Closing the Divide: Government’s role in expanding digital infrastructure

In recent years, the government has emerged as the flag-bearer of digitalisation. Its Digital India initiative and the Smart Cities Mission have catapulted India into the ranks of the fastest growing digital economies in the world. The government is also promoting stakeholder participation and driving investments in the digital ecosystem. At a recently organised conference, “Digital Infrastructure for Transforming India”, key government experts shared their views on the evolving digital infrastructure landscape in the country. Excerpts…

Amit Yadav

Telecom infrastructure: The growth story

India has seen spectacular growth in the telecom space, and a large part of this has been driven by investments in infrastructure both by the private sector as well as the government. The investments from the Universal Service Obligation Fund ha­ve been used to expand connectivity across the country.

As has been pointed out by various studies, telecom infrastructure is the underlying layer for several other sectors as well as a key requirement for overall economic growth. Investments made in the telecom and digital sectors have a significant impact on the GDP. While the telecom sector’s current contribution to GDP stands at 4-5 per cent, it is likely to increase in the coming years, driven by larger investments in the sector. There has been a sixfold increase in the government’s spending on telecom infrastructure from Rs 99 billion in 2009-14 to Rs 600 billion in 2014-18. Further, investments have been made to connect areas with poor broadband connectivity including the left-wing-extremism areas, the north-eastern region, gram panchayats and the islands. Issues related to spectrum have been addressed by permitting sharing, tra­ding and harmonisation. There has been a positive change in the call drop rate and quality of service in the industry. Over 1,800,000 base transceiver stations and 500,000 towers have been set up, and a huge investment has been made in the fibre sector as well. As a result, teledensity in the country has reached 93 per cent. Further, mobile internet subscribers have reached over 500 million. Mobile in­ter­net coverage has increased, which in turn has promoted digital payments.

“It is important that the value captured is shared with the private sector. If it is not able to make returns, it would not be interested.” Amit Yadav

However, huge areas in the country are still unconnected. Through Bharat­Net, we have tried to reach gram panchayats, but extending connectivity beyond that is still an issue. Other challenges pertain to the high cost of fibre and right of way.

It is important that the government and the private sector look at the National Digital Co­­­m­­­munications Policy (NDCP), 2018 collectively and make the necessary investments to provide broadband for all over the next two to three years. At present, while there is a significant amount of work being done by the government on the Wi-Fi front, fibre needs big investment from the industry. And then, the biggest investment demand in the coming years will come from 5G and its related aspects, which cut across sectors.

Yaduvendra Mathur

Rise of digital infrastructure

There are two types of innovations, one that is disruptive, and the other that is not only disruptive but also transformative. We should be aiming for the latter. As we move towards 4G and now 5G, it is important to evaluate whether we should be making any investments in 2G/3G now. My sense is that with India’s technological landscape evolving rapidly, the economics around the technologies and assets that get left behind have to be given serious attention.

Definitely, reinventing our cities is the starting point. We cannot have smart cities up and running if we do not focus on data integration. The data in cities is still in silos, and the command and control centres are not fully integrated across the whole spectrum of services in urban areas. We need to develop an overarching platform, that captures and processes all the city data.

We may be talking about internet of things and a lot of related jargon, but we are still not addressing some very basic data points in our desire to develop digital infrastructure. All the 100 smart cities should have digitised city maps with a layer for water and electricity. This concept was started some 20 years ago in Visakh­a­pat­nam. The same needs to be replicated in other cities and the work needs to be done by the private sector. Interestingly, there exists a huge wish list as to what infrastructure we need but the bottom line is to adopt a granular approach and have discussions with city administrations. If we do not br­ing in systematic integrated processes, digital infrastructure will just be like any other physical infrastructure.

Under BharatNet Phase I, we have spent an enormous amount of money in connecting over 100,000 gram panchayats. They are service ready but the utilisation is only 69 per cent. The project can clearly deliver more. So in Phase II, eight states under BharatNet are taking the public-private partnership (PPP) route. Here, it is important that the value captured is shared with the private sector. If it is not able to make returns, it would not be interested.

Another key point is on capacity building of humans. It is not just about the roll-out of hardware, but a focus on training manpower is equally important. This is an­other area where PPPs will have to come in.

“It is important that the government and the private sector look at the NDCP 2018 collectively and make the necessary investments to provide broadband for all.” Yaduvendra Mathur

Arvind Gupta

Investment opportunities for the creation of quality digital infrastructure

We have added digital infrastructure to the set of key infrastructure pillars in India, which include energy, transport, city infrastructure and social infrastructure. Digital infrastructure is a very important part of the government’s Digital India initiative and is essential for societal change. Fur­ther, building a robust digital infrastructure that will help India leapfrog into the fourth industrial revolution is one of the key visions of the government. Unlike anywhere in the world, digital infrastructure in India is built purely in PPP mode. In fact, India is the only country in the world where digital infrastructure is in PPP mode and owned by the government rather than a private company.

Digital infrastructure involves two types of infrastructure. One is physical in­frastructure or hard infrastructure, which comprises the network and access parts of infrastructure and is owned by private companies. The other is soft infrastructure, whi­ch, comprises platform infrastructure. Platform infrastructure is called India’s sta­ck. It includes Aadhaar, payments, Digi­Lo­cker and banking. All these components of platform infrastructure are interlinked.

India is uniquely positioned as it has been converging its hard and soft infrastr­uc­ture. The country has been making steady progress in physical or hard infrastructure. From 358 km of optical fibre in 2014, India now has close to 300,000 km owing to the BharatNet project. While 120,000 gram panchayats have already been lit up, more would be added as we speak. Further, we have progressed from having only two mobile factories to 127 mobile factories at present. A lot of emphasis is also being laid on building soft infrastructure. This has enabled companies to conduct know your customer (KYC) in In­dia. For instance, we have brought down the cost of KYC using e-KYC from $25 to $1.

This is a part of India’s digital infrastructure development. Google Pay, Paytm and WhatsApp payments use the government’s infrastructure, BHIM-UPI (Bharat Interface for Money Unified Payments Interface), to provide its services. It is an open innovation and companies can build platforms on top of it. This is the approach of co-creation, where the government is building pipelines and you can build on top of it.

India has been investing heavily in building common open infrastructure. How­­ever, the challenge is whether this can reach every single Indian in terms of ac­cess at the same cost and the same speed. I think for that the NDCP has identified new goals for bridging the digital divide between rural and urban areas.

There has to be a lot more discussion on building very inclusive soft infrastructure at low cost, which can support a basic handset and multiple languages. While we have 480 million smartphones in India, we still have 600 million people who do not have a smartphone.

In sum, we are building both hard (access, hardware, literacy) and soft (built on application program interfaces, open in­n­ovations like Aadhaar, payment gateways and DigiLocker) digital infrastructure so that they converge to become more open, and innovation can happen on top of it.

In the past, India was not leading in­ter­national discussions on new digital standards because digital services were not a priority area. Today, it is heartening to see that the global community is realising that India has been innovating. Thus, most of the standards committees have In­dian representation. I think we are on the right track and the NDCP goals of connecting, propelling and securing India using digital infrastructure by 2022 are steps in the right direction.

“India is the only country in the world where digital infrastructure is in PPP mode and owned by the government rather than a private company.” Arvind Gupta