The Indian telecom infrastructure space has undergone a significant transformation during the past two years. With the outbreak of the Covid-19 pandemic and the resultant digitalisation of operations across industries, contemporary infrastructure such as in-building solutions, smart poles, smart towers and data centres has gained traction along with the increasing demand for traditional mediums like telecom towers, optical fibre and subsea cable infrastructure. Together, these traditional and next-generation solutions form digital infrastructure, which is the bedrock of the digital age.
The year 2021 proved that digital infrastructure is not only the need of the hour, but also of the future as it is critical for making the giant leap towards 5G. In view of this, the government launched the Gati Shakti National Master Plan in 2021. The plan aims to provide a major impetus to digital infrastructure creation by launching a unified portal for approval of various infrastructure projects; promoting cross-sector collaboration with utilities such as water, gas, electricity, broadcasting and railways for sharing of infrastructure such as common ducts; formulating a uniform right-of-way (RoW) policy comprising uniform timelines, fees, documentation, etc. for all states and union territories; making available land/properties of other ministries/departments for deploying telecom infrastructure; and promoting sharing of telecom infrastructure with other utilities by enhancing the scope of telecom infrastructure providers.
Private players, too, realised the importance of digital infrastructure. The erstwhile TAIPA, the industry body for telecom infrastructure providers in India, repositioned itself to Digital Infrastructure Providers Association (DIPA), to stay ahead of emerging trends in the sector and leverage opportunities in the new era of cutting-edge technologies. The evolution of traditional infrastructure towards digital infrastructure has opened new avenues of growth in the ICT ecosystem and its stakeholders.
A look at the key developments that shaped the digital infrastructure space during 2021 and the way forward…
Increased traditional infrastructure penetration
The penetration of traditional infrastructure mediums like base transceiver stations (BTSs), telecom towers and optical fibre cable (OFC) has increased significantly. As per government data, the number of BTSs grew by 187 per cent, from 800,000 in 2014 to 2,300,000 in 2021, while towers grew by 65 per cent from 400,000 to 660,000 during the same period. Further, the penetration of OFC increased by 150 per cent from 1,100,000 km in 2014 to 2,800,000 km in 2021 (as of October 2021).
Under the government’s BharatNet initiative, a total of 17,232 gram panchayats (GPs) were made service-ready during 2021 (as of October 31, 2021), of which 16,344 GPs were connected via OFC and 888 GPs via satellite media. As of November 1, 2021, a total of 179,247 GPs were connected under BharatNet Phase II by laying 552,514 km of OFC.
In terms of state-wise progress, in December 2021, Tamil Nadu Fibrenet Corporation Limited awarded a contract to ITI Limited to cover 10 districts/109 blocks/3,103 GPs/845 villages across the length and breadth of Tamil Nadu, and laying around 15,000 km of OFC. The government also gave approval for the implementation of the BharatNet Phase II project in Uttarakhand. Following this, 12,000 villages of Uttarakhand will get internet connectivity. Further, the Kerala government launched the Kerala Fibre Optic Network project to provide free high speed internet connectivity to 2 million families below the poverty line. Meanwhile, the Uttar Pradesh government announced its target of connecting 58,194 GPs in 75 districts of the state with optical fibre by December 31, 2022, under the National Broadband Mission.
Connecting the unconnected
Immense progress was made in connecting the unconnected. In left-wing extremism (LWE)-affected areas, towers were installed at 2,343 locations under Phase I of the LWE project. Under Phase II, the government has approved the installation of 2,542 towers for providing 4G mobile services. Recently, in November 2021, the government announced a project to provide 4G-based mobile connectivity in 7,287 uncovered villages of aspirational districts in five states under the Aspirational District Scheme. These five states are Andhra Pradesh, Chhattisgarh, Jharkhand, Maharashtra and Odisha. The project is expected to be worth Rs 64.66 billion.
Further, under the Comprehensive Telecom Development Plan for the north-eastern region, the government plans to provide mobile connectivity in the uncovered villages and along national highways in Assam, Manipur, Mizoram, Nagaland, Tripura, Meghalaya, Sikkim and Arunachal Pradesh. The project is currently under implementation, with 1,358 towers installed as of October 2021.
Strengthening subsea cable connectivity
The submarine cable connectivity space also witnessed growth during the year. In May 2021, Reliance Jio announced that it is constructing two international submarine cable systems in India. These cables are the India-Asia-Xpress system, which connects India eastbound to Singapore and beyond, and the India-Europe-Xpress system, which connects India westbound to the Middle East and Europe. These high capacity and high speed systems will span over 16,000 km and provide more than 200 Tbps of capacity.
The government also laid emphasis on expanding submarine fibre cable coverage. To this end, state-owned Bharat Sanchar Nigam Limited awarded a contract Rs 10.72 billion to NEC India worth for laying submarine fibre cable spanning approximately 1,891 km between Kochi and Lakshadweep.
Telecom relief package
The year 2021 has also been a watershed year, with the government announcing the much-awaited reform package for the telecom sector. The key reforms in the infrastructure space were easing of the Standing Advisory Committee on Radio Frequency Allocation clearance for telecom towers, adoption of the self-declaration route for the roll-out of towers, and issue of new guidelines for allowing sharing of infrastructure between domestic other service providers (OSPs) and international OSPs.
Initiatives to streamline RoW
In another key move, the Department of Telecommunications (DoT) amended the Indian Telegraph RoW Rules by way of a gazette notification. While prior to the amendment the RoW rules had only applied to underground OFC and mobile towers, now they also apply to overhead OFC. The amended rules define a framework for laying of overhead OFC and development of infrastructure, and facilitate 5G roll-outs across the country.
In September 2021, the Telecom Regulatory Authority of India issued a number of recommendations for the resolution of various issues regarding digital infrastructure creation. These include creation of a national RoW portal; exemption of RoW charges for five years (from 2022-23 to 2027-28) for expeditious laying of common ducts; streamlining of the RoW permission process with more participation of utility departments and central agencies; and introduction of uniform restoration charges.
Amendments to promote active infrastructure sharing
During the year, DoT amended the unified access service licence rules, thus widening the scope of active infrastructure sharing to provide an impetus to public Wi-Fi services. Under the amended rules, active infrastructure sharing of Wi-Fi equipment such as Wi-Fi routers, access points and backhaul was allowed.
Further, in September 2021, DoT amended licence regulations to allow active infrastructure sharing among telecom operators, including core networks. Previously, tower infrastructure and electronic components within the network were shared among telcos.
States prioritise digital infrastructure creation
The state governments also actively undertook initiatives to ease the RoW process and deploy digital infrastructure. In a bid to facilitate the speedy roll-out of telecom towers and OFC, the Telangana government launched an RoW portal to ease the process of getting RoW permissions by infrastructure providers. The North Delhi Municipal Corporation lowered tower installation fees by about 40 per cent in order to increase network connectivity. In another landmark move, the Urban Development and Housing Department of Rajasthan issued an order, making it mandatory for a developer developing a township or colony on less than 1 hectare of land to reserve land for a mobile tower.
Further, the Maharashtra government constituted a new committee that will work towards resolving the challenges faced by telecom infrastructure providers in the state. These pertain to the implementation of the telecom infrastructure policy, rationalisation of property tax on telecom towers, and regularisation of towers existing prior to the policy notification by the state government in February 2018.
To prevent infrastructure damage, the governments of Tamil Nadu and Manipur issued directives demanding legal action to be taken against people damaging or obstructing duly approved existing or upcoming telecom infrastructure. Moreover, the Punjab government decided to regularise all telecom towers installed without authorisation between December 5, 2013, and December 7, 2020, in an effort to strengthen the telecommunication infrastructure in the state.
The Goa government announced plans to install 62 new mobile towers under Phase I of its telecom policy and over 138 towers under Phase II. Meanwhile, the Uttar Pradesh government approved a data centre policy, which aims to develop 250 MW of data centre industries in the state and attract an investment of Rs 200 billion.
Advancements under the Smart Cities Mission
A number of smart cities also witnessed advancements in terms of expansion of digital infrastructure. NEC Corporation India won the contract to build Thiruvananthapuram smart city’s integrated command and control centre. Further, Bengaluru-based iRAM Technologies secured four smart city projects, for Dahod, Kohima, Pimpri-Chinchwad and Rajkot. These projects were awarded for the deployment of smart poles, smart street lighting, and smart parking city assets. Moreover, the Guwahati Municipal Corporation appointed Vi Business as the implementation partner for providing Vi intelligent mobility solutions to Guwahati municipal Swachh Bharat workers.
M&A and fundraising activity
Fund raising and mergers and acquisitions (M&As) in the digital infrastructure space also gathered steam during 2021. In April 2021, Morgan Stanley India Infrastructure made an investment of $21 million to acquire a stake in iBus Networks. Later, iBus Networks acquired 100 per cent stake in Ubico Networks, its in-building and in-campus neutral-host infrastructure business and all related assets, from the Shyam Group for around Rs 1 billion in an all-cash deal.
In another key move, Brookfield-sponsored Tower Infrastructure Trust (Tower InvIT) acquired Space Teleinfra Private Limited (STIPL) for an equity consideration of Rs 9 billion (subject to closing adjustments) and additional milestone-based considerations. By acquiring STIPL, Tower InvIT will be able to provide customers with a wide range of passive telecommunication infrastructure services, including macro towers and indoor solutions. Further, in August 2021, Summit Digitel Infrastructure raised $500 million via overseas bonds.
New players enter the digital infrastructure space
Recognising that digital infrastructure is going to play a crucial role in the upcoming 5G era, a number of new players started entering this space. In August 2021, Assam Electronics Development Corporation Limited (AMTRON), a Government of Assam undertaking, became the first state-owned PSU to obtain national-level telecom licences. The move will allow AMTRON to provide high speed internet connectivity to the north-eastern region, which includes Bhutan, Nepal, Myanmar and Bangladesh. After attaining the licence, AMTRON appointed iBus Networks as its business partner for deploying and operating digital infrastructure.
Innovations in infrastructure
The year also witnessed some remarkable innovations in the digital infrastructure space. For instance, the Indian Institute of Technology, Kharagpur, developed unmanned aerial vehicle-assisted communication infrastructure for 5G that can serve as an airborne mobile telecom tower in an emergency. The project is funded by the Ministry of Electronics and Information Technology and the team has submitted the Phase I report to the ministry.
Net, net, the digital infrastructure space in India is expected to scale new heights in the coming years. While immense government support has helped in the transformation from traditional infrastructure to digital infrastructure, a lot still needs to be done. The biggest hurdle today is the omission of small cell deployment and access to street furniture in the RoW Rules, both of which can play a significant role in shaping India’s 5G growth trajectory. Since the outbreak of the Covid-19 pandemic, indoor connectivity through small cells has emerged as a critical factor for ensuring digital growth and enabling densification of the 5G network. Another issue is the shortage of adequate backhaul and high costs.
To address these issues, DoT has recently formed a committee to review the availability of street furniture, particularly the strength of electricity poles and air speed so as to assess if they are capable of being leveraged for a seamless 5G network. The committee is reviewing the quantum of state-owned infrastructure to make it available for 5G small cell deployment.
While the formation of the committee is a step in the right direction, the country needs a well-formulated action plan that streamlines the process of deploying small cells, has minimal regulatory hurdles, promotes sharing of infrastructure and comprises an affordable fee structure. Such an action plan will go a long way in strengthening India’s 5G dream.
Kuhu Singh Abbhi