Ericsson expects network densification to drive next phase of growth in India

Swedish telecom gear maker Ericsson expects its next phase of growth in India will be driven by network densification due to the rising data consumption appetite of end users in the country, a senior company official has said.

Ericsson's managing director for India and head of networks for market area South East Asia, Oceania and India, Nitin Bansal told PTI that there is significant potential for growth in fixed wireless access in India, and it will soon surpass the number of deployments in the US.

"The next phase of growth is focused on meeting increasing traffic requirements, primarily through network densification to enhance network utilisation. Network densification will occur due to increased network utilisation," he said.

Ericsson estimates that the data traffic in India will grow from 29 GB per smartphone user per month to 68 GB per smartphone user per month by 2029. "If the trend continues, then service providers will densify the network to enhance the experience of users," Bansal said.

After registering a record jump in business from India on account of a speedy 5G rollout in the second half of 2022 and early 2023, telecom gear makers, including Ericsson, have seen a slowing down of business.

Ericsson reported a 44 per cent year-on-year decline in business for the third quarter of September 2024 in Southeast Asia, Oceania and India region. "Even though 5G demand may have tapered down, there are still opportunities in 4G and 5G services, particularly as the company looks to expand its aggressive approach in the market.

The business is cyclic - with data consumption expected to grow from 29 GB to 68 GB by 2029, there will be a need for capacity enhancements across networks," Bansal said.

Recently, Vodafone Idea (VIL) announced a Rs 30,000 crore capex programme for building 4G and 5G capacity across 17 circles in India. It has selected Ericsson, Nokia and Samsung for the contract.

The company has awarded two new telecom circles to Ericsson under the contract. VIL has also awarded a portion of the network, managed by Chinese players, in the other two circles to Ericsson.

With the fresh awards, Ericsson will now manage telecom networks for 10 out of 17 active circles of VIL. Bansal said that besides network build-out and densification, Ericsson is optimistic about the business growth in India by focusing on network development and network APIs.

He said the Application Programming Interfaces (APIs) project will see the involvement of startups that will develop technologies and platforms to enhance telecom network usage.

"The recent announcement about all leading operators, including Jio and Bharti Airtel, joining a new venture to combine and sell network Application Programming Interfaces (APIs) on a global scale to spur innovation in digital services is seen as a potential game changer. Exposing network APIs to startups is expected to drive network usage significantly," he said.

Bansal said startups are seen as critical to leveraging network APIs, which could enhance network usage and create new business opportunities. "Interest from startups is increasing, particularly for enterprise solutions," he added.

Talking about the demand for artificial intelligence technology in the telecom sector, Bansal said telecom operators are primarily looking for AI solutions that enhance efficiency and performance in their networks.

"The focus is on passive network management and improvements and other applications of AI. There are efforts to embed neuromorphic technology to significantly reduce power consumption.