Annexure I to the Boards Report
A. INDUSTRY BACKGROUND
As per the reports of India Brand Equity Foundation, India is currently the worlds
second-largest telecommunications market and has registered strong growth in the past
decade and half. The Indian mobile economy is growing rapidly and is expected to
contribute substantially to Indias Gross Domestic Product (GDP). The liberal and
reformist policies of the Government of India have been instrumental along with strong
consumer demand in the rapid growth in the Indian telecom sector. The government has
enabled easy market access to telecom equipment and a fair and proactive regulatory
framework that has ensured availability of telecom services to consumer at affordable
prices. The deregulation of Foreign Direct Investment (FDI) norms has made the sector one
of the fastest growing and a top five employment opportunity generator in the country.
B. INDUSTRY OUTLOOK
Five key trends shaping the telecom landscape:
In the year ahead, telecommunications companies will be focused on delivering advanced
connectivity and higher performance to customers while reinforcing value and
competitiveness. Five trends shaping telecom industry growth and business strategy, from
5G monetization to edge computing to an increasing focus on sustainability.
Preparing for a strong, resilient future:
Telecom industry growth continues to be driven by the continued importance of
connectivity, bringing both opportunities and challenges for communications service
providers (CSPs). This years telecom outlook explores how CSPs are delivering value to
consumer and enterprise customers with bundled services and connectivity options like 5G
fixed wireless access (FWA) and fiber, as well as their role in meeting the growing demand
for edge computing. Well also consider how CSPs may want to balance pricing decisions
with the need to accelerate deployment of infrastructure like fiber networks, while
attending to the growing urgency to reduce resources, waste, and emissions from network
operations, upgrades, and deployments. As connectivity works its way into more of the
world, it may be more imperative than ever to balance costs with the needs of households,
businesses, communities, and the environment.
Some of the specific themes playing a critical role in 2023 and beyond include the
following:
The bundle battle: Add more value for cost-conscious consumers. For individuals and
families, connectivity is important. Yet, consumers often have cost constraints that can
limit their options or drive them to seek the best service at the lowest price. To offer
more value to consumers, many CSPs are bundling mobile and home internet access, offering
connectivity options like fiber and 5G FWA, and partnering with entertainment services to
include subsidized or free subscriptions.
Fixed wireless access surges, but will it endure? As part of this “bundle
battle,” 5G FWA has enjoyed substantial growth. This type of connectivity can provide
strong reliability, but some questions remain about how much it can scale. As more people
use 5G services, and if more bandwidth-intensive “killer apps” emerge, the
limits of 5G FWA could be exposed.
However, market dynamics and next-gen technology solutions could overcome these
challenges. What enterprises want from 5G edge. For enterprise customers, the need to cut
costs, automate capabilities, and support innovation is driving interest and adoption of
edge computing. CSPs will likely need partners to develop and deploy edge solutions,
requiring more cooperation with erstwhile competitors.
Joint ventures accelerate deployment of fibre networks. Many of the connectivity
solutions we cover rely on fibre networks. With high demand, strong competition, and the
need to optimize costs and risk, more CSPs are partnering with private investors to
accelerate deployment of fibre networks. Increase the focus on sustainability. In doing
so, these partnerships can support existing customers while extending further into
underserved communities, helping to narrow the digital divide the gap between those who
have access to modern information and communication technologies and those who dont. This
aspect tugs at the broader economic imperative of connectivity: more bandwidth, more
equally distributed, enabling greater access to education and opportunity.
C. OPPORTUNITIES AND THREATS
After a turbulent few years, telecommunications leaders are looking toward challenges
and opportunities that lie ahead. During the panel, industry leaders tackled supply
issues, inflation, and security, and what telecommunications companies can do and offer to
offset increased costs and uncertainty. While this panel of telecommunications experts
focused on the challenges to come, weve reframed the topic to identify three
opportunities these challenges present.
1. The opportunity to be financially and digitally agile: Since the pandemic, supply
chain struggles have been a hot topic. Supply chain concerns seem to touch every industry
from food service to logistics to, yes, telecommunications. Similarly, inflation partially
brought on by and intrinsically linked to supply chain challenges is a ubiquitous,
cross-industry issue. Supply, demand, and pricing fluctuations over the past few years
have hurt businesses and created general economic uncertainty.
As a result of these challenges, companies struggle with missed delivery dates, the
inability to run projects on predetermined timelines, and the need to set expectations
around costs and timelines with customers before losing their business. At the same time,
telcos face pressures between margins and topline costs as prices for equipment, labor,
and materials skyrocket. All the while, the impending recession causes companies to
reconsider their budgets. As budgets tighten across the board, business buyers and
consumers seek cheaper alternatives, putting further pressure on telcos budgets and cost
structures. Companies that emerge from the other end of the upcoming recession stronger
than before will address financial instability by assessing risk versus value when
budgeting, digitizing wherever possible, and keeping laser focused on customer experience.
In todays rapidly changing, digital-first age, financial and digital agility go
hand-in-hand. Digitization efforts can cut costs in the long run as networks become more
efficient, manual labor is automated, and security measures strengthen. Digitization can
take the form of migration to the Cloud, adoption of next-generation technologies like
artificial intelligence, automating internal processes, or embracing edge networking to
name a few.
Although these digitization efforts themselves often go unnoticed by the end user,
these efforts ultimately trickle down into a better customer experience by improving
application performance, mitigating network and business disruptions, and bolstering
on-time delivery.
2. Up-leveling services with managed offerings: A downturned economy means that
companies everywhere are considering which telco providers they work with and where they
get value for their money. However, theres good news for telcos that offer managed
services. One estimate suggests that IT spending on managed services will rise by 18% in
2023. The fact is, smaller and mid-sized companies may not have the IT budgets or the
expertise on their teams to operate like enterprises with bigger budgets and larger, more
experienced teams. Perhaps they dont have the skills in-house to configure and manage
their network. Plus, in an era of increasingly complex cyber-attacks, security is a
concern. Without dedicated security staff, a company and its network could be vulnerable
to attacks. These companies limited IT resources are incredibly valuable, and they dont
want to waste their IT teams time with tasks that could be outsourced or automated. In
addition, remote work and the migration to the Cloud have skyrocketed in the past year,
creating more dispersed networks, and adding a layer of complexity and insecurity.
3. Increasing automation efforts for greater efficiency and cost savings: As both
enterprises and telecommunications companies cut costs and search for process
optimizations to save time, technology can fill the gaps. Automation is one such
technology that can help offset costs, save time on manual processes, and supplement human
labor ultimately lending to up-leveled offerings and increased customer satisfaction.
Rules-based automation has long been an integral part of the networking process.
However, forward-thinking telecommunications companies are now adding machine
learning-supported automation to the mix now. Machine learning can help predict network
traffic, generate real-time dashboards, and monitor network security, to name just a few
applications of the technology. There are opportunities to improve both network operations
and service operations with automation. Telcos can use automation to perform network
maintenance and optimization, anomaly detection, and continuous integration/continuous
delivery (CI/CD). Service operations automation includes customer and partner management,
automating manual tasks, service provisioning, and assurance. All of these optimizations
lead to more efficient, more accurate processes. The aspirational end goal for
telecommunications is fully autonomous systems able to learn and improve without any human
intervention. However, most telecommunications companies are a far cry from this reality.
Less than 10% of the surveyed telco leaders from a study by STL Partners reported being
fully autonomous within a single function in network or service operations. Still, the
same survey found that telcos could save almost six percent of their annual revenues if
they choose to undertake automation efforts.
This technology will undoubtedly transform the telecommunications industry and others
as more teams undergo digital transformation and it becomes more prevalent.
RISKS FOR TELECOMMUNICATIONS IN 2023
1. Insufficient response to customers during the cost-of-living crisis
2. Underestimating changing imperatives in security and trust
3. Failure to improve workforce culture and ways of working
4. Inability to accelerate efficiencies through digitization
5. Failure to ensure infrastructure resilience and reach
6. Inability to adapt to changing regulatory landscape
D. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Internal control systems are aimed at promoting operational efficiencies while
stressing adherences to policies. The systems are designed with adequate internal controls
commensurate size and nature of operations. Transactions are executed in accordance with
the company policies. Assets are safeguarded and deployed in accordance with the Companys
Policies.
The Company has in place adequate internal financial controls with reference to
financial statements. Periodic audits are undertaken on a continuous basis covering all
the operations i.e., manufacturing, sales & distribution, marketing, finance, etc.
Reports of internal audits are reviewed by management from time to time and desired
actions are initiated to strengthen the control and effectiveness of the system.
E. MATERIAL DEVELOPMENTS IN HUMAN RESOURCES/INDUSTRIAL RELATIONS
The Company is able to retain the experienced staff, in spite of the copper consuming
Industries are under recession, the Company feels confident of keeping its manpower costs
to below industry norms. The atmosphere that is created in the organization is conducive
for self-development and career growth; this is the success in retaining our manpower.
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