Digital infrastructure is among the topmost priorities on the development roadmaps of countries across the globe. In India, the deep penetration of telecom and internet, enabled by the government’s focus on the promotion of the digital economy, has laid the foundation for building the Digital India Stack, which is now the global benchmark for most economies. However, 5G network roll-out and the proliferation of new-age technologies such as internet of things (IoT) and artificial intelligence have put immense pressure on the existing infrastructure. To address the surge in data and connectivity demand, government, operators and equipment vendors are exploring various digital infrastructure solutions.
A look at the emerging digital infrastructure mediums and the way forward…
Edge data centres
Edge data centres, which are small facilities located close to the edge of the network, offer an enhanced user experience by providing faster performance and lower latency. They also assist in delivering cloud computing resources and cached content to end-users. The demand for edge data centres in India is being driven by smart city initiatives and next-generation technologies deployed therein. Moreover, 5G roll-outs have entailed a decentralised small cell network of edge data centres that will be crucial for providing low-cost and low-latency support for high-device-density use cases. Additionally, service providers are increasingly moving towards leveraging architectures and technologies of software-defined network (SDN) and network function virtualisation (NFV) to become more agile. Such deployments add to the demand for edge data centres.
As edge data centres can potentially become the next big disruptor in digital infrastructure, enterprises, cloud service providers and telecom operators have started eyeing opportunities and investing heavily in the segment. Recently, Varanium Cloud Limited announced the launch of its proprietary designed edge data centre in Panjim, Goa. Meanwhile, NxtGenDatacenter and Cloud Technologies last year announced an investment of Rs 13 billion to set up 236 edge data centres in India. The company has four edge data centres, in Faridabad, Mumbai, Bengaluru and Ahmedabad, and it is looking forward to developing new facilities in Hyderabad, Visakhapatnam and Chennai. The latest entrant in the domain is the RailTel Corporation of India, which has announced its plans of establishing 102 edge data centres on railway premises, especially in Tier 2 and Tier 3 towns of the country.
Fixed broadband penetration in India is low, with less than 10 per cent of households having access. Satellite communications have evolved to become a key facilitator for last-mile connectivity to rural and remote areas, where terrestrial coverage has historically been challenging. It has also helped support various new technologies such as machine-to-machine communications, IoT and over-the-top streaming.
Although satellite broadband in India has been mainly controlled by the government, the sector is currently experiencing a boom in private participation. Two players have the GMPCS (global mobile personal communication by satellite) licence in the country – OneWeb and Jio Satellite Communications Limited. In September 2022, Hughes Communications, a joint venture between Bharti Airtel and Hughes Network Systems, announced the launch of its first HTS (high-throughput satellite) broadband internet service in India in collaboration with the Indian Space Research Organisation. NewSpace India Limited too has signed agreements with various private sector companies, including OneWeb, to launch satellite broadband services. In terms of growth, Deloitte predicts that India’s satellite broadband service market size will reach $1.9 billion by 2030, at a compound annual growth rate of 36 per cent.
Subsea cable systems
Nearly 99 per cent of global digital international communications transit through the extensive network of submarine cables, which is the backbone of today’s fast-paced world economy. The Tele Geography Submarine Cable Map 2022 depicts 486 cable systems that are currently active or under construction worldwide, spanning a total distance of over 1.3 million km and 1,306 landings.
In India, there are 17 international subsea cables landing in 14 distinct cable landing stations as of end 2022. These are located in Mumbai, Chennai, Kochi, Tuticorin and Trivandrum, of which the first two cities have the maximum concentration of submarine cables. According to the Telecom Regulatory Authority of India (TRAI), the lit capacity and the activated capacity on these 17 international subsea cables were 123.87 Tbps and 83.8 Tbps, respectively, by the end of 2021. New submarine cables under construction or at the planning stage are also in the pipeline at some new locations such as Digha, West Bengal, and Mahuva, Gujarat. There has been active private sector participation in this domain. In a recent move, Reliance Industries Limited received approval from the government to build submarine cable systems from Mumbai to Europe and Asia. The cable systems, India-Europe-Xpress and India-Asia-Xpress, are the largest globally. Industry reports forecast that going forward, India is set to record the highest growth in the Asia-Pacific submarine cable industry and the market size is expected to reach $78.6 million by 2030.
Small cells on street furniture
Small cells have an edge over macrocells as they offer stronger cellular coverage, scalability, relatively low cost of deployment and low latency. They can also be aligned to requirements of distinct use cases due to their smaller form factor. The deployment of small cells on street furniture such as electricity poles, billboards and traffic lights can play a pivotal role in 5G network upgradation and densification. A combination of macrocells with extensive deployment of small cells will be required in the use of high frequency 5G bands to support various applications at all locations.
Last year, TRAI simultaneously initiated pilots at Bhopal Smart City, GMR International Airport, New Delhi, Deendayal port, Kandla, and Namma Metro, Bengaluru, on the use of street furniture for small cells and aerial fibre deployment. The aim was to develop a cross-sectoral framework that promotes sharing of street furniture infrastructure among various central, state and municipal authorities to develop the 5G network. In November 2022, the regulator released its recommendations on the issue, wherein it suggested earmarking dedicated spaces in buildings for installing digital connectivity infrastructure, including small and macrocells, by all central government entities. Recently, the government announced that the Department of Telecommunications and state governments are using the PM GatiShakti National Master Plan to identify suitable street furniture for the installation of 5G cells.
Smart poles are multifunctional aggregation points for smart urban infrastructure, equipped with electronic components, software controls and smart sensors that can receive and transmit data. They are emerging as a futuristic street asset and a key component in the development of smart cities the world over. They provide an efficient, scalable and modular framework for hosting various aspects of smart urban infrastructure such as Wi-Fi hotspots, surveillance and traffic cameras, signage and information displays, air quality and flood monitoring solutions, and charging points for vehicles, handsets and other devices. The main driver for smart pole deployment is the need for cellular network densification including 5G and future 6G small cells and the use of mmWave radio spectrum. Smart poles can also help wireless carriers easily and efficiently densify their network coverage and increase capacity in congested public places.
While cities such as Barcelona, Los Angeles and Copenhagen have been frontrunners in smart pole deployments, cities in India have been catching up fast. Bhopal, Vadodara, New Delhi and Dehradun have started collaborating with towercos to undertake projects focused on the installation of smart poles, thus opening up enormous revenue opportunities for these companies. Among towercos, Indus Towers and Bharti Infratel are the leading players in terms of smart pole deployments. Going forward, smart poles are expected to be deployed on a massive scale. According to ABI Research, the installed base of smart poles will exceed 10.8 million globally, with system revenues amounting to $60 billion by 2030.
The way forward
Increased internet penetration, digital transformation by enterprises and digital initiatives by the government have highlighted the need for a robust framework by leveraging existing and emerging infrastructure mediums, while also monetising existing assets. The focus has seamlessly shifted from physical infrastructure to investing in digital infrastructure. EY estimates cumulative investments required in various components to be around Rs 921 billion-Rs 1.41 trillion during 2022-27. In sum, as the Economic Survey 2022-23 states, “The synergy between physical and digital infrastructure will be one of the defining features of India’s future growth story.”