Sandeep Aggarwal, Chairman, Telecom Equipment and Services Export Promotion Council
Fibre optic technology and wireless data communication systems are becoming a necessity in many residential and commercial projects across the globe. Fibre-to-the-premises, fibre-to-the-home, and fibre-to-the-building applications are some of the key factors driving the demand for the optical fibre cable (OFC) industry worldwide.
There is a global thumb rule of at least 2 fibre km (fkm) of OFC installed per person. For instance, China already has 2 fkm installed per person and is expected to exceed this by next year. To build such a robust and efficient infrastructure, India requires significant investments in cable and equipment.
To this end, the Telecom Equipment and Services Export Promotion Council (TEPC) has been urging the government to declare broadband as a utility. This means that every house and every person who wishes to get a broadband connection should be able to get it, and get high speed, high quality services. Now, for that to happen, every single road in India has to have an optical fibre highway and ducts inside it. TEPC had earlier issued papers recommending every government body to make it mandatory for each new road to have ducts. This would ensure that OFC can be pulled through without any disruptions.
Further, as the country gears up for deployment of the 5G network and use of such services, it is imperative to realise that the depth manipulation of 5G is extremely low. A 5G network cannot penetrate a normal single door. Repeaters would be required in every room, or perhaps at two places in a single room, to ensure that each of the devices in use is within that line of sight.
Today, India has only around 250 million fkm of OFC installed. In contrast, China has been installing more than 250 million fkm on an annual basis for the last 10 years. It is very important to make significant investments in expanding fibre networks. The government, on its part, has been promoting programmes such as Digital India and BharatNet, which have fibre-based connectivity at their core. Going forward, even defence will play a major role in generating demand for OFC infrastructure.
OFC sharing as the road ahead
The global demand for optical fibre is expected to increase gradually from 467 million fkm in 2020 to 633 million fkm by 2024. India’s contribution to this demand currently stands at just about 5 to 6 per cent. In other words, about 30 to 40 million fkm is being consumed in India. The annual OFC installations around the world are also much higher than those in India. One way for India to be competitive in the global markets is through greater investment inflow and monetisation of existing assets.
Another way out is to reduce requirements and avoid duplication through sharing of infrastructure. If infrastructure is shared between operators and service providers, a fewer number of parallel cables would need to be installed, bringing down roll-out costs significantly. OFC sharing can be instrumental in ensuring the provisioning of high quality bandwidth to everybody.
Huge fibre requirement
The number of places requiring OFC connections across the country is astonishing. Our view is that for every connection, about half a km of cable and about 4 fkm is needed. So, if there is a demand for about 300 million points to be connected, it would require about 150 million km of cable and 600 million fkm. Taken together, at present, India needs around 2,000 million fkm to be installed. Further, Covid-19 and the emerging work-from-home culture will require the telecom industry to meet the huge demand for bandwidth, along with quality services.
Key recommendations
According to the industry, India requires the installation of around 2 billion fkm in the next 5-10 years. But India is nowhere near that capacity. We therefore recommend to the government that optical fibre, preform and cable be added to the ambit of the production-linked incentive scheme.
While, the public-private partnership model currently being advocated by the government is expected to provide a fillip to the OFC space, in my view, operators do not have the money to invest. Investments are vital to building a strong fibre infrastructure. However, at present, the industry has been reduced to a place where investments are limited to buying spectrum. The players have no money to invest in networks. Of the total of Rs 14 trillion envisaged in the National Investment Infrastructure plan, only 3 per cent has gone into digital infrastructure.
