India is set to experience the fastest growth in smartphone adoption, internet use, over-the-top subscriptions and social media engagement over the coming years, driven by the 5G roll-out, generative artificial intelligence (AI) and internet of things (IoT) applications. The digital infrastructure, comprising telecom towers, optical fibre cables, base transceiver stations, small cells, street furniture, subsea cables and data centres, is playing a crucial role in the country’s transition to a digital economy.
The launch of the new Telecommunications Act, 2023, is a big step forward towards the growth of digital infrastructure in India. The act has designated telecom infrastructure as “critical”, prioritising network security and directing penalty impositions in cases of damage. The act also provisions the streamlining of right-of-way (RoW) rules, removing multiple levies, capping of charges, facilitating deemed approvals and managing telecom infrastructure installations on private property.
Booming data centre industry
India’s data centre industry is set to witness substantial growth from 2024 to 2026. As per JLL, the demand is expected to reach 650-800 MW, with projected investments of $5.7 billion by 2026. Expanding the reach of AI will fuel this demand. Edge data centres are also gaining traction, localising access to advanced IT infrastructure for smaller towns and cities. A report by the Internet and Mobile Association of India highlights that by 2025, 56 per cent of new internet users will come from rural areas. Edge infrastructure will be crucial to provide low-latency and high-bandwidth connectivity to such areas. Moreover, on the enterprise side, 5G edge computing is expected to open new opportunities.
OFC as the backbone of digital economy
Several factors are fuelling the growth of OFC in India. In 2023, the demand for OFC reached approximately 31 million fibre km (fkm). The country currently requires around 2 fkm of OFC per person, amounting to a total need of 2.8 billion fkm. A robust OFC infrastructure is crucial to support the expansion of 5G networks across the country.
Government initiatives and regulatory support, such as the National Broadband Mission, the Indian Telegraph Right of Way (Amendment) Rules, 2022, Gati Shakti Sanchar, and the PM Gati Shakti – National Master Plan (NMP), are accelerating digital access. The government’s flagship BharatNet project has made considerable progress over the years. So far, approximately 0.68 million km of OFC has been laid since July 2024, with 1,056,968 fibre-to-the-home (FTTH) connections commissioned. Additionally, 91,541.58 km of dark fibre has been installed under the project. Efforts by the National Highways Authority of India to lay OFC alongside highways, as well as the development of modernised signalling systems by Indian Railways, will also boost OFC demand.
The rise of street furniture
The recently released draft RoW rules define street furniture as any post or pole used for electricity, street lights, traffic lights, traffic signs, bus stops, taxi stands, public lavatories or utility poles. According to the NMP (PM Gati Shakti), India has approximately 26.5 MUs of street furniture, presenting vast untapped potential for digital infrastructure deployment. Street furniture is ideal for hosting small cell deployments essential for 5G network densification. Smart poles are also being used to improve public safety, enhance traffic management and provide access to communications services such as Wi-Fi and 5G.
Solving network challenges with SD-WAN
Software-defined wide area network (SD-WAN) offers intelligent data traffic management and high availability by enabling dynamic rerouting of traffic, prioritising critical applications and optimising network performance. Its centralised control allows for quick configuration changes, adapting to changing network conditions. Given the host of network challenges faced by Indian players, SD-WAN is emerging as a key solution. A report by Gartner estimated that the SD-WAN market in India will reach $321.3 million by 2025.
Expanding undersea networks
Submarine cables are vital for supporting next-generation networks, advancements in 5G, AI, cloud-based services and the growing IoT landscape. India’s strategic location positions it as a crucial hub for undersea cables, connecting countries across Europe, East Asia, Southeast Asia and West Asia. Recognising this potential, the government has initiated several projects in the submarine cable segment, with two recent developments being the launch of the Chennai-Andaman & Nicobar Islands (CANI) and Kochi-Lakshadweep Islands (KLI) submarine OFC projects. The CANI OFC project, commissioned in 2020, involved laying submarine cables from Chennai to Port Blair and extending to seven other islands, reaching about 85 per cent of the Andaman & Nicobar Islands’ population. This initiative has significantly boosted internet speeds from 100 kbps to up to 300 Mbps, while mobile connections have grown from 470,000 to around 700,000 in the region. Meanwhile, the KLI submarine OFC project, launched in January 2024, connects the mainland to all inhabited islands of Lakshadweep through submarine cables. The project is designed to deliver speeds of up to 100 Gbps and supports 4G and 5G networks. To date, 3,972 FTTH connections have been established through this network.
