The Changing face of the Telco service provider

When it all started in a developing country like India, the government had the monopoly of providing the Telecom services. I start with India and what is true for India; I take it that other developing countries would have in similar situations. It all started with the land line phones or PSTN (Public Switched Telephone Networks) in another parlance. For many decades, the unreliable, tedious and low penetration of such services was prevalent. The government decided whom to give such connections. It was not much of an aspiration of having such services by majority of the population because there was simply not much need in those days as telephony was not considered a basic need. Or it was simply too much of a task to apply and get a connection from the government agencies. 

This changed with the advent of the mobile services. Again looking at India the private sector was first allowed to start the services. The government still continued with the plain old PSTN or fixed line telephony as we know it. In India the government thought that mobile would be a premium service and did not venture into it.

The advent of mobile telephony through GSM technology saw the birth of a new breed of service providers- the private sector entering into the telephony business. The service providers are also known as Operators.  During the 1990's then there existed both type of services providers- the government and the private players. The private players mainly provided mobile voice services with a little amount of data mainly in the form of SMS (Short Message Service).

The first decade of the new millennium saw the plethora of services expanding with the increasing usage of data through CDMA (Code Division Multiple Access) technology along with GPRS and EDGE from the GSM family. This first decade in the case of India saw the government entering into the mobile space giving competition to the private operators. The right to use 4G technology by the operators came in officially in the country with the auctions taking place in 2010. Although the operators were somewhat slow in the adoption of the 4G technologies in the form of LTE (Long Term Evolution),  WiMAX was provided in a small scale by a handful of service providers.

Around the first half of the second decade, saw Wi-Fi being introduced. This technology is now made available through existing mobile service providers but now an increasingly new breed of providers started giving paid or free Wi-Fi in competition to the existing mobile service providers. We now see Google tying up with government departments like the railways to provide free Wi-Fi or a restaurant or fast food chain giving Wi-Fi in their premises to customers. The hotel industry also started giving Wi-Fi to their guests either as a paid service or including the services as part of the room tariffs. Another area of getting access to the internet can be seen in the academic space where a large university or college campuses made this access to their students and faculties. The communication and access to internet now sees more than the official mobile service players in the field. The rules of the game are different for different players. While the licensed mobile service providers have to abide by the regulations in the form of maintaining a minimum level of service for voice, the newer players or service providers although providing data along with   voice riding on top it are not subjected to the same rules. With increasing data usage the regulator has to now think of addressing the Quality of service (QoS) for data services. Can it generate pressure on the players who offer Wi-Fi services over free spectrum and have not paid money like the mobile service providers?  Some amount of regulation is being followed at least in regards to knowing the identity of the end user like knowing the IP address but in aspects like QoS, privacy and security it is still open to debate and much to wish for.

So we now have primarily the following service providers -the government through its different arms -the Public sector units (BSNL, MTNL) and the private players who have purchased spectrum and paid the license fees. Then there is the 3rd type who provides Internet services through land line or cable networks by having the Internet licenses. Then there are the types like Google, Microsoft who have started giving Wi-Fi services albeit in a small scale by tying with different government or local administrations. These can also include private or universities giving Wi-Fi services to end users although on a non chargeable basis in most cases. I have tried to include all types of providers whether the end user pays money directly to the provider or gets it for "free".

There is another type of service provider who are present in some countries in Europe and elsewhere- the MVNO (Mobile Virtual Network Providers) . These are virtual operators as the name suggest who do not purchase the spectrum from the government but procure airwaves from an existing service provider and cater to the end user by giving a bouquet of services and different tariff plans to meet the needs of niche users. India had such an operator -Virgin Mobile through its tie up with the Tata group around 2008-2011. Virgin Mobile was there for sometime but the hazy rules for MVNOs did not encourage other such operators to venture in this business.

With the proliferation of IoT (Internet of Things) and M2M (Machine to Machine), another breed of service providers will in all probability make their presence. Although we are yet to see these players, certain utility businesses in the Netherlands have procured licenses for setting up their own mobile networks. It is early days yet. Will the service providers for "things" and "machines" be different from the current lot of service providers? For one there is an estimated 7 Billion human population today. Even if we assume that every person on this planet will have two connections each it turns out to be 14 Billion subscriptions. If we consider things and machines with different types of sensors and other devices it will easily surpass the human users. Will a new type of service providers that cater to these requirements come up?   For one the existing service providers will try to evolve and cater to these new users which are no longer humans alone. These new users will in probability ask for data mainly and not go voice services like humans do. Although in the current setup devices like smart electricity meters are connected through the existing mobile networks, clearly the needs and requirements for different applications and devices will be very diverse. One may want high speed, the other might want a real time connection, and the third might need a large bandwidth and fourth only a small pipe for transmitting and receiving a little amount of data. Whatever the needs may be, the connectivity will be through wires or without wires (wireless) and somebody will need to provide these services. 

The government and regulators will also need to evolve to set out the rules for service providers and users. As the rate of technology changes, the policy maker will need to continually learn not only for the unique requirements of that region or country but actively collaborate with other policy makers and regulators.

So what changes to do we expect to see in the service provider landscape in the short and long term scenarios? For one, with much of the rules and policies in place, we can expect to see the new avatars in the shape of MVNOs.  In the longer term, once the "things “ come up and get hooked up in the net as we know it, a new breed or class of service providers might emerge.  This will further get influenced by the emerging wireless technologies like 5G and the entry of existing and newer things in the net. The net will be much more than only humans using it for information and social needs.