India's lack of fiber affects mobile internet quality

A recent survey by LocalCircles, a popular social media company in India, says that two in three Indian consumers of digital payments experience one or more monthly disruptions in transactions because of substandard 3G or 4G network quality. More worrisome is that more than nine out of 10 mobile phone users in India complained of poor wireless connectivity, as per the same survey.

“These findings are significant because they indicate that not only the mobile data services that are being delivered to consumers are deficient, but as a result of this, India is not seizing its full potential on digital payments. India did a total of 35 billion digital transactions in 2021, and if network issues are fixed the number of digital transactions could go up significantly,” says the LocalCircles report.

The survey findings highlight a massive gap in the services delivered by the Indian service providers and consumer aspirations. While India’s internet base continues to grow, the customer experience leaves a lot to be desired. India had around 830 million internet users at the end of 2021. Call drops, poor indoor experience and inferior internet quality are the usual problems faced by Indian consumers on a daily basis.

The inferior quality is all the more glaring now because after the outbreak of the COVID-19 pandemic there is a growing dependency on the digital infrastructure for several activities, including banking, online learning and shopping, apart from being in touch with family and friends. The LocalCircles survey says that 62% of 3G/4G customers are using digital platforms to make one or more payment transactions every month.

Lack of fiber

A key reason for these sorry statistics is that the Indian service providers have primarily focused on adding more subscribers at the cost of the quality. While this has helped make the connectivity accessible to all sections of society, this has been at the cost of quality.

Another reason for poor customer experience is that the service providers have focused on urban areas but the number of consumers, as well as the usage, grew in tier-2 and tier-3 cities during the pandemic leading to a drop in quality.

Further, the low paying capacity of the end-users coupled with intense competition has ensured that prices remain low. Any network disruption, small or big, impacts productivity and efficiency and prevents people from realizing their potential in the growing digital economy.

The lack of focus on quality is reflected in the low optical fiber based networks in the country. India just has an optical fiber network of around 2,800,000 km. However, National Broadband Mission has set a target of 50 lakh km (which means multiply 50 x 100,000) by 2024. Backhaul is another issue that the Indian networks need to resolve. India has around 23 lakh mobile base stations but only 30-40% are fiberized.

Time to move away from a low rates regime?

There is a strong need for the Indian telecom industry to move away from low-price mode so it is able to provide a quality communications network to the users. The telcos have started taking initiatives in this direction with all the private telcos, including Reliance Jio, Bharti Airtel and Vodafone Idea, hiking rates last November. This hike was after a gap of two years.

The data consumption is continuously growing making it imperative for the industry to move away from subscriber acquisition to providing a quality experience to the existing users. By 2025, total data traffic in India will grow to 21 Exabytes per month. Now, consumers demand faster speeds, lower latency and greater bandwidth, driving the need to establish fiber-dense networks.

Further, India has an average age of just 28 years, and the young demographic of the country is not ready to compromise on the reliability of the networks and the digital experience. This segment is also ready to pay more for quality services. Besides, several 5G use cases like Augmented Reality (AR), and Virtual Reality (VR), online gaming, and immersive education are targeted at this segment.

While the Indian service providers have done an exceptional job to ensure connectivity during the pandemic, it is now time to change strategy to focus on quality to not just prevent churn but also to grow their revenue.