to properly bill for a new range of
both an effectiveness and efficiency perspective.
services rather than network products
Specifically, enhanced use of analytics will
• Interoperability: Telcos also face a distinctive be critical to further streamline network and
set of challenges while entering a virtualisation business operations while maintaining a high level
space, especially when moving towards the path of network availability and minimising network
of VNF. The integration of legacy platforms would downtime (which could be catastrophic for the
be a significant challenge and in addition to that mission critical applications).
the skill set refresh of the existing workforce
The first commercial use of 5G is expected to be
could pose another risk
for enhanced mobile broadband (eMBB) and Fixed
• Data security: Telecom operators, on their Wireless Access (FWA) services which will meet
journey from being a network company to a the performance requirements of high-demand
cloud company, are likely to face a plethora of applications such as AR/VR and ultra-high-definition
challenges in securing the cloud. Cyber risks are (UHD) video. Beyond eMBB, networks will be able
high and growing at a substantial rate, which to handle different demands on mobility, latency,
further poses a challenge reliability and device density from industries such
as automotive, manufacturing, energy and utilities,
• IoT as risk: Cloud computing is a prerequisite
and healthcare.
for IoT, which requires bandwidth to connect
thousands of devices, where sensors try
communicating with each other, and if not
managed efficiently, the system could crash. As Rapid advancements in the use of machines
the IoT market has a direct connection with the to augment human intelligence are creating a
cloud, the telcos need a secured framework to new reality in which we increasingly interact
determine the security of personal data from any with robots and intelligent agents in our daily
data breaches and cyberattacks. lives, both privately and professionally . The
list of examples is long, but a few of the
most common applications today are found
in education, health care and gaming. As we
look into the future the network will be an
intelligent platform that enables this new reality
by supporting the digitalisation of industries
and society. This network platform consists
of three main areas: 5G access, automation
through agility and a distributed cloud. This
network platform would perhaps deliver truly
intuitive interaction between humans and
machines. We are fully committed to support
the government’s vision of bringing 5G to India
to aid the realisation of ‘Digital India’ initiatives.
Nitin Bansal,
Chairman and Director, Ericsson India Pvt.
Limited
36
5G opportunities for telcos
IoT sensors and networks
Connected utilities
1 2 3 5G Framework
Smart cities
Industrial automation
and IoT Platform
Autonomous robots
to Facilitate Public asset management

and maintenance
Enterprise
2020 Predicted Estimated to Solutions Intelligent automation
Expected to account USD13 billion Traction Remote delivery
launch for 20% addressable
of all data revenue Cloud infrastructure
traffic by opportunity by Intelligent predictive warehousing
2023 2026 demand and supply control
Agriculture (USD400 million) Healthcare (USD1.6 billion)
Public Safety (USD1.6 billion) Manufacturing (USD2.4 billion)
Retail (USD1.15 billion) Energy and Utilities (USD2.1 billion)
USD 1 trillion cumulative economic impact of 5G in India by 2035
Sources:
-.- 5G network to account for 20% of all data traffic in 2023: Ericsson, Hindustan Times, 15 June 2018
-- 5G to offer $27 bn biz opportunity for India by 2026: ERICSSON, The Economic Times, 22 May 2018
While operators can offer a number of data- However, huge spending on the existing network
intensive applications through modification and and fiberisation may restrict immediate large
upgrade of networks, roll-out of 5G will be critical investments on 5G by Indian operators. So while
for services requiring >1 Gbps downlink speed10 there is consensus of thoughts on the benefits and
and 1ms latency11. AR, VR, and cloud-based potential of 5G, its implementation and economic
applications will be the key 5G-enabled applications viability still remains a challenge. The existing
requiring new technology rollouts and network financial stress on the telecom sector leaves little
architecture. room for telcos to invest in 5G.
Emergence of new revenue streams from B2B
and B2G, coupled with growing data monetisation Modification and upgrade of networks, rollout
in B2C segments, is likely to aid revenue growth. of 5G, including AR, VR and cloud based
5G-enabled industry revenue has the potential of applications, will be critical for services requiring
adding USD27 billion business opportunity for India >1 Gbps downlink speed and 1ms latency.
by 2026, out of this USD13 billion is addressable
revenue opportunity for telcos should they be
willing to expand their play beyond connectivity.
10. 5G to offer $27 bn biz opportunity for India by 2026: ERICSSON, The Economic Times, 22 May 2018
11. ITU Regional Seminar 5G Implementation in Europe and CIS, July 2018
37
Bandwidth throughput and latency requirement for 5G-enabled applications
Autonomous driving Tactile Internet

Augmented reality
1ms Virtual reality
Fixed
Real-time gaming
Disaster alert Multi-person Video call On the go
10ms
Nomadic
M2M connectivity
<1 Mbps 1 Mbps 10 Mbps 100 Mbps >1 Gbps
Bi-directional
Automotive ecall First responder connectivity
remote controlling
100ms
Device remote controlling
Wireless cloud-based office

Monitoring sensor networks 1,000ms
Personal cloud
Video streaming
Services inside the blue box to be delivered by legacy networks

Services outside the blue box to be delivered by 5G networks
© 2018
Source: KPMG, 5G:
Understanding an Indian Registered
Perspectives on futurePartnership
technological and a member
advancements
(“KPMG International”), a Swiss entity. All rights reserved.
firm ofGSMA
in mobile, the KPMG network
Intelligence, of independent
Accessed member
on 7 September 2018 firms affiliated with KPMG International Cooperative
1
Document Classification: KPMG Confidential

India is lagging on quality parameters such as
It has been predicted that there will be 40 billion throughput, latency and 4G coverage. To provide
personal smart devices and 100 billion internet next-generation offerings, telcos in India will require
connections around the world by 2025. This will sufficient network capacity to offer high-speed data
virtually eliminate information silos and mean faster, access and ensure minimum latency.
more secure and more intelligent data exchanges.
Annual storage of data generated from this will reach
up to 180 billion TB, a 20-fold increase compared with
today. India will also play a significant role in this as
it prepares for 5G roll-out. Research has shown that With their role expanding
many organisations are already working to seize the beyond just connectivity, telcos
first-mover advantage in the deployment of intelligent will have to invest in next
innovation platforms, aiming to lead in the intelligent generation networks required
world. Enterprises that succeed in integrating sensing, to strengthen traffic handling
connection and intelligence into their businesses will capacity, therefore, ensuring
be the biggest winners in the intelligent world. high standards in service quality
Mr Jay Chen, and data storage.
CEO, Huawei India
38
Rising demand and cost pressures driving technology adoption
Operators will face the need to reinvent business models on both the consumer and enterprise sides to
meet the rising demand spurred by improved networks. Meeting customer expectations in terms of latency,
quality and scalability will be paramount in successful deployment of services.
Drivers Cost pressure
Rise in volume of data being Network opex growing to 31 per

carried by cellular networks- AR/VR, cent in FY20 (22 per cent in FY15)
HD video
2020 - 2.7 billion units of IoT EBITDA margins declining 28 per

devices USD15 billion market size cent in FY20 (33 per cent in FY15)
Critical, real-time and bandwidth

intensive application requiring high Total Debt- Approximately
performance networks. USD119.44 billion in FY18
Technological solutions to support revenue growth and contain cost
Continued roll-out
network transformation
to support revenue and
4.5G, 5G, network- reduce cost
SDN/ NFV – An enabler
slicing, to increase
for virtualisation,
spectrum capacity,
flexible architectures to
bandwidths and
optimise network opex
denser radio
cost
architectures
Sources:
-- CRISIL Research, 8 October 2018
-- India will soon be a leader in IoT, Business Insider, 15 May 2018
39
Innovate
beyond
connectivity
40
Demand for enhanced customer

experience
Since the introduction of 3G, consumers have
demanded higher internet speeds and improved
connectivity. The proliferation of smartphones and
roll-out of 4G has propelled the demand for data
and placed on-the-go content in the hands of the
consumers. 4G has spurred higher data usage
through gaming, video conferences, consumption
of videos, web browsing and social media, with
the availability of high quality video formats and
increased bandwidth. This has led to a seismic
shift in consumer demand and expectations
and telecom operators are rapidly evolving and
upgrading their networks to stay ahead in the
game. They are investing in enhancing their
customer offerings through acquisitions and
partnerships and creating a digital backend, which
can enhance customer experience.
However, the existing high customer churn rate
indicates that telcos need to do the following to
increase customer loyalty:
• Differentiate beyond networks: They need to
deploy disruptive technologies that can help
provide a better customer experience. These
include mobile apps, Software as a Service
(SaaS), AI, IoT intervention, wearables and
AR/VR
• Use advanced analytics to understand
customer preferences based on digital
behaviour
• Transform the organisation culture and
inculcate a customer-centric approach across
all functions.
Omnichannel user experience With evolving networks and proliferation of 4G/

5G devices, consumer needs are evolving beyond
Consumers have an increasing preference for connectivity and demand has shifted to data and
on-the-go applications. This requires strengthening on-the-go content in the hands of consumers.
of technologies allowing ubiquitous access for Operators are increasingly focusing on investing
enhanced user experience. The emergence of in enhanced service delivery capability through
acquisitions and partnerships and creating a
digital technologies has led to the popularity
digital backend, which can enhance customer
of smartphones, social media, smart TV and experience.
wearable gadgets, making the digital platform a
key part of the customer’s journey in a service or
product cycle.
41
Intelligent interactive platforms integral for enhanced customer journey
Research Select Purchase Pickup Use Feedback
E-commerce Compares
similar products
Removal of
Calls for silos
Contact add-on
centre services
Picks
order Unified
view
Store Visits retail store
Adds to cart Tracking

and places Pays customer
Mobile Web search order bill journey
for store
location
Pickup Welcome Predictive
Email
information email analytics
Bill
Social information Omni-
media Reads reviews on Facebook, Twitter channel
digital
Tweets platform
Company usage
Browses company website
website experience
Telcos need to offer an omnichannel user towards omnichannel customer experience

experience because of the emergence of varied through unified billing
touch points and user expectations on quality. • Telcos globally are bundling services such as
This requires customisation of services through chatting, video sharing, mobile payments and
development of intelligent interaction platforms. taxi services under these platforms.
Omnichannel digital platforms enable telcos
to offer customised solutions by monitoring the
customer’s journey from acquisition to churn and
creating actionable insights. Moreover, they can
provide a single platform for consumer grievance
redressal and for offering a suite of digital
services such as music, games, online payments
and education. This may help telcos monetise
data, reduce churn and limit competition from
OTT providers. Some examples of omnichannel
adoptions are:
• One of the Indian telecom operators recently
launched a quad-play platform in a move
42
Customer centric ecosystem
Dimensions of my life and my wallet

Commu-
nication
Work
Transport
Mind My
motivation
Personal
media
Slice of the
wallet
My wallet My attention
Customers
Body
Home
My
connection My watch
Shopping
News and
entertai-
nment
Finances
Source: Innovation Lab at KPMG Ignition, KPMG in the U.S.
Ownership of data which includes: consumer buying allows telcos to strategise store locations,
and viewing behaviour, location-based services and layout and billboard placement
real-time data from customer interaction can help • Telcos can study consumer behaviour data and
telcos leverage big data analytics. collaborate with marketers and other clients to
• Telcos can utilise this data for contextual develop customised products across industries.
marketing and for upselling and cross-selling Telcos globally are creating consumer-insight
products in partnership with IT companies.
• Information gained from location-based services
43
Enterprise offerings to drive the next wave of demand

While consumer demand has led to rapid uptake of provider but also transform themselves into a
4G and operators are investing heavily in building service provider to provide solutions to specific
4G networks, the next wave of innovation in the industry verticals, adopting ‘networks as a service’
telecom sector will be pivoted around enterprise model.
solutions led by 5G. 5G will engage a new
Industry experts estimate India’s IoT market size
generation of consumers and enterprises lured
to touch USD15 billion by 202001. To participate in
by innovative services and seamless connectivity.
this journey, telcos need to create new network
5G, in its initial phase is likely to be targeted at
platforms, business models and capabilities to
consumers to deliver enhanced mobile broadband
harness the new technology.
experience and its next phase, may provide an
opportunity for operators to go beyond connectivity If incumbent telcos are not prompt then non carrier
and partner with service providers across finance, service providers and system integrators can
transport, retail, health and other industry segments continue to fill the void.
to deliver demand stemming from their agenda of
Network as a service is likely to force telcos to
becoming digitally agile.
collaborate with hardware providers, data storage
This not only opens up opportunities for telcos to providers and system integrators to provide a
participate in B2C technology proliferation but also holistic IoT solution to businesses. The potential
to innovate in B2B offerings. The consumerisation opportunities for collaboration seem unlimited. But
of technology will mean that the future telecom to capture value, telcos need to be at the forefront
business models are likely to be driven by users to understand the enterprise solution requirement
– whether in a consumer or enterprise context. and bring together an ecosystem of innovators to
To participate in this opportunity, telcos need to provide a well-rounded approach.
transition their role into not just a connectivity
The time has come for the world to sit up and take notice of India and its capabilities. India today is
doing things in the technological space which the rest of the world can learn from and emulate. Leading
organisations are choosing India to be one of their centres of excellence to develop technologies which
can be exported the world over. We as an organisation remain extremely committed to the Indian market
and consider it an honour to act as a catalyst in the Indian growth story.
Sanjay Kaul
Cisco India Head
01. INDIAN IOT MARKET SET TO GROW UPTO USD 15 BILLION BY 2020, Nasscom, 05 October 2016
44
Redesigning the wheel

With rising internet users, businesses need to
reinvent the way they interact with increasingly
tech-savvy customers.
Changing consumer expectations, connectivity,
network capabilities, cheaper data and devices are
altering the dynamics of most of the industries.
These factors, along with policy reforms, evolving
and converging business models, infrastructure
investments and increasing mobility are pushing
the industry towards a digital ecosystem.
Demand drivers for innovation
TECHNOLOGY/ Government
Consolidation INNOVATION initiatives
IoT
AR/VR Blockchain
AI
Internet penetration Data Robotics and New entrants
analytics CONNECTIVITY automation
3D
Wi-Fi hotspots
printing
Cloud
Omni-channel 4G-5G
digital platform networks
Competition Investments
Broadband Fiberisation
CONSUMER
Cheaper DEMAND Converged services
smartphones
45
Exponential growth driven by technology and innovation

Businesses are creating digital platforms to replace
or augment their high-cost physical infrastructure
for delivering services, increasing customer
outreach, tracking and improving performance and
creating new business opportunities. Telecom has
been instrumental in developing a digital society.
However, it is the enterprise transformation that
will be pivotal to India’s overall growth and a game
changer for the telecom industry.
Telcos are a building block of the digital evolution,
but their role has been limited to providing
connectivity. The returns of digital growth have not
accrued to the telecom sector.
With legacy revenues being under pressure, telcos
should focus on creating new business models to
provide solutions beyond connectivity. Integrated
IoT, cloud, AI and data analytics offerings can
accelerate digital businesses across various
industries, including industrial markets, media
and entertainment (M&E), banking, healthcare,
e-commerce and transportation.
As per the KPMG Innovations Lab’s findings
during an online survey conducted in November-
December 2017, about fifty per cent of tech industry
leaders expect media, transportation, healthcare,
and consumer markets to have the greatest
transformation in the next three years.
In recognition of new business models and
disruption successes such as Netflix and
Amazon Prime, the U.S. sample pegs media to
be heading toward the greatest transformation
(18 per cent) , a finding reinforced by the U.K. at
the same percentage. China, at the forefront of
AI-empowered news and messaging sites, rates
media relatively high as well. China’s embrace of
mobility as a service, including ride sharing, can
be seen in the strong (18 percent) rating in the
transportation vertical.
5G, in its initial phase is likely to be targeted at consumers to deliver enhanced mobile broadband
experience and its next phase, may provide an opportunity for operators to go beyond connectivity
and partner with service providers across industry segments to deliver demand stemming from
their agenda of becoming digitally agile.
46
Top industries that are predicted to have the highest disruption/transformation in the next three years
Global U.S. China India Japan U.K.
Automotive/
transportation 13% 13% 18% 14% 13% 16%
Consumer markets/retail
11% 13% 14% 9% 7% 8%
Education 8% 13% 8% 5% 13% 5%
Energy/Utilities 10%
8% 5% 6% 14% 0%
Healthcare 17% 11%

12% 11% 11% 6%
Industrial
manufacturing 10% 10% 4% 8% 13% 15%
Media
14% 18% 11% 6% 13% 18%
Telecommunications
10% 7% 16% 12% 23% 5%
The above figures were collected during an online survery and captured the opinion of over 750 global tech industry leaders across geographies
With legacy revenues being under

pressure, telcos need to focus on
creating new business models
to provide solutions beyond
connectivity. Integrated IoT, cloud,
AI and data analytics offerings
can accelerate digital businesses
across various industries, including
industrial markets, media and
entertainment (M&E), banking,
healthcare, e-commerce and
transportation.
47
Technology
shaping our
lives
Media and
Entertainment 48
Media and Entertainment: Witnessing converging business models

Media companies around the world continue to face There is a strong sense of urgency to evolve and
a period of profound transformation, brought about by transform.
the prevalence of disruptive technologies. The growth
The TV and film ecosystem is expected to evolve
and scale of over-the-top (OTT) content providers are
and adopt a platform business model, which may
giving consumers more flexibility and choice than
dramatically change the way viewers select, purchase
ever before for their content viewing options.
and watch TV programmes. Companies looking to
OTT content delivery is likely to bring about a participate in the new TV ecosystem are attempting
redistribution of TV industry profits, and it may to navigate an uncharted territory and may need to
just be the beginning. Industry players have spent grapple with significant change.
decades perfecting a highly profitable model that is
The Indian M&E industry is expected to grow at a
now being significantly disrupted, and the onslaught
compounded annual growth rate (CAGR) of 13.1 per
of disruptions is happening at an increased speed.
cent to USD36.89 billion by FY2301.
M&E sub-sector growth (CAGR over FY14-FY18)
Digital Animation
TV Print Films advertising Gaming and VFX
10.7% 6.5% 5.9% 37.5% 21.2% 15.9%
OOH Radio Music
12.6% 10.8% 14.1%
Source: KPMG India research and analysis, Media ecosystems; The walls fall down, KPMG,
September 2018
Digital access and consumption have grown rapidly marking the beginning of a major structural
over the last 24 months following the roll-out of shift. The ubiquitous usage of data is leading to a
4G, supplemented by falling data costs and soaring seismic shift in media consumption. Telecom and
smartphone penetration. Digital usage has become technology companies have an opportunity to serve
more democratised and deeper, benefiting multiple the burgeoning digital subscriber base through the
sectors. Digital advertising and mobile gaming content part of the value chain. Traditional media
grew in excess of 30 per cent in FY1801. Moreover, companies have started to build direct-to-consumer
growing demand for digital content boosted the platforms, resulting in the convergence of business
films, music, animation and VFX segments. On the models in the TMT sector.
flip side, traditional print players, particularly in the
Online video viewers and time spent on digital media
English language segment, are feeling the heat with
have grown in recent years. The number of such
the growing digital consumption as both readers and
viewers in India is estimated to be about 225 million
advertisers are migrating towards digital.
in FY18 and 550 million by FY2301. Consumers are
The convergence of TMT has blurred the lines spending more time accessing media on mobile
between various players across the value chain, phone than on television.
01. KPMG India research and analysis, Media ecosystems; The walls fall down, KPMG, September 2018
Media and
49 Entertainment
Average daily time spent on media
7H 25M 2H 26M 3H 01M 1H 24M
Average daily Average daily time Average daily Average daily time
time spent using spent using social TV viewing spent listening to
the internet via media via any device time (broadcast, streaming music
any device streaming and
video on demand)
Source: Digital in 2018, Hootsuite, Accessed on 28 September 2018
Increasing digital distribution is making media players

focus on content aggregation and sceptical of the
distribution channel. Broadcasters have their own
OTT platforms, but partnerships with telcos have
gained traction in the ‘digital live TV’ segment. Telcos
not only offer a wider reach with negligible customer
acquisition cost but also provide steady subscription
revenue.
The promise of 5G wireless technology holds the
possibility of a sweeping transformation of the TV
and film industry into a platform business model. 5G
is expected to offer a bigger pipe, a faster stream
and lower latency. The potential of bundling is likely
to allow a single window of access to various IoT
solutions, along with content, putting telcos in a
distinct position as against the traditional in-home
providers. However, telcos need to successfully
integrate with the ecosystem to create distinct
bundling solutions. Telcos are already vertically
integrating content creation into their core business,
reflecting the emergence of this trend.
Media and
Entertainment 50
Technology enablers
Rapid technology evolution, driven by connectivity IoT
solutions, has a significant and disruptive impact
IoT can help companies fetch and serve content
on media creation, distribution and consumption.
that would appeal to specific individuals, thereby
Technical innovations such as digital delivery and
improving the client conversion ratio, and boosting ad
consumption, AI, IoT, 5G, robotics and automation,
spend and subscription income.
AR/VR, 3D printing and blockchain are at various
stages of maturity. They can significantly impact
businesses and consumers, including the M&E
sector. Telcos need to decide the extent to which
they want to be a part of this disruption. They can
The BBC is experimenting with
either limit their role to a connectivity provider or be
wearables for news using speed-
the disruptor by being the platform on which these
reading technology from Sprit.
innovations happen.
Iot impact areas for M&E
Product monitoring
Supply chain and customer

IoT budget monitoring
focus Personalised
Premises monitoring
content
Gaming
GPS, RFID working with
near-field communication,
IoT sensors
cellular data, infrared
signals, Wi-Fi, or Bluetooth Music – e.g. free
music downloads
M&E Potential
industry uses
Leveraging location, behaviour, Animation
Monetise consumer preference and
data insights demographic data from
multiple channels/devices
Targeted advertising
Live events –
Bundled with VR and e.g. IoT stadiums
Bundling AI to create enhanced
ecosystems
Source: KPMG India research and analysis, Media ecosystems; The walls fall down, KPMG, September 2018
Media and
51 Entertainment
AI
The media industry is among the largest users of unstructured data such as video, audio, scripts, social media
posts, and hence, is poised to gain from the influx of AI technologies.
AI Technology M&E Category Key Usage Recent Development
By feeding, browsing and scrolling data to several

TV Personalisation complex ML algorithms, these recommendation engines
automatically align the content with the taste and
ML preference of the user
Animation and Character ML-powered facial animation packages allow users to record
VFX design facial data via webcam for creating complex animation
characters in a short time
Natural language Content By leveraging AI-powered voice assistants, several radio

processing Radio classification companies are launching ‘voice on demand’ in order to
and archiving widen their reach
Films Prediction Production houses are harnessing the power of predictive

analytics for facilitating release date selection in order to
enhance box office success rate for the movie
Predictive
analytics Digital Lead Advertising agencies are now using analytical engines
generation powered by ML and big data in order to develop customer
and customer profiles for lead generation and customer retention with
retention data generated by multiple channels and platforms
Video and scene recognition solutions such as AWS

Rekognition and IBM Watson Cognitive Highlights enable
automatic content creation and analysis of emotion.
Hotstar, an Indian online streaming platform, uses AI
platform for performing its global streaming.
Media and
Entertainment 52
Blockchain
Blockchain has the potential to transform several
markets within M&E, particularly those where
participants could benefit from security and
transparency, such as distribution of payments,
funding, monetisation, and contract enforcement.
Transparency is the key value add for M&E industry
Provide transparency to elements of the media

Piracy and entertainment supply chain to curb piracy
Enable tracking of usage and monetisation

Tracking
of digital content
Blockchain-based payment and contract options

Payment can impact pricing, advertising, revenue sharing
and royalty payments
Enable content creators to directly distribute

Content
Aggregation their work to consumers, bypassing traditional
distribution channels
Microsoft launched a blockchain solution for managing content rights and royalties for
media and entertainment industry. The solution will first be deployed in their gaming partner
‘Ubisoft’ and then to their other gaming partners in phased manner.
A video streaming software technology, Linius, has been using blockchain protected content distribution
to fight the war on TV and film piracy.
Media and
53 Entertainment
AR and VR
In India, AR and VR are still in a nascent stage with
limited adoption across sectors. However, in the
past few years, businesses have gained better
understanding of the benefits of AR and VR. In 2018,
the AR/VR market in India, driven by the M&E sector,
is estimated at USD52.7 million, and is expected to
grow 35 per cent between 2018 and 2023 to reach
USD234.4 million01.
Mobile manufacturer OnePlus

streams its launch events in VR; it
started with the OnePlus 2 launch
in 2015, for which the company
even created its own version of a
cardboard headset.
AR and VR, though currently with limited adoption, has huge potential
Marketing and advertising

are expected to become Currently, some basic
increasingly immersive 360-degree VR content is
through AR and VR, being streamed through
potentially generating a video consumption and
higher level of engagement Advertising Videos social media platforms
with viewers
Print Films
Print stories and With the potential to

advertisements are transform movie theatre
being augmented Live events experience, VR theatres
through AR mobile have also started surfacing
applications
Attempts are being made in India to

capture live sports, concerts, product
launches, etc. in VR, and showcase
the novelty of these technologies at
meetings/conferences
Source: KPMG India research and analysis, Media ecosystems; The walls fall down, KPMG, September 2018
01. KPMG India research and analysis, Media ecosystems; The walls fall down, KPMG, September 2018
Agriculture
54
Agriculture: At the cusp of digital disruption

Digital solutions to improve productivity, revitalise Technological innovations to support activities,
depleting natural resources, ensure better farm from production to distribution of agricultural
management and improve farmers’ connect across output, should help resolve challenges faced by key
the value-chain are expected to transform agriculture stakeholders in the agricultural value chain including
in India. farmers, agri-input providers, traders, government,
processing companies and end-users.
Agri-tech start-up models emerging in India
Farming as a service
Up-stream (Input) Engineering led

Marketplace model
(Matching agri-input
sellers to farmer
01 03 05 innovation
Down-stream (Output)
“Farm to Fork” supply chain model
(Matching farmers to businesses or
retail customers for fresh produce,
processed food)
02 04 IoT/Big-data led innovation
Source: KPMG in India’s analysis in 2018
The agri-tech sector offers solutions to several operational challenges. Government’s encouragement has led
to establishment of over 250 start-ups across the value-chain02. Additionally, the government is funding and
providing incubation support to start-ups offering innovative technologies.
02. Promoting start-ups in Agriculture, Ministry of Agriculture and Farmer’s Welfare, Government of India
Agriculture
55
Multiple technological solutions across the value chain to improve efficiency

Technical innovations such as IoT, big data analytics, drones and imaging techniques,
and blockchain are likely to help improve farm productivity, reduce post-harvest loss,
and assure effective utilisation of storage and transportation infrastructure.
Digital interventions across the agri-value chain
Traders/ Consumer/
Production Storage Government Processing
Middleman Retailer
• Lot of critical • Smart • Adoption of e- • Predictive • Data and • Smart

data at various warehousing marketplaces analytics to analytics packaging
sources which solutions for connecting assess crop to assure solutions
could be continuous farmers to production, quality of and real-time
automatically monitoring processing demand- products assessment
collected at of critical companies supply to meeting of quality
low costs parameters eliminating ensure food domestic for safe and
middle-men security and and healthy food
• Data and • Real-time, inflation international
insights-driven sensor based standards
farming for tracking of
increased the produce
productivity from farms
and better to storage
resource minimising
utilisation transportation
risks
IoT and big data

IoT and big data analytics facilitate smart farming
techniques to ensure improved crop yield through
automation and daily monitoring of routine farm
activities. Data collated through sensors and analytics
allow early detection of causes for crop failure and
timely corrective actions to avoid crop loss.
Fujitsu, a Japanese ICT provider leverages

IoT to drive efficiency and improvement in
agriculture production. Its cloud service offer
data-driven agriculture management for farms.
Telecom operators in Colombia offered
solutions to farmers for protecting banana
plantain crops. Wireless sensor networks
were deployed to
monitor parameters
including soil moisture,
soil temperature, fruit
diameter for ensuring soil
fertility.
Agriculture
56
Predictive insights through IoT sensors, drones and imaging techniques
Precision farming to ensure accurate IoT

usage of input at right time for improved sensors
productivity
Soil fertility mapping through satellite
imaging
Smart irrigation based on crop, soil and
weather condition
Tracking crop growth, infestation, and
high-resolution vegetation monitoring
Weather risk management to limit climate
impact on plantation
Crop modelling and demand-supply Thermal imaging to assess crop yield

management to ensure food security and Big data analytics
control inflation
Geo-tagging for crop farm-land area
Warehousing and transport management estimation
to avoid wastage and losses and ensure
storage optimisation
Drones GPS tracking of fuel, routes, idle times
and to control logistics cost
imaging
Aerial drones to track inventory and

spoilage
Engagement platforms
Farmers connect with various stakeholders through
creation of online platforms, mobile applications,
and e-auction portals which can help them address
obstacles such as lack of know-how on new
technologies, use of proper seeds and nutrients,
and availability of financing options and may lead to
elimination of middlemen, faster time-to-market and
lower wastage.
Embrapa, a state-run agriculture research firm

in Brazil partnered with IT firms to develop
drone technology for improving crops. It
utilised Qualcomm’s image processing
algorithms along with TIM’s LTE network
to offer real-time data to farmers.
Telefonica and ABB partnered to develop a

remote irrigation system for farmers in Spain
providing irrigation schedules on mobile
phones and computers. These solutions
were based on mobile network access and
GPRS based remote reading.
Agriculture
57
Blockchain, AI and ML
Blockchain can transform the agriculture supply farming companies and non-profit corporations to
chain by facilitating traceability of produce/product provide technology support to farmers, so they could
to eliminate out-of-date losses and ensure inventory address the adoption and implementation of these
replenishment both in the post-harvest and technologies.
processing stage.
AI and ML are gaining traction as effective crop
modelling and forecasting tools, apart from grading
and sorting of crops. Microsoft signed a
Memorandum of
Limited regulations on contract farming agreements Understanding (MoU) with
discourage contract farming and processing Karnataka Government to develop ML and
companies which could otherwise drive adoption cloud-based technologies for commodity
of technology. Nevertheless, partnerships between price forecasting and crop prediction.
the government, processing companies, contract
Education 58
Education – Technology facilitating fast and last mile access

India has a multi-layered formal education system The government plans to integrate technology into
with 260 million students enrolled in more than education through initiatives such as ‘black board to
1.5 million schools and 27.5 million under-graduate digital board’ and Diksha Digital for teacher education.
and four million post-graduate students enrolled in Telecom proliferation, whether wired or wireless, can
around 800 universities and 39,000 colleges03,04. The play an important role in digital education.
education sector in India is estimated at USD91.7
billion in 2018 and is expected to reach USD101.1
billion by 201905.
Population of about 500 million in the age bracket
of 5 to 24 years05 (the largest in the world) and
increasing internet penetration in urban and
rural areas, at 82.1 per cent and 19.48 per cent06,
respectively, bode well for growth of the online
education market.
India’s online education industry is expected to grow
almost 8 times from USD247 million in 2016 to
USD1.96 billion by 2021, with paid users rising six-
fold from 1.6 million in 2016 to 9.6 million by 202107.
Key e-education categories: Market size and key characteristics
Market size (in USD million)

2016 CAGR 2021P
Driven by the increased acceptance of

Primary and secondary
supplemental education 73 60% 773 online channel and increased internet
penetration in tier 2 cities and beyond.
Driven by high adoption of online channel

Test preparation
43 64% 515 amongst the students and an increase in
the number of competitive exam aspirants.
Skill development & enhancement

requirements for the working population
Reskilling and online
certifications 93 38% 463 will lead to growth in the reskilling and
online certifications market.
Online higher education will also witness

Higher education 33 41% 184 a considerable growth and continue to aid
in distance learning programs.
Online language and casual learning will

Language and
casual learning 5 42% 29 grow driven by growth language learning,
but paid adoption is likely to remain limited.
Source: Online Education in India:2021, Study by KPMG and Google, May 2017
03. All India Survey on Higher Education (2015-2016), MHRD, 2016 06. The Indian Telecom Services Performance Indicators April – June, 2018
04. Educational statistics at a glance, MHRD, 2018” 07. Online Education in India Report, A study by KPMG India and Google, May 2017
05. Education and Training, India Brand Equity Foundation, July 2018
59 Education
In addition, telcos can also play a role of being

the platform to connect prospective students and
content providers. With a ready access to a customer
base, they can successfully play a role of a third party
aggregator. These platforms may not be restricted
to B2B models but could also explore B2C models.
For example, connecting prospective teachers and
students.
With rock-bottom tariffs, telecom operators offering
exclusive content to attract high-data users, and are
either building their own education content teams or
partnering with education content providers.
Technology enablers
Technology-driven learning apps are using gaming elements such as point-scoring and interaction with other
players, personalisation, and data-driven insights to help make the learning process continuous, interactive,
and effective.
New Technologies deployed in Edtech
Technologies deployed Impact areas
Internet
of things
Big • Student centred
data
• Convenient access
Artificial
intelligence • Continuous learning
• Interactive
Cloud • Captivating content
technology
• Global expertise
Virtual
reality • Cost effective
Blockchain
In April 2018, Reliance Industries Limited acquired

majority equity stake in Indiavidual Learning Pvt
Ltd (Embibe), a note AI-based education platform
through which Reliance aims to connect over 1.9
million schools and 58,000 universities across
India with technology08.
08. Reliance to invest $180 million in AI Education platform Embibe over next 3 years, Analytics India
Magazine, 16 April 2018
Education 60
Impact of new technologies on the education sector

Technology-driven learning apps are using gaming elements such as point-scoring and interaction with other
players, personalisation, and data-driven insights to help make the learning process continuous, interactive,
and effective.
Technology Use cases Impact areas Outcomes
Artificial Gamification High user engagement 93% of parents reported

intelligence improvement in children’s
grades
Chatbots Improved interactions 60% of the students

performed better than
with teachers
AI tutors Auto feedback Can guage students

to educators learning style to deliver
customised support
Virtual VR content Close to real experiences Laws of friction module

reality based learning being experimented by VR
Big data Big data Links all the data between Enabled the findings of
platforms resources and outcomes low engagements of
government school girls
IoT MOOC Take notes, bookmarks, Instances where students

(Massive Open test reminders, record took MOOCs & became
Online Course) lessons young programmers
Blockchain Document Significant reduction in Curb the use of fake

storage the paperwork certifications
Sources:
-- How Are India’s Biggest EdTech Startups Winning Students? By Treating It Like A Game, Forbes, 11 March 2018
-- Will these four technology trends change education in India?, Live Mint, 10 March 2018
Key Indian EdTech players:

• Bengaluru-based edtech startup, Byju is intelligence to measure the effectiveness of a
currently leading in the space, which has student.
grown to 1.26 million annual paid subscribers • Mumbai-based hybrid tutoring platform Genext
since its launch09. Students connects parents with the best
• Rajasthan-based Bodhi AI, which is leveraging home tutors for their children.
data collected from students to help them It enables personalised learning
improve in exam scores. for students and provides
• Bengaluru-based tutoring startup Vedantu, real-time progress updates to
which use data analytics and artificial parents.
09. Byju’s crosses Rs 100 crores monthly revenue, Economic Times, June 21 2018
Financial
61 services
Financial services - Technology key for financial inclusion and customer service
Financial institutions are transforming dramatically Digital payments – A giant leap towards a
in the digital age in terms of their roles and cashless economy
responsibilities, service offerings, products and
distribution channels. Several government initiatives have led to an increase
in digital transactions. Mobile wallets and mobile
Strong growth in Fintech, led by the adoption of data banking transactions have grown tremendously to
at the core India witnessed and implementation of 326 million and 308 million, respectively, in July 2018
open banking regulations globally. This has opened from 235 million and 118 million, respectively, in the
up opportunities for non-financial companies such as previous year10,11. Online shopping has been the main
ICT players to foray into financial services. driver of this growth:
The RBI has granted payment bank licences to telcos,
postal service providers, technology companies and
Non-Banking Financial Companies (NBFCs) to meet Google, has launched Google Pay
its agenda of financial inclusion. A large subscriber and has tied up with several Indian
base provides telcos with an edge in the payments banks to offer “pre approved” loans
landscape. to customers
This poses a threat to incumbent financial institutions.
However, collaboration with new players and
converging business models can expedite the
adoption of new-age technologies, unlock revenue
streams, deliver superior customer experiences,
reduce costs and increase customer access.
Consumer preference on usage of e-wallets in India – 2017
E-wallet drivers
7% 23% Ease of use

Movie ticket
purchase 16%
Utility payments
8% E-wallet 19% Discount
Private money
transfer
Spending
28%
Mobile bill
payments
21% 6% 19% Ability to pay

anywhere
Online Food
shopping payments
13% Safety
Source: The state of e-wallets and digital payments in India 2018, Regalix Research, January 2018
10. Mobile Wallet transactions had grown by 14.6M in July 2017, Medianama, 19 September 2017 11. Mobile wallet transactions hit record ₹15,202 crore in July: RBI data, Livemint, 7 September 2018”
Financial
services 62
With a strong digital focus and enabling infrastructure,

digital payments are likely to increase in the coming • Reliance Jio has tied up with State Bank of
years. With the government targeting 30 billion digital India to provide a payment platform offering
transactions in 201912, the mobile payment industry digital banking, commerce, and financial
has a lot of growth potential. The digital payment services to customers
industry is expected to be worth USD1 trillion by • Airtel Payments Bank Limited will leverage
202313. the distribution network of Bharti Airtel
Telecos have also forayed into the banking space. spread across 1.5 million outlets, with
Consumer preference for digital mediums may network presence spreading across 87%
provide opportunities to telcos to expand their of the country, covering more than 400,000
footprint and open up revenue generation channels. villages and 5,000 census towns14.
• French telecom operator Orange has
launched its ‘mobile only’ bank
aiming to capture 25 per cent
of online banking segment by
attracting two million customers
in France alone15.
12. Separate targets for institutions: Govt eyes 30 billion digital payments in FY 2018-19, The Economics 14. https://www.airtel.in/bank/about, accessed on 15 October 2018
Times, 25 April 2018 15. Orange is the new bank? Telecoms giant ventures into lending, The Economics Times, 01 November
13. Digital payments in India to reach $1 trillion by 2023: Credit Suisse, The Economics Times, 15 February 2017
2018
Financial
63 services
Open banking being leveraged by non-traditional players for innovative solutions
Initiatives for open banking can allow new entrants, engagement, and build new digital revenue channels
including non-financial and technological players, into through a shared ecosystem by providing access
the financial services market. Open banking may help to data of financial institutions through Application
players enhance service offerings, improve customer Programming Interfaces (APIs).
Open banking architecture may boost the financial digital landscape in India
Ecosystem that provides a Financial institutions,

user with a network of financial fintech firms, software
institutions’ data through the Objective Who developers and
use of APIs transaction platforms
Banking data access to Transfer information with

third parties in real-time What How appropriate consent
framework
Third parties
Increase Accessibility Increase
Objective to build financial
transparency for customers innovationv
applications
New entrants such as

fintechs and non-financial Market moving towards
Drivers Regulatory push value-added services
players
720 degree customer view through open data
Innovative delivery models such Personalised services based

on intelligent information Foundation for Finance 4.0
as Banking-as-a-service (BaaS)
Source: Fintech in India – Powering a digital economy, KPMG, September 2018
RBL bank has tied up with Bajaj

Finserv to launch co-branded credit
cards using digital and API banking
technology.
Financial
services 64
AI has huge potential to enhance customer

experience and reduce costs
AI is being explored across front, mid, and back

office segments, with use cases ranging from
customer services, targeted sales and marketing,
smart automation of manual intensive processes,
regulatory compliance, fraud and risk management.
Key technical elements of AI such as ML, Natural
Language Processing (NLP) and Computer Vision
have found their way into a number of applications.
• State Bank of India’s chatbot, InTouch,

powered by IBM Watson is used to address
customer queries on banking products and
services
• Motilal Securities uses Phrazor, an AI tool
developed by VPhrase Analytics Solutions to
generate personalised, narrative-based, easy-
to-understand portfolio statements for their
5,00,000 customers in four languages
• HSBC has partnered with Ayasdi
Inc, an AI start-up to combat
money laundering and automate its
compliance processes.
AI-based applications to have an impact across BFSI verticals
Machine Computer
NLP Robotics RPA Learning vision
Front Office Middle Office Back Office
Sales and Distribution Customer Risk Reporting and MIS Compliance

Operations Management Management
• Cross sell and • Invoice
upsell • Chatbots for • Underwriting automation • Image recognition
higher productivity, automation to digitise
• Customer • Intelligent
segmentation query resolution • Portfolio risk document check documents
• E-KYC customer analysis • Automate legal
• Report creation • Smart
onboarding • Claims forecasting reconciliation, disclaimers
• Targeted
• Portfolio and investigation audit trail, variance • Intelligent text
distribution analysis
management extraction
• Customer
behavior analysis • Customer
servicing
Product and solutions Fraud management AML

• Product pricing • Fraud detection • Reducing false positives
• Personalised offerings and investigation
• Intelligent customer and transaction
• Robo advisory • Anomaly prediction segmentation
• Trading pattern analysis
Source: Fintech in India – Powering a digital economy, KPMG, September 2018
Financial
65 services
Blockchain to enable a transparent and secured

ecosystem
Blockchain, which is built on the concept of sharing

information across parties and building consensus
during transactions, can detect fraud instances early
and in real-time. Blockchain can also help BFSIs
reduce redundant cost in processes such as back-
office reconciliation and clearing and settling of
securities transactions.
• MonetaGo, has designed a blockchain

solution for RBI sponsored TReDS exchange
that records hashed invoice data in order to
avoid double financing
• Axis Bank has partnered with Ripple
Technologies for cross border remittances
• IBM has launched a blockchain platform
exclusively for banking and financial
services
Blockchain use cases in financial services industry
Fund Smart
remittance contracts
Clearing and
settling of Claims
securities management
transaction
Trade Capital market

finance trading
Source: Fintech in India – Powering a digital

economy, KPMG, September 2018”
Financial
services 66
AR/VR to enable real-time access to financial services
AR/VR is a new concept in the BFSI space. Banks real-time location of available properties. Some other
have introduced AR mobile apps helping customers use cases are in payments, advanced biometric-
locate the nearest ATM or branch or scan properties based security, financial education and trading.
for sale. AR apps use geo-tags and maps to provide
AR/VR use cases in the BFSI sector
Virtual
Customerservice trading
/ ATM, branch Payments
locations, property
evaluation
Financial Biometric
education security
While adoption of new technologies can revolutionise

the BFSI landscape, mobile technologies and internet
penetration can be key catalysts for their successful
deployment.
BNP Paribas has partnered with a French

start-up to develop a VR ‘experience
capsule’ by offering virtual tour of
properties to real estate investors
Transportation
67
Transportation – Technological advancement in the sector to strengthen the

country’s economic backbone
The automotive sector is a major contributor to GDP,

with a share of 7.1 per cent which is expected to
grow to 12 per cent in 202616.
Companies are aggressively exploring new
technologies to improve service quality amid rising
competition. The government has also chipped
in with initiatives and schemes to help the sector
flourish and modernise using the latest available
technology.
Technology enablers
The convergence of 5G and government incentives

bodes well for transformation of the transportation
sector in years to come.
New technologies transforming the transportation sector
New age technologies New age transportation
Cloud AI and ML Transportation

pods
Shared Bullet
mobility trains
Big data
Blockchain analytics
Application
Air Electric
taxis
by end use vehicles
segment
IoT Robotics
Drone Connected
delivery cars
3D printing
Autonomous
vehicles
16. Auto sector may contribute 12 per cent to India’s GDP in next decade: Anant Geete, The Economic
Times, 18 May 2017
Transportation
68
IoT Big data analytics and advanced machine learning
The convergence of 5G and government incentives Automotive sector is looking to turn volumes of
bodes well for transformation of the transportation passive data into actionable business intelligence
sector in the years to come. through big data analytics and machine learning.
This is likely to improve demand forecasts, and help
Indian Railways has introduced sensor-based on-
predict trends and improve vehicle performance,
board condition monitoring system (OBCMS) for
reduce traffic congestion, increase fuel efficiency,
timely detection of defects related to passenger
and enhance safety.
coaches and tracks on a running train. Using IoT,
OBCMS aims to strengthen the safety of train
operation by constantly updating control rooms with Flexe, a Seattle based start-up, uses big data
coach diagnostics and heating, ventilation and air and analytics to offer on-demand warehousing
conditioning and water management details. by matching available space in a location with
Once deployed, these IoT-based sensors can monitor requests for expedited warehouse facilities.
the health of road, air strips and railway tracks Nimber, a start-up from Norway, tagged
on a real-time basis and enhance safety. This will as “Airbnb of sending parcels”, matches
also reduce operation costs, optimise resources commuters and travellers with
during peak traffic congestion and reduce sudden consumers looking to ship something
catastrophic failures of key assets. across the city, to create a crowd
sourced delivery model.
In India, Ridlr, a transport commuting and
ticketing app and Ola are leveraging mobile and Cloud
IoT platforms to offer end-to-end mass transit
solutions, making the commute seamless Cloud technologies can provide flexibility and
across public transportation modes. scalability to standardised processes across the
Japan’s telecom major NTT, worked with bus transportation value chain, enabling new business
operators to create safe driving conditions models such as virtual freight forwarding, which
for buses and drivers. It combined sensor gives customers direct control over consignments.
enabled vests and IoT to gain information about Carrier technologies may witness major
a driver’s vital health parameters advancement such as ‘uberisation of trucks’, making
like heart rate and nervous system the logistics industry more agile, transparent, and
responses, apart from vehicle and efficient, while ensuring real-time monitoring of fleet
weather condition. capacity availability.
JA Frate, a U.S. based shipping and fleet

maintenance company, implemented a cloud
based freight management system, FACTS,
provided by Carrier Logistics Inc, and a cloud-
based warehouse management system to
support its growth plans, and to
reduce operations and maintenance
cost of on-site IT infrastructure.
Transportation
69
Blockchain
Blockchain technology in transportation may

ensure the accuracy of performance, maintenance,
and service history records of vehicles. Another
prospective use of blockchain is capacity monitoring
and smart contracts allowing self-executing
payments.
Skuchain, a Silicon Valley blockchain start-up,

has created a transportation supply chain
application using blockchain for smooth and
transparent communication, removing
distributors and intermediaries, thereby
considerably reducing the cost.
Robotics
Advanced robotics, with greater mobility enabled by

gyroscopes and mapping technologies, may soon
be able to recognise specific shipments by size and
description and move them to appropriate locations
for picking and packing. Robotics may benefit
immensely from the wireless controls of highly
sophisticated mobile machines becoming feasible
and capable to access massive computing power and
storage available in the cloud. Robotics can reduce
labour cost and delivery time substantially thereby
increasing productivity.
UPS, DHL, and FedEx are experimenting

with robotic loading and unloading of irregular
parcels in their facilities.
Sweden’s Scania, a manufacturer of
commercial vehicles, is collaborating with
Toyota on robotic truck “platoons” that will be
used to move freight at Singapore Port. While,
Volvo is developing self-driving trucks with
capabilities to operate in underground narrow
mine tunnels at depths of upto
1,320 meters.
Transportation
70
Impact of these technologies on the transportation sector
Products (part of value

Impact areas Use cases
chain impacted)
• Reduce operational costs, increase

Autonomous vehicles productivity
• Tesla’s truck with autopilot
(automobiles, private
• Increase pedestrian and passenger safety features facilitate driving
and public mobility
• Enable information sharing by vehicles
• Improve last-mile delivery • Amazon using drone in

Drone delivery
England for delivery under
(delivery) • Facilitate faster delivery 30 minutes
• Solve public transportation issues across the

Transportation pods globe, improve safety • Heathrow airport in
(logistics, delivery, London launched pods for
public mobility) • Navigate through traffic congestion using intra-airport travel
smart sensors, without stopping
Connected cars • Reduce congestion and vehicle fatalities • INRIX delivers traffic data
(smart city, to passenger vehicles
automobiles, private • Enable automakers to develop new tools for to help with shorter and
and public mobility) predictive and preventative maintenance safer commutes
• Reduce carbon emissions and operational • Indian government

Electric vehicles
costs of transportation recently ordered 10,000
(smart city,
electric cars from M&M
automobiles, private • Become integral part of new-age urban and Tata Motors, to be
and public mobility) transportation system used by various agencies
• Uber signed a deal with

Air taxis • Reduce traffic congestion during peak hours NASA to develop on-
(public mobility) • Facilitate faster movements within city demand, 200mph electric
aircraft
• Increase asset availability and energy • Hitachi is currently

Bullet trains efficiency and improve asset utilisation working with Virgin Rail
(smart cities, logistics, to deploy high-speed
public mobility) • Monitor critical train parameters to increase trains across the U.K., for
safety, reduce maintenance cost project BTaaS
Shared mobility • Reduce cost for passengers • Ride hailing apps like
(smart city, Uber, Ola, Lyft are
• Reduce traffic congestion in cities
automobiles, public complementing public
mobility) • Improve air quality due to lower emissions transport in global cities
Sources:
-- Tesla’s Autopilot is supposed to deliver full self-driving, so why does it feel stuck in the past?, The Verge, 24 October 2017
-- Amazon makes first drone delivery to house in Cambridge, The Telegraph, 14 December 2016
-- Airports of the Future May Relax, Instead of Frustrate Us, Temasek, 2 October 2018
-- INRIX is Powering Smart Highways Globally, INRIX, 20 August 2018
-- Tata Motors wins order for 10,000 electric vehicles from EESL, Livemint, 30 September 2017
-- Uber signs deal with NASA to develop flying taxis by 2020, The Telegraph, 8 November 2017
-- Hitachi begins work on Virgin Trains’ Azuma fleet, Hitachi, 5 May 2017
Smart
71 cities
Smart-cities, a move towards digital urban India

The Smart Cities mission aims to transform the quality of life by improving critical infrastructure. ICT solutions
are the foundation for holistic infrastructure in a smart city. The government has allocated USD28.43 billion
for 99 cities. Of this, 16 per cent will be for ICT-based projects17. Additionally, Smart City 4.0 was launched in
collaboration with the United States, India Strategic Partnership Forum, and 1 Million for 1 Billion to accelerate
technologies and create fundable start-ups for developing smart cities18.
ICT solutions to support tech interventions in smart city mission
ICT to Account for ~16% of Total Smart city investments, estimated at ~USD28.43 billion
Undergroung Others
Others
cabling 38%
26%
5%
Sewage
systems
7% Street lighting
and monitoring
Roads ICT Based 4%
Smart projects Intelligent
7% traffic
16% Smart Parking
Systems management
4% system
Housing
26%
11% e-governance
4%
Infrastructure Non-residential Smart Water, sewage
12% development metering and solid waste
15% 11% management
13%
ICT solutions for traffic management, health,

education, waste management, e-governance
and energy management are key focus areas in
smart cities. The mission is being implemented
through area-based and pan-city development
based on finalised principles of integrated
planning, consultation with citizens, application
of IT infrastructure and services, focus on area
development, self-reliance for funding, focus on
smart projects and distinct implementation network.
17. Smart Cities Report, CRISIL Research, December 2017

18. Smart City challenge calls for startups working towards social impact, The Economic Times, 23 October
2017
Smart
cities 72
Technology enablers for holistic digital public infrastructure in smart cities

Increasing use of smartphones and internet access facilities is likely to ensure public safety and control
can fasten uptake of smart solutions in India. Rise crime. Mobile applications and web platforms can
in interconnected devices and development of be effectively used to access applications such as
services and applications to facilitate public services telemedicine and vehicle tracking and for registering
in smart cities may be a key driver of data traffic. In grievances. Apart from this, 24x7x365 helpline
smart cities, IoT and M2M technologies are likely to numbers could help understand public concerns on
be prime technologies, offering IT opportunities of development and facilitate resolution. Geo-location
around USD25 million per city19. based tracking of buses, trains, and vehicles may
help monitor urban infrastructure availability.
IoT sensors in establishments can facilitate real-
time monitoring and collection of data on traffic
movement, power outages, and street lights.
Big data analytics may be used in predictive and Intel rolled out smart city solutions in Taiwan
prescriptive analytics to address issues of traffic in association with Elitegroup Computer
congestion, accidents and thefts in residential and System and Tatung for building management
commercial areas. IoT sensors can also facilitate which includes connecting appliances and
patient monitoring in hospitals, correct water entertainment systems and security
and electricity metering, and monitor air quality, management.
temperature, and humidity. Intel also partnered with Chungwah
Wi-Fi hotspots offer city wide connectivity Telecom for installation of sensor based
alternatives. Internet-connected surveillance through smart poles.
cameras in schools, and residential and commercial
19. Indian Smart Cities: A Pool of IT Opportunities, Enterprise IT World, 01 March 2017
Smart
73 cities
Application of technology in Smart cities
Satellite- Mobile apps 24x7

Public M2M/IoT/ Live
based and web Helpline
Wi-Fi Big data surveillance
tracking platform centre
Energy management Smart health

• Smart meters • Telemedicine
• Smart grids • Remote health monitoring
Traffic and mobility
• Energy efficient and remotely management • Smart beds.
controllable LED street lights
• Smart poles. • Smart parking
• Traffic surveillance
• Automated street signage
and traffic lights
• Geo-location based tracking Water management
of buses and public vehicles • Smart meters
• Vehicle charging points. • Monitoring water quality
E-governance
through sensor
• Public safety surveillance • Identification of water
• Public grievance redressal leakage through sensors.
• Electronic service delivery.
Waste management
• IoT based smart dustbins
• Garbage monitoring system.
Smart education
• Smart classrooms
• School surveillance
• Daily management of activities.
ICT is expected to play a crucial role in construction

North Carolina, Town of Cary has deployed of smart cities, providing different technologies
Cisco’s “Kinetic” a city platform to monitor and systems. Telecom operators can provide the
available parking spots. network for connectivity of IoT/M2M devices, and
Honeywell partnered with Rajkot Municipal infrastructure support through data centres and
Corporation for development of command and cloud storage of data generated from the rise in
control centre and city-wide surveillance. connected devices. Telcos can also partner for
setting up shared Wi-Fi and wired infrastructure
Telecom Italia and Telefonica partnered in smart cities. Equipment providers may provide
for running two trials in a smart city in networking equipment, software, sensors, and
Italy for developing new services in devices needed for creation of communication
big-data space. network and infrastructure for services and
applications.
E-commerce
74
Technology catalysing e-commerce

The emergence of e-commerce in India heralded
the coming of country’s new economy. India’s
online retail market has grown by leaps and bounds
from its nascent state in the mid-2000s to its
current market size of USD19.5 billion20 worth of
transactions at a gross level before returns and
rejections.
Strong government initiatives along with lower
prices of smartphones and data plans as well as
the use of vernacular languages have increased
the adoption of the Internet. This has evolved the
consumer behaviour in e-commerce space which is
now a heavily discounted market place.
Rising consumer expectations and higher
demand for same-day deliveries are shaping the
e-commerce retail supply chain. New business
models, such as those of omnichannel retailing and
last-mile delivery through local retailers are on rise.
Application of technology in the e-commerce space
Ecommerce retail market size
USD Billion • High growth potential from

Driven by focused funding; current 2 per cent of total
customer stickiness retail sales
and geographical • Food and grocery is the
diversification % 36.40 largest segment with
8
Driven by early stage 3 3-3 constant funding infusions
and VC funding; G R– and new players
CA
high pricing • Top 10-15 cities account for
discounts; ease of three-fourths of the total
shopping 15.90 sales
%
– 40 • Uptake in Tier-2 and Tier-3
AGR cities is expected to drive
C future growth
• Customer stickiness
remains a challenge
6.20
• Funding is getting
increasingly concentrated,
constraining expansion
plans of new players.
2014-15 2017-18 2020-21E
Source: E-commerce sector outlook, CRISIL Research, July 2018
20. E-commerce retail logistics in India, KPMG India, May 2018
E-commerce
75
Technology as an enabler
Technology is the backbone of e-commerce by
connecting the sellers and customers on mobile
& web platforms and managing customer orders,
deliveries, returns and payments of purchased goods.
As emerging technologies such as AI, blockchain, VR
and AR become widespread, technology becomes
even more important for the e-commerce value chain,
especially in areas such as recruitment, marketing,
and advertising.
Global players are strategically increasing cross-
border business, transforming social networking to
market places, incorporating multi-lingual integration
and using the modified rebirth of the brick and mortar
model to cover more ground to reach consumers.
Technological shifts in e-commerce

Easy access to instant communication, information
transfer, logistics processing and online networking
have enabled remote orchestration of sustainable
e-commerce platforms. Today, 95.9 per cent of the
internet connected population accesses it via the
mobile devices (phones and dongles) as on June
201821.
Application of technology in the e-commerce space
Mobile
Big data IoT VR/AR AI
technology
Forecast product Track items Virtual Customise entire Scan-and-go

demand through the demonstration of web page based mobile payment
supply chain products on customer methods
Optimise price behaviour
range Informed Virtual walk- AR- and VR-
decisions for stock through tour (360 Actionable enhanced apps
Identify target control, product degree videos) insights based
audience. placement etc. on shelf pictures Utilise smart
New concepts of packaging
interaction: Predictive solutions.
smart dressing analytics
rooms, beacons
or AR catalogue Chatbots and
apps. voice-activated
shopping
devices.
21. The Indian Telecom Services Performance Indicators April – June, 2018
E-commerce
76
Sellers no longer have to micromanage every aspect from digital shopping assistants is an emerging
of the e-commerce business. They also do not need amongst customers. A recently conducted
require huge start-up capital as earlier. Technologies survey by Ericsson shows that 63 per cent23 of
that are driving these changes are as follows: the smartphone shoppers would like a service
that automatically restocks everyday items.
• Big data – Anticipatory shipping is the closest
e-commerce can come towards clairvoyance. A
global online retailer has patented a method and Alibaba claims that AI based smart logistics
system for ‘anticipatory shipping’ in which rather have resulted in a 10 percent reduction in
than relying on inviting or reminding customers vehicle use and a 30 percent reduction in
to repeat their purchases, the system predicts travel distances24.
customers’ shopping lists and deliver the
products to their nearest fulfilment centre even
• Blockchain – Retail giants are embracing
before the order is placed.
blockchain to seize the technology’s potential.
The global omnichannel retailer’s recent patent
Amazon.com has obtained a patent for what describes a ‘smart package’ system that records
it calls ‘anticipatory shipping’ — a system of information on a blockchain regarding the
delivering products to customers before they package’s contents, environmental conditions,
place an order. location etc. for a blockchain-based drone
package delivery tracking system.
Amazon’s Alexa is an example of a connected • Robots and droids – For e-commerce, robots
device that is changing shopping experience and droids are no longer futuristic scenarios. A
for the average consumer. global online retailer started deploying robots in a
few warehouses which created potential savings
of about USD22 million with the potential of
savings reaching to USD800 million if the
• IoT – Retailers will spend USD2.5 billion on IoT
company integrates more robots at its other
by 202022 by giving a digital voice to people,
warehouses as well25.
processes and things, thus enabling better
management of inventory, easy tracking of
thefts and losses and an increase in shopper
intelligence. Amazon has deployed more than 100,000 Kiva
robots throughout its global fulfilment network.24
• VR and AR – These technologies help
e-commerce vendors to display their
merchandises in immersive detail, allowing Omnichannel experience – Fast forward to the
users to visualise themselves using the products future
immediately. This is a distinct way of engaging
customers on online shopping platforms and Technological strides make multichannel selling
providing them near to real-life shopping a greater possibility than ever in the e-commerce
experience. space. Serving several channels at one go increases
business reach, with the rising acceptance of a
platform that can communicate via APIs to various
Lacoste created the LCST Lacoste AR mobile sales channels.
app that customers could use to virtually try
on shoes. Today, software is capable of working smoothly with
data sets from an online store, social media, retail
store and catalogue to attract customers, personalise
• AI – AI-driven algorithms can help personalise their shopping experience and facilitate a purchase
consumers’ shopping experiences by analysing decision. As retailers opt for many channels to
their past buying habits. AI can also assist increase their sales, omnichannel retailing is gaining
with order and inventory management, helping ground in India.
businesses fulfil orders at ease. Getting help
22. 4 Major Ways in Which e- is Benefitting From IoT, Business 2 Community, 15 November 2017 24. Artificial Intelligence in eCommerce – Comparing the Top 5 Largest Firms, Last updated on February 1,
23. Ericsson: New Report: Smartphone Shoppers Altering Retail Reality, PR Newswire, 7 May 2018 2018
25. How Technology Is Redefining E-Commerce. Forbes, 6 March 2018
77
Challenges
to digital
penetration
and way
forward
78
India has made substantial progress in the High capex to impact the adoption of
implementation of technology from 3G to 4G while
also setting an ambitious target of adopting 5G at par
next-generation networks
with global economies. The telecom sector is currently under unprecedented
financial stress. Much of it can be attributed
However, India still needs to cover significant to declining revenue margins because of stiff
ground as indicated by its ranking of 134 in the ICT competition and tariff wars, debt accumulated
Development Index01. Challenges in terms of reduced in light of high spectrum cost and revision of
profitability for service providers, infrastructure, rural taxation structures. This, in turn, limits the ability of
teledensity, skill gaps etc. continue to restrict the telecom companies to invest in strengthening the
advancements of the country’s digital programme. infrastructure for next-generation networks.
These challenges need to be addressed to realise the
full potential of digitalisation.
Margin pressures and a high level of indebtedness limit operators’ investments
Estimated capex for telcos (in USD billions) Opex and margin evolution
17 9.7%
28.0%
FY20E
14 13.5% 10.8%
27.8%
FY18
13.3% 9.8%
33.1%
10.1%
FY17
22.3%
17.1% 4.1%
17.4% 28.5%
30.6%
17.2% 3.0%
3.7%
Access charges Employee cost

FY18 FY 19-20E License fee SG&A
(Cumulative) Network opex EBITDA
Source: Presentation on Telecom Services, CRISIL, May 2018
01. ICT Development Index 2017, ITU, Accessed on 24 September 2018
79
In India, despite the extension of deferred spectrum Spectrum availability and

liability to 16 years from 10 years, cumulative network
capex between FY19 and FY20 is expected to reach
affordability
approximately USD14.9-17 billion02. The capex will The dramatic growth of mobile customers has
be primarily aimed at the rollout and strengthening outpaced the ability of telecom operators to offer
of 4G services and investments for 5G deployment. reliable connectivity. The sector has grown at
Further, with the saturation levels in the urban CAGR of 17.44 per cent03 in terms of subscriber
telecommunications market, telecom operators are base over the last decade and is expected to
looking at new avenues which would involve focus have almost a billion unique mobile subscribers
on rural and semi-urban markets. by 202004. Spectrum availability and affordability
thus is a critical factor to service this growing
Also, as per the COAI, the roll-out of broadband
number of mobile connections and the usage
services across the country would require significant
patterns associated with it. India’s spectrum
investments over the next three to five years for
availability per customer is one of the lowest in
technology, fibre backbone, spectrum and equipment
the world. The scarcity of spectrum leads to a
making clearly evident the capex stress on the sector.
higher cost at the time of auctions and puts the
operator’s balance sheet under stress. This would
not be sustainable in the long run as we have
observed with some of the operators who have
Way Forward – The possibility of sharing exited the Indian market.
infrastructure can be leveraged for achieving
common goals. PPP models may also be
explored for rolling out shared infrastructure
to rationalise the cost. Providing incentives to Way Forward – Greater availability of spectrum
the industry players under the ‘Make in India’ during auctions is likely to rationalise prices.
initiative would help in reducing the financial Reduction in spectrum pricing and better
burden. Further, rationalization of spectrum utilisation of the USO funds would allow
fees will allow operators to invest in upcoming operators some relief on the financial side.
technologies and network infrastructure. Further, availability of E-band and V-band will
allow operators to put a low cost and high
throughput network.
As per the GSMA estimate, the average price
of spectrum of USD0.33/MHz/pop (acorss 850,
1800, 2100, 2300, and 2600 MHz) was almost
50 per cent higher than the median price in
developing countries between 2000 and 2017
making a strong case for reducing the spectrum
cost.
02. Presentation on Telecom Services, CRISIL, May 2018 04. “‘India To Have Almost 1 Billion Mobile Subscribers By 2020’, NDTV tech-media-telecom, Accessed
03. KPMG India’s Research September 2017”
80
Rationalisation of taxes and levies RoW policies to quicken infrastructure

Taxation continues to be one of the highest development
contributors to the cost structure of telecom Obtaining RoW permission from local governments
operators which includes licence fees and spectrum has been a bottleneck in installing fibre networks.
usage charges. Delayed implementation of RoW rules acts as
Spectrum usage charge adds on to the financial an impediment to laying of the requisite optical
burden of telcos since it is based as a fixed fibre, which is the basic requirement for seamless
percentage of a telco’s AGR i.e. better the telco 4G connectivity as well as an enabler for future
performs, higher will be the taxation amount to be requirements such as 5G. Also, many states are yet
paid. Further, the universal service obligation fund to implement the single-window system under the
accumulated so far has not been completely spent RoW rules passed in November 2016.
while telco’s continue to be charged the same.
This reduces funds available with them to invest in
network and technology upgrades.
Way Forward – NDCP 2018 suggests creating
a collaborative institutional mechanism between
the centre, states and local bodies for common
Way Forward – Rationalisation of taxes and
RoWs, standardisation of costs and timelines
levies will help ease the financial burden on
and removal of barriers to approval. Its uniform
telcos. The NDCP 2018 has emphasised on the
implementation across states will ensure
need to reduce levies and adopt optimal spectrum
seamless and timely deployment of the required
pricing.
infrastructure to meet the government’s Digital
The government should consider: India vision. Also, another way to encourage
the states to consider telecom as an essential
• Lowering the high SUC (to limit it to cover
service and provide adequate support to the
only administrative cost of managing
telecom operators, is to create a Network
spectrum)
Readiness Index (NRI) – a criteria to measure,
• Resolving the definition of AGR evaluate and benchmark various states of India
with regard to the state of telecommunication,
• Realigning spectrum payment period
ICT services and network infrastructure. This will
• Rationalising taxes and other levies. also create competitiveness amongst the states
to enhance ease of business and improve their
rankings.
81
Lack of clarity around the Backhaul

monetisation model Limited back network connectivity has impacted
With multiple players in the ecosystem offering the roll-out of telecom infrastructure and
similar services, differentiation is the key to attract connectivity to rural areas. One of the requisites for
more customers and retain existing customers. 5G is a strong backhaul network. Over 80 per cent
Operators need to offer services that are beyond of sites in India are connected through microwave
voice, data and messaging. with approximately 300 Mbps capacity.
Operators are yet to adapt to the convergence

potential of content, media and technology and
Way Forward – Development of a high
partner with the start-up eco-system to offer
bandwidth backhaul with low latency is
services that are beyond connectivity. Passive
necessary to achieve the digitisation objectives.
infrastructure providers are also evaluating
This calls for fiberisation of the towers to the
options for monetizing the space and presence
tune of 80 per cent and higher as compared to
of their towers in collaboration with start-up and
20 per cent fiberisation today. In addition, the
e-commerce providers.
availability of E-band and V-band will help in
Monetisation depends on the effectiveness of data enhancing backhaul.
centres, cloud network, and will require additional
investment in the development of assets and
platforms.
Way Forward – Business models have to expand

beyond retail customers to include enterprises
and government, internet of things (IoT),
augmented reality (AR)/virtual reality (VR), and
cloud-related services for effective monetisation.
82
Digital divide leading to skewed Lack of robust cyber and data security
growth framework
Despite various government initiatives, internet A rapidly increasing user base on account of
penetration rate in rural India stood at 19.48 per increased affordability comes with another set
cent with 173.2 million users as compared to of challenges that demands attention right at the
338.84 million users in urban areas as on June CXO levels of organisations today i.e. availability
201805. Limited penetration of private operators of a robust cyber and data security framework.
because of huge capex requirement limits the Cyber and data security gains significance with
roll-out of backhaul. Few instances of private the increased usage of data, applications and
contribution include: interconnected devices. Cyber-attacks result in not
only service disruptions but also data loss.
• Operators are partnering with BharatNet to
boost broadband penetration in rural areas. This
will help set up broadband experience centres,
providing 100 Mbps connectivity through Way Forward – It is essential to define a
BharatNet’s infrastructure policy that takes a comprehensive approach to
security and privacy that ranges from devices
• Operators are planning to offer 4G services to
and gateways with connectivity to the cloud; IoT
rural areas through satellites, using capacity
platforms and applications; chips to services;
from the Indian Space Research Organisation
and development to operations. Further, the
(ISRO).
organisations can also set up a multi-stakeholder
cell with capability and capacity to provide
proactive and responsive crisis management.
Way Forward – Better quality data services
at more affordable prices, infrastructure
investments, digital literacy and the availability
of cheaper handsets will help bridge the digital
divide and promote internet penetration in rural
areas.
Speedy fiberisation of rural India will be critical
for the digital penetration. Government should
formulate policies and encourage public private
partnerships for the nationwide roll-out. Models
allowing fibrecose and utility companies to
roll-out common fibre infrastructure should be
encouraged.
05. The Indian Telecom Services Performance Indicators April – June, 2018
83
Bridging skill gap is a prerequisite to Constraints limiting the degree of

digital transformation innovation
Skilled manpower is essential for adoption and As per a KPMG report - The Changing Landscape
implementation of new technologies which leads of Disruptive technologies08, 22 per cent of the
to overall growth of the sector. The roll-out of industry leaders surveyed felt that government
newer technologies promises to bring about an restrictions in the form of regulations act as one
exponential growth in employment opportunities of the leading limiters in encouraging innovation in
for skilled resources. In the digital ecosystem, a the industry. The industry players and businesses
huge gap exists in the technical and software skills want a very high degree of transparency translating
required for implementing new technologies, such to regulators. The absence of robust technology
as 5G and M2M and evolution in the ICT sector. standards and legacy IT infrastructure act as
another roadblock towards encouraging innovation.
As newer technologies continue to emerge and
older technologies evolve, integration complexities
64 per cent of organisations viewed widening faced by consumers as well as enterprises are only
skill gap as a key concern06 expected to grow further.
49 per cent of employees expect current 22 per cent leaders viewed regulator policies
skills to be redundant in the next 4-5 years with
as restrictive
34 per cent of employees expecting skills to
be redundant in the next 1-2 years06
17 per cent felt access to talent acted as a

Demand-supply gap of 200,000 data analytics barrier to innovation
professionals by 202007.
11 per cent identified non-existent tech

standards as a leading factor
Way Forward – Capacity-building exercise
may be undertaken at the grass root level with
involvement of state and central education
machinery. A network of skill development 20 per cent cited legacy infrastructure as a
centres may be established to promote hindrance.
development and learning of multiple skills.
Way Forward – The need of the hour is for

technology players to collaborate more amongst
themselves and develop solutions that provide
more value to the end consumers.
06. India emerges as biggest source for digital talent: Survey, Economic Times Updated: October 26, 2017
07. The digital skill gap that may trip the IT juggernaut in days to come, Business Standard, 09 June 2018
08. The Changing Landscape of Disruptive Technologies, KPMG U.S., 2018
84
Multiple regional languages add complexity to content creation

Video viewing accounts for a large percentage of data usage. In the next five years, 90 per cent of the
incremental internet users in India are likely to be local language users.09 Lack of content in the local
language will act as a serious limiting factor in content uptake.
Way Forward – Telecommunications and digital

service providers have to create regional content
and develop multi-language data analytics tools
to gather consumer insights. Devices need to
provide Indian language support along with
content.
85
Glossary
3D Three Dimensional EMCs Electronics Manufacturing Clusters
3G Third Generation FDI Foreign Direct Investment
4G Fourth Generation FWA Fixed Wireless Access
5G Fifth generation FY Financial Year
1M1B 1 Million for 1 Billion GB Gigabyte
IPv6 over Low Power Wireless Personal Gbps Gigabytes per second
6LoWPAN
Area Networks
GDP Gross Domestic Product
AGR Adjusted Gross Revenue
GI cloud Government of India cloud
AI Artificial Intelligence
GPRS General Packet Radio Services
AIM Atal Innovation Mission
GPS Global Positioning System
AML Anti Money Laudering
GST Goods and Services Tax
API Application Programming Interface
HD High Definition
AR Augmented Reality
HSBB High Speed Broadband
ARPU Average Revenue per User
IaaS Infrastructure as a Service
ATM Automated Teller Machine
Indian Computer Emergency Response
ICERT
B2B Business-to-Business Team
B2B2C Business-to-Business to-Consumer Information and Communication

ICT
Technologies
B2C Business-to-Consumers
ID Identification
B2G Business-to-Government
IMC India Mobile Congress
BaaS Banking as a Service
IoT Internet of Things
BFSI Banking, Financial services and Insurance
IP Infrastructure Providers
BHIM Bharat Interface for Money
IP Internet Protocol
BSS Business Support System
IPR Intellectual Property Rights
BTS Base Transceiver Station
IPTV Internet Protocol Television
C2C Consumer to Consumer
IPv4 Internet Protocol version 4
CA Carrier Aggregation
IPv6 Internet Protocol version 6
CAGR Compound Annual Growth Rate
ISP Internet Service Providers
capex Capital Expenditure
ISRO Indian Space Research Organisation
CERTs Computer emergency response team
IT Information Technology
COAI Cellular Operators Association of India
ITeS Information Technology enabled Services
CSP Cloud Service Providers
ITU International Telecommunication Union
DTH Direct-to-Home
Kbps Kilobytes per second
Earning Before Interest, Tax, Depreciation
EBITDA
and Amortisation KYC Know Your Customer
EDF Electronics Development Fund LED Light Emitting Diode
eMBB Enhanced Mobile Broadband LF Licence Fee
86
LiFi Light Fidelity RoI Return on Investment
LoRa Long Range ROIC Return on Invested Capital
LTE Long Term Evolution RoW Right of Way
M&E Media and Entertainment RPA Robotic Process Automation
M2M Machine-to-Machine SAAS Software as a Service
Mbps MegaBytes per second SDN Software Defined Networking
MHz Mega Hertz SD-WAN Software-defined Wide Area Network
MIMO Multiple-Input and Multiple-Output SEZs Special Economic Zones
ML Machine Learning SMS Short Message Service
MOOC Massive Open Online Course SONs Self-Organising Networks
MoU Memorandum of Understanding SUC Spectrum Usage Charges
MSCI Morgan Stanley Capital International SWANs State Wide Area Network
National Aeronautics and Space TB Terabyte

NASA
Administration
telcos Telecom companies
NAT Network Address Translations
TFC Telecom Finance Corporation
NBFC Non Banking Financial Companies
Technology, Media and
TMT
NBIoT Narrow Band IoT Telecommunications
NDCP National Digital Communication Policy TSP Telecom Service Providers
NFV Network Function Virtualisation TSSC Telecom Sector Skill Council
NLP Neuro-Linguistic Programming TV Television
NLP Natural Language Processing TVWS Television Whitespace
NRI Network Readiness Index UHD ultra-high-definition
O2O Online-to-Offline UID Unique Identification
OBCMS On-board Condition Monitoring System UPI Unified Payment Interface
OFC Optical Fibre Communication USD United States Dollar
opex Operating Expense USO Universal Service Obligation
OSS Operational Support System USOF Universal Service Obligation Funds
OTT over-the-top VC Venture Capitalist
PCBs Printed Circuit Boards VFX Virtual Effects
PMA Preferential Market Access VoLTE Voice over Long Term Evolution
PPP Public Private Partnership VNF Virtual Network Function
QAM Quadrature Amplitude Modulation VR Virtual Reality
QoS Quality of Service WiFi Wireless Fidelity
R&D Research and Development Wireless Highway Addressable Remote

WirelessHART
Transducer Protocol
RBI Reserve Bank of India
YoY Year over Year
RFID Radio Frequency Identification
About IMC
India Mobile Congress (IMC) is the largest mobile, participation of 10 Partner Countries, 200+ Global
Internet and technology event in South Asia. Speakers, 300+ Exhibitors, 5,000+ CXOs, 1,000+
Due to the resounding success of its inaugural International Media and 100,000+ visitors. The
chapter in 2017, IMC has become a key platform international symposium will encourage debates
to showcase India’s digital journey towards and dialogue that affect policy and standards,
becoming an empowered global knowledge which in turn should help in bridging the digital
economy. Organised jointly by the Cellular divide, enable financial inclusion and create
Operators Association of India (COAI) and the a facilitative ecosystem for the development
Department of Telecom (DoT), the mega-event of crucial technologies. The aim is to create
will allow the world to see India as a leader in the an ecosystem for ICT players and all relevant
Telecommunications and Technology space. IMC stakeholders to take part in the realisation of
2018 is supported by several Government bodies, the Digital India program. IMC 2018 also aims
such as the Ministry of Electronics & Information to build upon innovative ideas, form long lasting
Technology (MeitY), Ministry of Skill Development industry relationships, showcase cutting-edge
& Entrepreneurship (MSDE), Ministry of Housing mobile technology and product trends, and
and Urban Affairs (MHU), in addition to various provide sectorial insights and impactful solutions.
other technical and regulatory outfits. This year, the event will particularly encourage
the country’s robust startup ecosystem and
With its theme New Digital Horizons: Connect,
budding entrepreneurs, through various targeted
Create, Innovate, IMC 2018 is anticipated to be
engagement programs.
bigger and better than its first iteration, with the
About KPMG in India

KPMG in India, a professional services firm, global and local industries and our experience of
is the Indian member firm affiliated with the Indian business environment.
KPMG International and was established in
September 1993. Our professionals leverage KPMG International
the global network of firms, providing detailed
KPMG is a global network of professional
knowledge of local laws, regulations, markets
services firms providing Audit, Tax and Advisory
and competition. KPMG has offices across India
services. We operate in 154 countries and
in Ahmedabad, Bengaluru, Chandigarh, Chennai,
territories and have 200,000 people working
Gurugram, Hyderabad, Jaipur, Kochi, Kolkata,
in member firms around the world. The
Mumbai, Noida, Pune, Vadodara and Vijayawada.
independent member firms of the KPMG
KPMG in India offers services to national and network are affiliated with KPMG International
international clients in India across sectors. We Cooperative (“KPMG International”), a Swiss
strive to provide rapid, performance-based, entity. Each KPMG firm is a legally distinct and
industry-focussed and technology-enabled separate entity and describes itself as such.
services, which reflect a shared knowledge of
Acknowledgements
Special thanks to the following members Acknowledgements from COAI:
of KPMG in India for their leadership and
• Vikram Tiwathia – Dy. Director General
guidance in preparation of this report:
• Gopal Mittal – Sr. Director (Finance & Commercial)
• Mritunjay Kapur
• Saurabh Puri – Sr. Director (Research & Analysis)
• Purushothaman K G
• Amrita Anand – Sr. Manager (Legal)
• Mohit Prabhakar
• Vikas Kumar – Sr. Manager
• Rahul Hakeem
• Nabil Syed – Asst. Manager
• Sonica Bajaj
• Anandhi Nair –Dy. Manager
• Girish Menon
We would also like to acknowledge Acknowledgements from IMC:

the core team from KPMG in India who
• Ankita Mittal
worked extensively in preparation of
this report: • Dhruv Sood
• Abhirajika Rathore • M A Sudhakaran
• Arjun Malhotra • Nitish Aneja
• Anshuman Jha
• Avinash CH
• Darshini Shah
• Devanshee Deepak
• Gopalakrishna Anantha
• Kshitiz Vaish
• Mandan Mishra
• Nisha Fernandes
• Pawan Hejamady
• Ragini Singh
• Rahil Uppal
• Richa Joshi
• Rishabh Amla
• Rishabh Rane
• Rohit Bajpai
• Sanjna Dhingra
• Sharon D’silva
• Shilpa Bhoir
• Sunit Kumar
• Utkarsh Bamrara
• Yatin Gaind
• Yasharth Srivastava
KPMG in India contacts: IMC contacts:
Mritunjay Kapur P Ramakrishna
National Head CEO
Markets and Strategy India Mobile Congress
Head - Technology, Media and Telecom T: +91 – 011- 23440234
T: +91 124 307 4797 E: ceo@indiamobilecongress.com
E: mritunjay@kpmg.com
Grace Mathews
Purushothaman K G Program Director
Partner India Mobile Congress
Risk Consulting T: +91 – 011- 23440232
T: +91 22 6134 9523 E: grace@indiamobilecongress.com
E: purushothaman@kpmg.com
Mohit Prabhakar
Partner
Risk Consulting
T: +91 124 336 9465
E: mohitprabhakar@kpmg.com
Rahul Hakeem
Director
KPMG in India
T: +91 124 336 9706
E: rahulhakeem@kpmg.com
Sonica Bajaj
Director
Markets
T: +91 22 3090 2705
E: sbajaj@kpmg.com
Follow us on:
kpmg.com/in/socialmedia
The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate
and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such
information without appropriate professional advice after a thorough examination of the particular situation.
The views and opinions expressed herein are those of the interviewees/survey respondents/quoted individuals and do not necessarily represent the views and opinions of KPMG in India.
© 2018 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG
International”), a Swiss entity. All rights reserved.
The KPMG name and logo are registered trademarks or trademarks of KPMG International.
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New Digital

India Mobile Congress 2018

Significant intervention from all

Simplification and Favourable device, Redefine Adjusted

The Indian telecom sector has charted an Connect the unconnected

devices. Consumers are demanding more from their Conclusion

Major milestones achieved through government’s initiatives02,03,04

Digital empowerment Innovation and

Source: MEITY and DOT Annual report 2017-18, https://www.thehindubusinessline.com/economy/budget/slick-rise-in-funds-for-smart-cities/article22624920.ece

Interesting facts summing up India’s current digital drive

Total Total telecom Total internet Active social

M-wallet Mobile banking

Number of 114,552 GPs

05. KPMG India’s Research

Average Average Ecommerce

Highest 99% 161.2 54.2 83% 84% 2,062

India 39.32% 19.7 9.1 79% 63% 113

India Mobile connectivity index

Consumer Content and

Sources: GSMA’s mobile connectivity index accessed on 16 October 2018

05. KPMG India’s Research

Growth of telecom industry

IPTV Deployment of IoT, AI, VR/AR

Cloud 2017: Data share Rural

2013-14 2014-15 2015-16 2016-17 2017-18E 2018-19F 2019-20F 2020-21F 2021-22F

Total data subscribers Total subscribers

Data usage per

Sources: Crisil Research, Accessed Date, 08 October 2018

Connect, create and innovate

CONNECT the unconnected

CREATE an ecosystem for digital enablement

INNOVATE beyond connectivity

11. State/UT wise Aadhaar Saturation, 30 Sep 2018

State-wise urban-rural teledensity - The stark urban-rural divide

Rural teledensity All India - June 2018 89.72

The Indian telecom sector is going through an invigorating

Vectoring on rural India

Fixed and mobile broadband subscriptions per 100 inhabitants, in 2017

Source:The State of Broadband: Broadband catalyzing sustainable development, September 2018

The government has also been

Status of BharatNet project

Status as on Status as on Status as on

1. Optical Fibre Communication 2,79,346 kms 2,43,590 kms

Urban India and the surge of data usage

Falling data tariffs have led to rapid data uptake10

FY15 FY16 FY17 FY18 FY20

Source: Crisil Research, Accessed Date, 08 October 2018

With continued operator investments

Rise of digital media proliferation to drive future adoption

~100 mn VoLTE connections 800 mn

Average monthly data usage per

With expected exponential rise in

Video streaming has the biggest share in media consumption

8-10% 4-8% Active users (in mn) of OTT platforms

65-75% Sony LIV 5

Online video consumption grew 5X in 2017

Online video audience (millions) Video OTT revenues (INR billion)

Emergence of triple-play and quad-play services

Apps and streaming

Control over content is driven by collaborations and investment models

Partnerships Strategic investments

• Airtel, Vodafone Idea • Reliance Jio aggregating content and investing in

The road to growth: Disruptive business models

12% 11% 10% 9% 9%

The survey also indicated that over the next three

The road to growth: Disruptive business models

26% 19% 14% 11%