Beyond Towers: The evolution of digital infracos

India’s digital transformation has reached an inflection point. What began with telecommunications towers dotting the landscape has evolved into a sophisticated ecosystem of interconnected digital infrastructure. The country’s telecom infrastructure segment, once measured purely in tower heights and coverage maps, is now being redefined by data centres, edge computing facilities, intelligent networks and electric vehicle (EV) charging infrastructure that power the nation’s trillion-dollar digital economy ambitions.

The numbers tell a compelling story. India’s digital activity currently contributes approximately 10 per cent to its GDP and is projected to reach 20 per cent by the end of 2026, according to the Reserve Bank of India. With over a billion internet users achieving 70 per cent penetration, Indians consume an average of 36 GB of data per smartphone monthly- among the highest globally. Unified Payments Interface transactions surged from 172 billion in 2024 to 228 billion in 2025, marking a 32 per cent growth and crossing 625 million daily transactions, worth Rs 300 trillion. This is not just growth; it is a fundamental restructuring of how India operates.

From towers to total digital infrastructure

Traditional telecom infrastructure laid the groundwork. Today, India boasts over 0.846 million towers and 3.172 million base transceiver stations (BTSs). In 2025 alone, 0.508 million 5G BTSs were deployed, bringing 5G services to 99.9 per cent of districts and 85 per cent of the population. Optical fibre networks expanded from 1.935 million route km (rkm) in 2019 to 4.236 million rkm, while 214,843 gram panchayats gained broadband connectivity. Teledensity reached 86.65 per cent, with rural connections growing 42.9 per cent since 2014 – nearly double the urban pace.

But the towers were just the beginning. The emergence of cloud computing, artificial intelligence (AI), internet of things (IoT) and 5G-enabled services has created unprecedented demand for computational power and data storage at scale. India’s data centre capacity more than doubled in 2025, adding 387 MW of IT capacity, a 103 per cent year-on-year jump – bringing the total operational capacity to approximately 1,520 MW. Industry projections suggest this will reach 4 GW by 2030.

The rise of hyperscale and edge computing

The digital infrastructure landscape now encompasses two complementary pillars: hyperscale data centres and edge computing facilities. Hyperscale data centres, which are massive centralised facilities optimised for efficiency and scalability, power cloud services, big data processing and AI workloads at an enormous scale. Currently, India has over 120 data centres with an operational capacity of 1,280 MW. Maharashtra leads in this space with approximately 59 data centres, followed by Tamil Nadu and Karnataka. Mumbai and Chennai account for nearly 70 per cent of total data centre absorption in 2025. Global technology giants and domestic players committed over $30 billion in investments between 2020 and 2025.

Simultaneously, edge computing is bringing computation closer to users. Edge data centres, which are smaller facilities strategically located near end users in Tier II and Tier III cities, reduce latency for applications requiring real-time processing. Consider the practical impact: when someone in Lucknow makes a WhatsApp call, their data would traditionally travel
thousands of kilometres to Mumbai or Delhi servers before connecting. Edge infrastructure eliminates this inefficiency,
crucial for applications such as telemedicine, autonomous vehicles, smart city management and immersive gaming experiences.

Edge data centre capacity is expected to grow from approximately 70 MW in 2025 to 300-400 MW by 2030, driven by 5G roll-out and the proliferation of IoT devices generating massive data volumes that require local processing.

Expanding infrastructure horizons

The digital infrastructure company (infraco) model now extends beyond traditional boundaries into satellite earth stations, EV charging networks and smart city command centres. India is transitioning from geostationary earth orbit to low earth orbit and medium earth orbit satellite systems, linking constellations with terrestrial fibre networks to serve remote areas. The Telecom Regulatory Authority of India’s framework mandates 20-year authorisations with data localisation and 20 per cent indigenous content by Year 5, extending connectivity to 214,843 gram panchayats.

Tower infrastructure companies are leveraging existing assets for electric mobility. Public charging stations surged from 6,000 in early 2023 to 29,277 by November 2025. Dedicated schemes allocated Rs 109 billion, including Rs 20 billion for charging infrastructure. By 2030, EV penetration targets across private, commercial and two/three-wheelers will require an estimated 400,000 charging stations annually.

All 100 smart cities have operational integrated command and control centres with CCTV cameras, emergency call boxes and public address systems. These centres consolidate surveillance, traffic management, utility monitoring and citizen services into unified digital hubs, transforming urban governance from reactive to predictive.

Real-world applications transforming industries

The synergy between hyperscale and edge computing is revolutionising sectors across the economy. In retail, edge centres facilitate local inventory management and speed up e-commerce transactions, while hyperscale centres process backend analytics and demand forecasts. The e-commerce sector is expected to grow from $70 billion to $325 billion by 2030, powered by edge centres.

In healthcare, edge computing supports telemedicine and real-time diagnostics, while hyperscale facilities enable medical research, AI-driven disease modelling and centralised health data repositories. Banking and financial services leverage edge infrastructure for real-time fraud detection, high frequency trading and reliable ATM network operations, with hyperscale backends managing vast transaction databases and regulatory compliance.

Manufacturing facilities use edge computing for predictive maintenance, quality control through computer vision and supply chain optimisation, while hyperscale centres handle enterprise resource planning and long-term analytics. Smart city initiatives deploy edge infrastructure for traffic management, public safety surveillance and utility monitoring, with centralised hyperscale facilities coordinating city-wide operations and long-term urban planning.

Sustainability meets digital growth

Remarkably, this digital infrastructure build-out aligns with India’s sustainability commitments. By June 2025, India achieved 50 per cent of its cumulative installed electricity capacity from non-fossil sources – five years ahead of its 2030 target. Non-fossil capacity reached 262.74 GW, accounting for 51.5 per cent of the total installed power. Renewable energy additions touched a record 44.51 GW during the year, with solar capacity rising to 132.85 GW.

Leading data centre operators are increasingly relying on renewable energy, spanning solar, wind and battery energy storage systems (BESSs). BESSs have emerged as game-changing infrastructure, enabling 24×7 operations despite renewable energy’s intermittency. India’s BESS sector witnessed transformative growth in 2025, with the Ministry of Power launching a second viability gap funding tranche supporting 30 GWh of capacity with a Rs 54 billion allocation. The Central Electricity Authority projects that 236.2 GWh of battery storage will be needed by 2031-32.

Data centres now deploy lithium-iron phosphate battery banks ranging from 50 MWh to 200 MWh, storing excess solar and wind energy during peak generation and discharging during demand spikes, ensuring uninterrupted power supply. The economics are compelling: BESS tariffs plummeted 80 per cent from Rs 1.08 million per MW per month in 2022 to Rs 221,000 by late 2024, driven by falling battery pack prices from $139 per kWh to $115 per kWh. Investment payback typically occurs within four to six years while cutting carbon emissions by up to 60 per cent.

Government incentives, including the waiver of interstate transmission charges for BESS projects commissioned before June 2028, customs duty exemptions on battery manufacturing equipment and mandatory 20 per cent domestic content requirements, are accelerating adoption. In forward-looking markets such as Gujarat and Tamil Nadu, data centres equipped with BESSs are transitioning to “prosumers” – selling energy back to the grid during high-tariff hours, generating revenue while enhancing reliability. Space-optimised facilities combine energy efficiency, water reuse and green power as core operational components rather than optional features.

Policy framework enabling transformation

Government initiatives provide crucial support. The Draft National Data Centre Policy, 2025 offers up to 20 years of conditional tax exemptions for operators, input tax credits on capital goods, 100 per cent electricity duty exemption and infrastructure status designation. Single-window clearances expedite approvals, while proposed data centre economic zones with preallocated land near IT corridors reduce development friction. The National Digital Communications Policy seeks universal broadband access, laying a critical foundation for edge computing infrastructure. The Union Budget 2025-26 proposals for centres of excellence in AI education and deep-tech funds signal continued government commitment to digital infrastructure development.

Challenges and the road ahead

Despite impressive progress, challenges remain. India generates nearly 20 per cent of global incremental data but stores only 3 per cent locally. The Digital Personal Data Protection Act, 2023 mandates data localisation, driving domestic capacity expansion. However, workforce development lags infrastructure growth – modern data centres require specialised mechanical and electrical engineers, HVAC operators, cybersecurity experts and data centre infrastructure management specialists. Bridging this blue and white-collar skill gap through public-private partnerships in professional training and university programmes is essential.

Geographic concentration presents another challenge. While Mumbai, Chennai and Bengaluru dominate, balanced regional development requires extending benefits beyond established hubs. The EV-to-charger ratio remains at 1:235, significantly below the ideal 1:20.

India’s evolution from telecommunications tower operator to comprehensive digital infrastructure provider represents more than technological advancement – it is a strategic imperative for national development. The integration of towers, fibre networks, hyperscale data centres and edge computing facilities creates a resilient, scalable foundation for the digital economy. With 125 digital unicorns already having emerged and every sector from education to healthcare undergoing a digital transformation, the infrastructure supporting this revolution must be equally transformative.

The “digital infraco” of tomorrow is not just about connectivity – it is about creating intelligent, sustainable and distributed infrastructure that powers real-time decision-making, enables breakthrough innovations in AI and IoT, and ensures that digital benefits reach every corner of India. As the nation builds towards its 2030 vision, the convergence of telecommunications heritage with cutting-edge data infrastructure positions India not just as a participant, but as a leader in the global digital economy.