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Tata Communications Plans to Invest US$100 Million in IoT |
NEWS |
On the November 3, 2017, Tata Communications Ltd announced plans to invest US$100 million in IoT over the next three years. This follows an earlier announcement from Tata Communications in March to deploy over 10,000 Kerlink Wirnet iBTS compact gateways in tier 1,2,3 and 4 Indian cities, following the successful pilot study of LoRaWAN from June 2016 in three major Indian cities.
Near-Term IoT Opportunities in India |
IMPACT |
The Tata Group is one of India’s largest conglomerates, with over 100 independent companies employing 700 thousand people with revenues of around US$100 billion in 2017. One of the 30 publicly listed enterprises of the Tata group, Tata Communications, is a global provider of telecommunication solutions and services to enterprise customers and service providers in 38 countries worldwide. According to Tata Communications, LoRaWAN IoT network is commercially available in 38 cities today and expects to expand its nationwide coverage to include 100% population coverage and 90% geographical coverage by the end of 2018.
Tata Communications is most likely to witness the most traction in the following vertical markets:
Furthermore, In February 2017, HP and Tata Communications had also announced their collaboration to deploy some IoT applications such as smart buildings, fleet management, and healthcare using HP’s Universal IoT platform which leverages oneM2M interoperability standard. Although most of the above-listed use-cases are currently in various stages of proof-of-concept, they are expected to scale in the next 12-18 months with broader network footprint.
Competitive Telco Environment to Drive IoT Market in India |
COMMENTARY |
In India, Tata Communications competes with Bharti Airtel, BSNL, Vodafone, and Reliance Jio, a new entrant and disrupter in the telco ecosystem. Tata Communications claims to have around one-third of the market share in the enterprise business, and its IoT business will leverage its existing strengths by focusing on the b2b market. Vodafone and Airtel are more focused on the enterprise market; whereas Reliance Jio is likely to focus initially on the B2C market. The smart grid modernization effort in India is still in preliminary stages, and Vodafone is the only telco in India to participate in a pilot project in the Northern state of Himachal Pradesh. Energy Efficiency Services Limited (EESL) recently floated a tender to acquire 5 million smart meters from Infrastructure engineering company Larsen and Toubro, who recently won the bid to supply 2.5 million smart meters at US$42 per unit. Similarly, The Government of India has allocated US$20 billion to develop 60 smart cities. As of 3Q 2017, out of the total 731 use-case projects approved, 49 projects are being implemented and only 24 projects have been completed. There’s growing consensus in the industry about the sluggish growth and delays across many flagship government projects focused on digital transformation.
Reliance Jio has been a disrupter in the Indian telecommunication industry, witnessing exponential growth with over 100 million broadband and VoLTE customers within six months of its launch. Although Reliance Jio has not deployed a cellular LPWA network technology yet, it could quickly roll-out CAT-M or NB-IoT through a software upgrade with its advanced LTE infrastructure. As Indian telcos witness drastic shifts in revenue streams from voice to data, connected, IoT devices will contribute substantially to telco revenues. ABI research estimates, IoT in India by the end of 2022 will generate revenue more than US$5.2 billion across the value chain.