Digital Infrastructure Services – Trends That Matter!

Many trends will shape the future of India’s digital infrastructure and services industry. Here are my picks that will have a significant

The digital eco-system is critical for India’s long-term and equitable socio-economic growth, as well as its goal of becoming a developed nation by 2047.

Important enablers of the country’s overarching Digital India program, such as the Department of Telecommunications (“DOT”), government bodies, mobile network operators (“MNOs”), Internet Service Providers (“ISPs”), handset makers, big tech companies, and successful and promising start-ups, deserve the recognition and attention they are receiving. However, despite being crucial bedrock for the Program’s success, the less glamorous Digital Infrastructure (“DI”) industry inadvertently misses the spotlight.

This sector too, is amid an exciting transformation all over the world and in India and will have a defining role to play building India’s digital future.

Many trends will shape the future of India’s digital infrastructure and services industry. Here are my picks that will have a significant, and in many cases disruptive, impact on all infrastructure, system integration, and managed service providers. Each one will write its success story based on the response they choose to have for each of them.

The Defining Drift

Business models will be recrafted

The legacy commercial model, built around the troika of passive infra hosting, tenancy ratio, and site & energy management services will have to be reinvented.

With increasing criticality and dependence, customers will expect greater accountability, control, and visibility into network performance, security, and quality.

Unless solved through disruptive business models and legislative mandates, ubiquitous, high-quality 4G and 5G based indoor coverage will remain a pipe dream and a multi-faceted commercial challenge on the ground.

The DI firms will create disproportionate shareholder value by implementing innovative models and layering newer planning, deployment, operations, and management support services across a tech-agnostic access infrastructure network.

In the foreseeable future, meta-verse applications like extreme gaming, AR/VR etc., will drive Wi-Fi NAAS as much as 5G and Private-LTE growth.

Densified outdoors, and low latency indoors will define the next wave of the Digital Infrastructure investments

Notwithstanding the technology used, latency KPIs (Key Performance Indicators) will become increasingly important.

Policy reforms, and regulatory winds will continue to help improve the economics of Digital Infrastructure

More specifically for the DIs, frameworks will eventually appear that will:

• Diminish the “rent-seeking” power of ROW authorities and venue owners, and normalise building neutral-host, indoor digital infrastructure as a prerequisite for the go-live of any real-estate project

• Sharing of infrastructure including active sharing will be further encouraged through policy nudge

While granting right-of-way (“ROW”) for mobile infrastructure, a sizable number of owners of important and premium indoor and dense outdoor real-estate, will have to shift from a “rent-seeker” mindset to that of a “service-enabling-stakeholder”. Their reduced bargaining power, consumer and tenant pressure, and government mandates will bring about (or will ensure) this transformation.

The government and the DOT have already taken significant steps, such as setting up the Gati Shakti Sanchar Portal and amending the Indian Telegraph ROW Rules 2016. They are also developing frameworks to ensure mandatory digital connectivity in buildings and the widespread use of street furniture in 5G deployment. The DOT is also looking into ways to encourage infrastructure sharing among operators, possibly through a modified license regime, by broadening the scope of the IP-1 registration. Collectively, these efforts along with some promising technology and commercial breakthroughs in the Original Equipment Manufacturers (“OEM”) world, will significantly improve the efficiency as well as economics of digital infrastructure deployment, in general, and indoor and dense-outdoor infrastructure deployment in particular.

The tilt towards use-case, applications, and Quality of Service (“QOS”) focused offerings will increase.

With increasing criticality and dependence, customers will expect greater accountability, control, and visibility into network performance, security, and quality.

There will be greater support for “As-A-Service” models in general

There are four big reasons for this – Cost, Complexity, Control, and Competence.

Wireless gigabit backhaul technologies as well as Fixed Wireless Access (“FWA”) will become mature, widespread

This will create new opportunities and adjacencies for DI companies.

DI companies of tomorrow will have the engineering smarts.

They will understand infrastructure and service delivery imperatives of Cloud, Edge, IOT (Internet of Things), AI/ML, and Analytics-based hardware and software solutions. They will also master skills to deploy support and manage deployments and operations with varying mix and degree of latency, speed, capacity, security, and reliability thresholds.

The emergent heterogeneous, unified, multi-use, and more mission-critical network deployments will need sharing and ownership of a broader set of responsibilities, skill sets, and capabilities, with commensurate revenue upsides for everyone in the delivery value chain.

Low Powered Small Cells (“LPSC”) will gain traction for indoor coverage and capacity, with vastly improved economics.

As a corollary, traditional passive and hybrid IBS-DAS models will gradually become more niche and cede some space to LPSCs, while also competing with Multi-Operator RAN (Radio Access Network) deployments.

Wi-Fi Network as a Service (“NAAS”) will continue to find favour and grow due to rapid advancements in Wi-Fi standards, potential increase in unlicensed spectrum capacity (6 GHz band in line with global regulatory trends), and growing number of indoor low latency uses

In the foreseeable future, meta-verse applications like extreme gaming, AR/VR etc., will drive Wi-Fi NAAS as much as 5G and Private-LTE growth. This will be due to relative economic benefits in many non-critical use cases, rapid improvements in the standards and feature sets, and the fast-maturing Open Wi-Fi eco-system.

Conclusion

India aims to leapfrog into the thought leadership space in all-things-digital and the aspirations are backed with its success in the recent past and potential that lies ahead. For this, the industry must ensure that its infrastructure and services are ready to support modern technologies, novel services, and new business models.

This will now need a generational shift in thinking, disruptive interventions, and absolute clarity in the minds of all stakeholders including the DOT about how future digital infrastructure services should be upgraded or created; packaged and bundled; delivered and managed. At-scale. And at terrific value for the customer.

PS: I am time-stamping this article. Let’s review it again in four to six quarters from now!

By Raj Sethia

Raj Sethia founded and currently leads FireFly Networks Limited.

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