Why Internet of Things (IoT) has immense potential in India?
The Internet of Things is generating enormous interest in the telecom world nowadays. IoT is expected to digitize our lives while making us more efficient and dependent on technology. For the telecom operators in the saturated developed markets, it could also be the next big source of revenue. Let me try to define this technology first. Internet of Things is a seamless network of uniquely identifiable everyday devices and objects that are connected to each other and the Internet with the purpose of making the daily life smarter and efficient through exchange of data between these connected machines without requiring any human intervention. Some have even called it the Internet of Everything.
Without violating an individual’s privacy, I believe IoT has tremendous potential in a fast-developing country like India. Seamless Internet connectivity through either Wi-Fi or high-speed cellular network is a prerequisite for this technology and India is getting there, albeit slowly. Mobile revolution has taken a solid foothold in the country. Smartphones are becoming increasingly common and possibilities of what can be achieved through a few finger touches on a mobile app are mind-boggling. The government’s latest push towards ideas like Digital India and Smart Cities is targeted primarily towards making people’s lives hassle-free and efficient. IoT fits very well in such a scenario and could be a growth driver for the country. In a vision document released by the government last October, an objective has been set to create a $15 billion IoT industry in India by 2020. Investments have started flowing in already. Cisco has committed $40 million to the Indian IoT space. Intel Capital, Qualcomm Ventures and many other VC firms are also investing millions of dollars in this industry. With such major push, here are some applications of IoT that can be implemented in India –
- Home Security – Security of homes in the absence of occupants is a major issue in many parts of India. IoT has a solution here. A set of strategically placed cameras connected to the Internet can provide a live feed of activities in and around a home on the owner’s device. Such systems are already in use nationwide. The next step would be to monitor the house through a mobile app with a built-in capability to immediately contact the police or local security authorities. A sensor that monitors opening of doors and windows, controls lighting smartly and detects unusual sounds when no one is home can help in preventing burglaries and intrusions. Godrej Security Solutions’ Eagle-I Pro is a wireless home alarm system that uses a mobile app and features many such IoT home security aspects.
- Automated Homes – The concept of smart appliances and devices within a home that inter-network with each other is more about convenience than anything else. Imagine a refrigerator that detects the grocery levels and sends a list of things to be ordered to the owner. Not only that, with a few touches on the mobile device, the order can be placed at a nearby store which delivers the products within a day or so. Next, how about a temperature control system that can be commanded remotely to keep the house at a certain comfortable level before the kids get back in? A recent product which accomplishes an interesting set of tasks in an automated home is TagPlug. It is basically a smart switch and plug that senses if a room is occupied and runs the equipment in the room accordingly. It even helps in saving electricity by automatically switching off – lights, phone charging or the water motor once the task is completed. Sounds cool? We will get to the ‘is this really needed’ part later.
- Sanitation and Cleanliness – With the current government’s latest Clean India initiative, there is a new found emphasis on keeping the surroundings clean. Commonly cited application is of a neighborhood smart trash collector that alerts the municipal authorities when full. If the sanitation crew does not respond within a certain time period, the trash collector can also send a message to the higher personnel in the department. Wireless sensors that detect dirt piles and unclean areas can be deployed in dense areas of a city. Pay as you throw model charges people on basis of how much garbage they throw and want to get collected. Such trash metering will discourage people from generating waste and hence would be very useful in India. Mumbai and Ahmedabad have conducted pilot projects using Vehicle Tracking Systems that track the movement of garbage trucks and help in route planning along with efficient allocation of sanitation staff.
- Healthcare – Tracking and remotely monitoring a patient’s health (with the patient’s permission) is another popular application of the Internet of Things. The technology has been applied in two ways. First, hospitals and doctors can track vulnerable patients and elderly people for any sudden changes in vital parameters. IoT devices can even include panic buttons in order to minimize emergency medical situations. Robert Bosch in collaboration with the Indian Institute of Science has designed applications that achieve some of these objectives. Fitness app that measures exercise, weight, blood pressure and other vital statistics is also an emerging area of interest. The app sends data to either the healthcare provider over Internet or uploads it to a user’s database for storage. 2mpower and SenseGiz are two startups having products in this space.
- Traffic Control – Ever-growing traffic is a huge problem nationwide. IoT can help here too. Intelligent traffic management systems are the most obvious applications. A common scenario is the estimated time to reach a destination based on vehicle density ahead. Further step could be the delivery of live traffic feeds to a user’s phone or car that assist in making route decisions and avoiding congestion. Smart traffic signals can regulate the traffic flow at busy intersections. Improved parking is another focus area here. Wireless sensors that intelligently gather information on parking availability can directly connect to a driver’s phone. This makes it easier to find a vacant parking spot without driving around. Altiux Innovations is a company that has come up with a smart parking solution.
- Transportation Logistics – Fleet tracking and monitoring could improve the overall performance of goods transportation. Wireless tags inside trucks can provide the owners with a real-time capability to scrutinize the use of vehicles on road. Freight theft and driver behavior can be checked too. Tata Motors is empowering its trucks with such technology. Telematics4u is a company that works with state governments to prevent illegal trading of minerals. Their system puts smarts tags in trucks that keep a check on supply, truck routes and unlawful distribution of minerals before reaching the intended destination. All this can greatly reduce losses for the industries while controlling corruption.
- Agriculture – Internet of Things is not just a technology for urban areas. Farmers can also benefit from it by modifying their procedures based on collected data. This could include precise weather monitoring, updates on soil moisture levels, ability to customize climatic conditions for healthy production of fruits and vegetables and temperature monitoring in the grain storage areas. Health analysis of livestock and remote pest monitoring are other possible applications. An improvement in the efficiency of agriculture will have a direct positive impact on the economy of India.
- Individual Safety – IoT finds use in enforcing law and order too. Wearable devices for women and elderly can help prevent trouble. Such embedded devices will come equipped with a high-pitched alarm and panic button. They will draw public attention and will also send a text message through the cellular or satellite network with the user’s location to certain contacts from the phone. The capability to contact the police or security authorities can also be built into the wearable. All this will reduce crime by discouraging attackers and provide more confidence to women if they venture out alone or after dark. Many such gadgets are in developmental stages in India.
- River Management – Another big project being undertaken currently is cleaning of rivers, especially the longest river in the country, Ganga. Wireless sensors at various locations on the banks of the river can detect chemical and biological contaminants that are dumped into the river from various factories and cities. All such data will be collected at the local server that further sends it to the regional monitoring site. This helps in identifying polluters and repeat offenders. Tracking the water level in rivers and dams can avoid flooding disasters. L&T Technology Services has delivered products in this field of water management.
- Smart Cities – Many of the above IoT concepts tie into the bigger idea of a smart city, which is again a huge project in the government’s future plan. Smart cities are information technology backed urban areas in which everything from essential services to luxurious amenities is based on the IT infrastructure. Wireless devices and sensors that feed data into central system are an important component of such cities. Basic amenities such as electricity and water and broader issues like traffic and parking are all controlled from a smart grid and this makes the whole mechanism very efficient. High speed Internet connectivity in these cities is ubiquitous. The government wants to establish 100 smart cities in India in the long term for which it has already allocated a budget of about $1.2 billion. Many countries have shown interest to participate in the development of these cities. Cisco is a big name among the companies that have developed blueprints and concrete plans for such intelligent dwellings. However there is not much clarity on the actual implementation yet and challenges remain before this dream can be turned into a reality.
These are just some applications of the revolution called IoT. There is absolutely no dearth of cool stuff happening in this space. A startup named CarIQ has developed a plug & play device that connects to the car and continuously runs the cars’ diagnostics. The collected data is sent to the cloud that processes the information and sends it to the owner’s phone via a mobile app mainly in the form of alerts. SmartBuildings offers an innovative technology that provides monitoring, control and analytics solutions to make office buildings more efficient and comfortable. The solution offers energy conservation and temperature/lightning control apart from a powerful data analytics tool that processes all the information and displays it in the form of real-time dashboards.
However, there is another way to look at IoT. Is it required to begin with? Whenever there is a discussion on Machine-to-Machine communications, this is a popular counter-argument. Will intrusive technology take complete control of our lives and make us lazy? Although the extent of an individual’s dependency on Internet and mobile is variable, in many ways we have already ceded much space to technology with round the clock usage of smartphones, laptops and social media. It is quite clear that if implemented efficiently, IoT can work wonders for India given the extensive burden on infrastructure and increasingly busy lifestyle of the common man. And that is why India is fast emerging as a hotbed of IoT startups nowadays like the ones listed above. Only time will tell if this is a promise that fails to realize its full potential. But possibilities of how IoT can make life easier are enormous.
Wireless telecom industry wish list for the new government in India
Recent national elections have resulted in a government change in India. The new government is considered to be business and investor friendly and many industries including telecom have come up with a wish list even before the new office-bearers can settle down. A reform friendly regime can provide a big boost to this beleaguered sector in India. The industry has faced turbulent headwinds for a while now and it is badly looking for some relief. Wireless industry stakeholders are hoping that at least some of their long standing demands would be considered soon. Telcos have many different wishes, but here are some on which there is wide-ranging agreement within the industry.
A consistent, stable and transparent regulatory environment must be the pivotal aspect of new telecom reforms. The last few years have been a royal mess. Sometimes the rules of the game were changed in the middle of the game. One doesn’t need to be an industry expert to understand that if certain norms are enforced in areas such as foreign investment, spectrum fees, taxes, license validity and spectrum auctions, then they must remain the same for at least a few years. Retroactive taxes were another terrible idea. So was the re-auctioning of 900 MHz frequencies to licensees after expiration of their 20 year permit. Inside sources reveal that telecom department bureaucrats deliberately blocked key decisions after the notorious 2G imbroglio out of the fear of future litigation. To avoid such scenarios, decision making must be swift and free of any conflicts between various government ministries like Department of Telecommunications and the independent agencies like the regulator, TRAI. The primary aim of the policy should be to ensure fair competition, financial viability of the business and smooth end-user experience. It would be great if the government can generate good revenue from any such processes, but that should be a secondary target.
Flowing from the broader topic of regulatory certainty are many other factors that could potentially put the telecom industry back on the upward trajectory. Rationalization of taxes, spectrum fees and minimization of penalties that are periodically either imposed or expected from the operators should be the top priority. Current estimates show that the industry pays more than a quarter of its revenue to the government in the form of various taxes and levies. On the other hand, their counterparts in other Asian nations pay on an average 5% tax on their revenue. License fees and spectrum usage charges alone add up to about 12% of the Adjusted Gross Revenue (AGR) in India. For an industry reeling under Rs. 2.5 trillion of cumulative debt, these charges must be reduced. If the operators are already paying more than they can afford for the spectrum, why impose an additional fee for using it? Universal Service Fund (USF) levy is among the highest globally at 5% and should be brought down too. The intended goal of this fund is to expand the reach of telecom services in rural areas, but much of this fund has been left unutilized. All these payments are on top of income taxes, sales taxes and other miscellaneous charges that every telecom company pays. Do not forget the regular penalties imposed on various telcos that often result in legal battles. If the telcos have to flourish again, any such issues should be amicably resolved. Apart from encouraging investment in the telecom market, such moves would improve the financial health of the sector. The notorious Vodafone tax case in India shows that while all investors must comply with the law, contentious issues should be resolved quickly via mutual agreement and taxes should never be imposed retroactively.
Progressive and efficient spectrum management policy is another demand from the industry. There are multiple issues that need to be addressed here. New contiguous spectrum bands that are harmonized with the corresponding bands in other countries must be identified and allocated. India’s mobile telecom services run on low spectrum. Latest technologies like LTE and LTE-Advanced require large swathes of spectrum. Thus the auction of technically efficient airwaves like 700 MHz must be fast-tracked while making sure that at least 10 MHz of airwaves are available for 3-4 telcos in every circle. Government agencies sitting on underutilized but useful spectrum must be pursued to give up this asset at a market determined price. Much of the spectrum with Indian operators is in small chunks in disparate bands. This reduces spectral efficiency and increases network investment. While a reconfiguration of already assigned frequency bands may not be practical, future spectrum allocations must offer contiguous frequencies. The second contentious spectrum issue is the spectrum trading and sharing policy. Spectrum owners should be allowed to trade their valuable asset with each other at market prices based on their requirements. Trading will help the bigger operators with congested networks to augment their service offerings and provide an option to the smaller ones to either monetize their holdings or exit the market. The past regime and regulator had broadly disapproved of spectrum sharing. But sharing frequencies leads to better utilization of airwaves and better overall service quality, since more spectrum in an area implies more bandwidth and lesser congestion. As an example, some smaller telcos that acquired 2.3 GHz airwaves four years ago are yet to launch any services. A smooth spectrum trading or sharing process would work well for them in the near future. Appropriate base price for spectrum auctions will also be critical to the future of India’s telecom sector. The government should stop treating the industry as an eternal cash cow. Right from the 3G auctions of 2010 to the latest auction of 900 MHz and 1800 MHz, the base prices were just too inflated. The government has the right to make money from such auctions. However, starting prices should be determined keeping in mind the financial state of the industry and the fact that the telecom tariffs in India are among the lowest in the world. Such high spectrum price leads to large amounts of debt on the winner’s balance sheet and mostly that cost is passed on to the customer. This is obviously not a desirable scenario.
The next item on this wish list is a clear mergers & acquisitions (M&A) policy. A long standing demand of every stakeholder in the telecom business, favorable M&A norms will facilitate market consolidation. They represent a win-win situation for everyone from the customer to the service provider. The M&A guidelines formulated a few months ago need a revision. Currently, they allow two or more entities to merge as long as their combined revenue and subscriber base does not exceed 50% in any telecom circle. Now this sounds logical but there is also a dampener in these guidelines. If the acquired company did not buy the spectrum through an auction, then the buyer must pay the market price of the seller’s spectrum to the government apart from the money it is already paying to buy the targeted company. This has acted as a major deterrent for the bigger telcos that otherwise wanted to buy out the smaller companies. Hence it is also not surprising that other than Bharti Airtel’s acquisition of Loop Mobile, no major deals have been announced in the telecom sector. The 50% rule is good for avoiding monopolies but any payout to the government other than mandatory taxes in an M&A deal are irrational. This rule must be completely withdrawn from the M&A policy. Enormous debt on books of most telecom operators in India is already hampering any potential deals. Vodafone India CEO, Marten Pieters recently mentioned that given the constraints, they would prefer spectrum trading rather than the outright purchase of a smaller competitor.
The telecom industry is also looking towards the government to push domestic manufacturing of telecom equipment and handsets. This will assist in establishing a full cycle ecosystem for the telcos as well as vendors. It will also create jobs, lower the infrastructure costs and further promote the mobile broadband technology. Since telecom is regarded as critical infrastructure, the problem of national security can also be addressed through such a policy. Whether the local manufacturers will get preferential treatment is up for discussion, but it is about time that a domestic telecom company makes good quality products in the country and exports them too.
Above are some of the most important points that are part of wireless telecom industry’s wish list for the new regime in India. None of these should be very difficult to achieve, although implementation timelines could vary. There is already some news pouring in on the telecom front since the new telecom minister took over. Various bureaucrats from the telecom department recently apprised him of the issues that the industry has been facing. He has stated that the department’s target should be to define all policies unambiguously. The telecom commission will meet next week to discuss spectrum sharing norms and also examine measures to control penalties and levies that have harmed the sector. So there is definitely reason to be hopeful. The end goal of all laws and policies from the government must be to ensure 5-6 healthy mobile service providers in India that have enough spectrum, infrastructure and financial resources in order to run a profitable telecom business. Corruption free climate that encourages investment and ensures a level playing field is the need of the hour. Debt-ridden, spectrum starved and legally entangled operators cannot run a sustainable service. On the face of it, hypercompetition and rock bottom prices look positive for the consumers, but they cannot be good in the long term. Additionally, if the fruits of high-speed fixed and mobile wireless services have to reach the common man, the government must listen carefully to industry’s demands. We will know in the next 2-3 years if at least some of these wishes are fulfilled. Beyond doubt, this is an extremely crucial period for the telecom sector in India.
This post is also available at the 4G360 website.
Link – http://4g360.com/profiles/blogs/wireless-telecom-industry-wish-list-for-the-new-government-in