The vision for the New Telecom Policy (NTP) is being disseminated even as the draft is being composed. The NTP aims to increase the information and communication technology (ICT) sector’s contribution to GDP from 7.8 per cent to 11 per cent by 2030, and attract Rs 1.5 trillion annually in telecom infrastructure investment. It also aims to double telecom exports (including services) by moving up the chain to high-value products. Moreover, the NTP will promote 100 per cent 4G and 90 per cent 5G coverage, universal fiberisation (fibre to cover 100 million households, along with a million public Wi-Fi hotspots) and satellite-terrestrial integration. It has also set a goal for the sector to generate employment (direct and indirect) for 1 million more individuals by 2030. All this is unexceptionable, and it is good to aim high. But are these aims substantially achievable? What are the hurdles and challenges?
Doubling exports (including services) will involve upskilling. The production-linked incentive scheme generates around Rs 800 billion in telecom-related products, and Rs 150 billion in exports. The value addition is low, given the high import content. Huge investments will be required for further localisation, as well as a lot of R&D to develop globally competitive products and services.
The government is targeting an R&D spending of Rs 10 billion per year – compared to Rs 4 billion in financial year 2026 – to support research in 5G/6G, quantum, blockchains, satellite communications, etc. There is a plan to establish 10 centres for R&D and commercialisation of new technologies. This may not be enough. The NTP must find ways to encourage private enterprise to invest much more in R&D, whether through tax breaks or other incentives.
Saturation coverage of 4G, 5G and fibre seems physically achievable, given the speed at which Jio and Airtel rolled out their respective 5G and fibre networks. Satellite broadband via Starlink, Amazon Kuiper, Eutelsat OneWeb, Jio-SES, etc., and satellite-terrestrial integration will address terrain-specific issues. BharatNet is supposed to deliver fibre connectivity to all panchayats, but BSNL’s underperformance makes this a big question-mark.
Spotty rural connectivity is a function of low incomes and uneven digital literacy. It is hard to develop commercial models and generate acceptable return on capital employed in rural areas. Plus, there are last-mile challenges, spectrum pricing issues and right of way hurdles. Substantial capital investment will be required, which will not be available unless returns are visible. Can the NTP “think outside the box” to develop a commercial model that works in the hinterland?
Generating employment is obviously desirable. Secure, reliable broadband has great positive externalities and will open up new opportunities, create new revenue streams and enable start-ups. The government proposes to promote 1,000 telecom start-ups in the new NTP. Two funds – the Telecom Software Development Fund and the Sovereign Patent Fund – will help in creating a patent pool.
But new technologies such as AI, 5G and 6G reduce labour intensity, especially at the lower end of the chain. Combating this will mean skilling labour to exploit opportunities in programming, solutions, data analytics, semiconductor design, etc. This challenge extends beyond the telecom sector, and requires a review and rebooting of the technical education ecosystem.
The vision for the NTP is rightly ambitious and clearly articulated. But achieving its aims will require smart policy formulation to address many issues and challenges. The quality of execution will determine success.
