Time to leapfrog with digital infrastructure is now

By Dr. Anand Agarwal

India completes 25 years journey of driving mobility to possibly every nook and corner within the country; a journey that goes beyond the country by enabling connectivity with the world at large. We are now home to the world's second-largest internet user base. Twenty-five years ago less than 5% of the population had wired telephony, while now over 600 million people have access to mobile and internet connectivity. We have come a long way. Yet, this is just the start and an exciting journey awaits us, one that will be powered by the right digital infrastructure.

Circa 1995: 25 years of connecting people

We started our journey of mobility in 1995. Back then, buying a SIM card would cost over Rs 4,900, with call charges of Rs 16 for incoming and outgoing. It must have been a tough decision to make a call in those days, right? The telephony services were reserved for the rich and elite. For others, telephony services meant booking a trunk call and waiting long hours for the call to connect with their dear ones.

The telecom revolution advanced at a breakneck speed. Today, we boast about having the lowest tariff plans in the world. As the world's second-largest internet user base, India accounts for over 12% of global users. Over the past many years, devices and technologies have transformed the scale and scope of networks. From Kashmir to Kanyakumari – our mobile networks are robust and offer good connectivity.

The government, telecom operators, and service providers have played an integral part in ensuring this journey became a success story. I take pride in saying that STL has been a key player in India’s mobility journey. This year, we also complete a milestone – 25 years of designing, developing, and delivering optical fiber to our customers, connecting India and the world.

The digital divide has to be overcome

The difference in the quality of digital access between the rich and poor has emerged as a major concern limiting growth. Of the majority of the rural population, i.e. around two-third of Indians, only about 25% have access to reliable internet connectivity. Fortunately, urban Indians have much better access though the quality of the Internet still lags as current broadband and FTTX connectivity is behind developed economies.

The government has an important role in building digital infrastructure. It needs to collaborate with private players to ensure the time-bound roll out.

Recently, COVID-19 has awakened the nation to the need for internet connectivity. It has become an essential service like education, utility, and power. A massive range of services has gone digital – education, governance, banking, and entertainment. The current situation has shown the importance of robust and high-speed digital infrastructure across wired and wireline applications.

This overwhelming shift has highlighted the impact of the digital divide in the country. There is an immediate need to invest in digital infrastructure – fiber-based tower backhaul, localized data centers, and fiber-to-the-home (FTTH) and enterprise along with rural broadband connectivity.

Time to invest in digital infrastructure

Realizing the need for strong digital infrastructure, digital service providers globally have accelerated their digital infrastructure investments. Governments, telecom companies, cloud companies, enterprises, and private players are investing billions of dollars to leverage the opportunities that come with it. Increasingly, they are investing in FTTH network build-outs and rural broadband connectivity.

China, Japan, Germany, and the US are the largest economies in the world, each with a GDP of more than USD four trillion. India is the fifth-largest economy with a GDP of USD 2.94 trillion. While the top four economies are investing 1-2% of GDP each year on digital infrastructure, India is investing at a much lower rate. As the ongoing pandemic has exposed the importance of high-quality digital infrastructure, it is obvious that the investments for it are necessary now. Subsequently, our economy will grow exponentially with the right digital infrastructure – one that spans across urban and rural India.

India needs to invest in fiber-based tower backhaul, localized data centers and fiber-to-the-home and enterprise along with rural broadband connectivity.

Digital infrastructure will enable schools and healthcare infrastructure to be more efficient and save critical investments for the government. It will generate 60-65 million jobs over the next five years, and help India become Aatmanirbhar in the true sense. Digital infrastructure can be a springboard for India to leverage Make in India, increase economic activity, and realize the USD 5-trillion-economy vision at an accelerated pace.

Our government can lead an ecosystem to make India leapfrog

Digital infrastructure development requires a scale of investment that private players simply cannot achieve alone. The government has an important role in building India’s digital infrastructure. It needs to collaborate with private players to ensure the time-bound creation of digital infrastructure.

In the immediate term, the government can take the following steps towards digital infrastructure investments:

• Unlocking WiFi-6 spectrum for free can help telecom operators, private networks, cloud companies, and new players drive the creation of new WiFi and LTE/5G networks. This will drive job creation across the digital infrastructure ecosystem. The overall growth impact of GDP will be much larger than the amount realizable by monetizing spectrum licensing in the next 2-3 years.
• Digital infrastructure can give 2-3x faster returns compared to physical infrastructure so some funds from infrastructure projects such as road, transport, power, railways, and petroleum can be reallocated to strengthen our digital infrastructure.
• A central government-led “Broadband Infra Fund” can be set to finance digital infrastructure investment and financing options for the fund could be explored with multilateral agencies and international banks.

I believe that a good implementation approach can be found by looking at global best practices. For instance, in Australia, NBN took the region-first approach, while in Nordic countries the business-first approach was deployed. For India, I recommend a hybrid of the two models. We can plan an initial rollout for 1-2 states, depending on its population density, topography, ease-of-deployment, and economic potential of broadband. This can be followed by districts with a higher per capita income and greater potential to benefit economically from broadband. Starting with these higher potential regions will result in early revenue generation that can be re-invested for network rollout expansion within the country.

Now is the opportunity of a lifetime for us – to leapfrog and lead the way as the shift to digital is permanent. We are blessed with the world’s largest democracy and with access to the Internet - we are poised to become a global technology powerhouse.

The author Dr. Anand Agarwal is Group CEO of STL

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