Optic fibre for mobile data is overrated: Idea Cellular MD Himanshu Kapania

Deepali Gupta
The Economic Times
15 March 2016

Microwave can easily take care of the current demand for high-speed broadband services, says Idea Cellular managing director Himanshu Kapania

New Delhi: Idea Cellular managing director Himanshu Kapania has downplayed the importance of optic fibre for mobile data expansion, saying microwave can easily take care of the current demand for high-speed broadband services. "Optic fibre is overrated," Kapania told ET. His comment comes at a time when laying this fibre is touted as the big difference between Reliance Jio Infocomm's Rs 1 lakh crore yet-to-launch network and those of existing telcos, which depend on microwave as the backbone.

But Kapania maintains his stand. "There is no need for it (optic fibre) now. How do you justify putting up such cost ahead of demand," said the top executive at India's third largest mobile company. He though said that optic fibre could be needed at a later stage. "When we add spectrum to handle significantly higher capacity, we will look at it." At the moment, however, even the fibre that exists isn't entirely used.

Idea Cellular, like most of its peers, uses microwave signals to carry backhaul, or signals within the network once passed from the mobile phone. On existing microwaves, data speeds of up to 500 megabits per second are already supported. Moreover, on e-band microwaves which the government is likely to give to operators that back-end speed can run in gigabits. With that in place, Kapania said the existing demand for mobile Internet can be more than met with existing networks.

Mobile operators are drifting towards data focus over call focus as networks evolve to 4G technology. Data services are considered more profitable than calling but the Indian market still comprises 70% revenue from voice calls.

Bharti Airtel had earlier announced a capital expenditure plan to increase its optic fibre network and Vodafone India has had a stated plan to up its fibre presence across the globe, India included.

Kapania reiterated what Idea Cellular has said once before, the capacities being c;reated by telecom operators exceed demand. At current rate, Kapania estimates data needs to be more than fully met through wireless backhaul for another three or four years. By which time Bharat-Net, a government plan to lay national optic fibre, may well have become live and accessible to all operators.

The reason optic fibre is highlighted globally, Kapania explains, is because fixed line companies have had it and projected it. They are now also using it as a means to boost data businesses. Yet, for a pure play mobile operator, making that investment isn't needed immediately, he said.

In better penetrated cities, such as Mumbai and Delhi, the cost of laying these cables is prohibitive to business. In some cases it is reported that laying a kilometer of cable in Mumbai can cost as much as Rs 60-70 lakh with municipal charges.