The Indian digital infrastructure space has been evolving at an unprecedented rate, buoyed by the government’s re­for­mative measures and initiatives undertaken by private stakeholders. Telecom towers, optical fibre cables, in-building solutions, sm­art poles, smart towers, subsea cables, Wi-Fi networks, data centres, etc., are all co­mponents of the digital infrastructure eco­system that are witnessing unprecedented growth. Now, with the advent of 5G in the Indian market, these elements are set to play a bigger role in enhancing telecom con­nectivity across the country.

A look at the key trends in the digital in­frastructure space and emerging opportunities.

Scaling up traditional infrastructure

Throughout 2022, numerous initiatives were undertaken to scale up traditional in­frastructure such as towers and optical fibre across the country. In January 2022, the go­vernment announced plans to add as many as 800,000 new mobile towers over the next two years to increase the current tower strength by over two times. While in Jan­uary 2022, India had around 680,000 towers installed across the country, the plan envisages increasing the number to over 1.5 million towers by financial year 2024.

The move was coupled with a plan to ensure that nearly three out of four towers are connected through optic fibre to increase their data-carrying capacity. With the implementation of the plan, tower de­nsity is expected to go up from 0.4 per 1,000 population to 1 per 1,000 populati­on by the end of March 2024.

Further, the government announced plans to increase the number of villages fi­be­rised from 260,000 to 600,000 by 2025. Under the BharatNet project, Jhar­khand became the first state in the country to provide connectivity to all gram panchayats (GPs) of the state under state-led mo­del of the BharatNet programme. To this end, HFCL connected 1,789 GPs through GPON (gigabit passive optical network) wherein 7,765 kilo­me­­tres (km) of OFC was laid out. More­over, TANFINET (Ta­m­il Nadu FibreNet Corporation Limited) awarded a contract to deploy 16,500 km of fibre network in nine districts to Polycab India Limited.

Recent reforms to facilitate infrastructure roll-out

The government has also been initiating a number of progressive reforms aimed at facilitating infrastructure roll-out in the country and protect the existing infrastr­ucture. For one, the Department of Te­le­communications recently notified Indian Telegraph (Infrastructure Safety) Rules, 2022 to protect telecom infrastructure fr­om damages. The rules lay out the procedure for exercising the legal right to dig or excavate any property. Further, the Mi­ni­stry of Defence released the long-awaited new progressive set of right-of-way (RoW) rules for rolling out mobile towers, optical fibre and other telecom infrastructure, that is, “Policy on Shared Communi­cation Tower and Other Telecom Infra­str­ucture to Extend Communication Net­work in Military Stations/Cantonments”.

On the regulatory front, the Telecom Regulatory Authority of India released a consultation paper titled “Telecommuni­ca­tion Infrastructure Sharing, Spectrum Sh­aring and Spectrum Leasing” to seek the industry’s views on issues related to in­frastructure sharing, spectrum sharing and spectrum leasing.

Among states, the Rajasthan government released guidelines allowing telecom service providers to install mobile towers on buildings without the need to take permission from any authority.

Collectively, these initiatives point to the speeding momentum that the digital infrastructure space is poised to experience in the coming years. According to a GSMA report titled “India: On the road to a digital nation”, telcos in India are expected to invest around $19.5 billion in the development of advanced infrastructure for 5G by 2025.

FTTx on the rise

The demand for new home broadband co­n­nections based on fibre-to-the-x (FTTx) technology is also witnessing a surge in In­dia, especially after the onset of the Covid-19 pandemic. During the past three to fo­ur years, optical fibre-based networks have helped scale up the level of broadband pe­netration in the country.

However, the country still has a long way to go. FTTx penetration in India re­mains abysmally low in comparison to gl­obal telecom markets. To tackle this issue, FTTx implementation needs to go up and FTTH (fibre-to-the-home) services need to be introduced in every locality in India, augmented with suitable provisions for in-building solutions to enhance the quality of services.

With India now stepping into the 5G era, these networks will require higher bandwidth and network speeds, which FTTx can fulfil owing to its low-latency and high-bandwidth fibre networks. Fur­th­er, the convergence of 5G and FTTx net­­works would lead to a considerable reduction in costs and investments. As per industry estimates, a maximum of only 7 per cent more investment in the current FTTx deployment could reap up to 96 per cent savings in future 5G networks.

Energy management and sustainability

Amidst rising concerns related to energy consumption, stakeholders across the digital infrastructure ecosystem have started undertaking efforts to use sustainable energy at telecom tower sites so that the busine­ss becomes sustainable at the prevailing average revenue per user. Further, the government, on its part, notified the Green Open Access Rules 2022. The rules promo­te renewable energy through green en­er­gy open access for any consumer who has contracted demand/sanctioned load of 100 kW or more except for captive consumers.

Among private stakeholders, Bharti Airtel announced the commissioning of a new 21 MW solar power plant in the Bhu­ldana district of Maharashtra. The captive power unit, which is spread over 80 acres, was set up by Airtel, in partnership with Av­a­­ada, to supply clean energy to Nxtra by Air­tel’s large and edge data centres and swit­ching centres in the state of Maha­ras­htra. The company expects significant re­duction of 25,517 tonnes in carbon emissions annually through this unit. Nxtra also partnered with Bloom Energy during the year to deploy low environmental impact fuel cell installation at its data centre in Karnataka, reducing carbon emissions through a cleaner, hydrogen-ready fuel supply.

Energy consumption and cost management have been key priorities for telecom tower companies as well. In recent years, several initiatives have been taken by towercos and energy service companies to optimise energy consumption at tower sites and better manage the energy re­q­uire­ments. The use of diesel generator (DG) sets has also reduced significantly du­ring the past few years, with grid power emerging as the key source of power at tower sites. Towercos typically meet 70 per cent of their energy requirements th­rou­gh grid power, whereas 28-29 per cent is supported by DG sets and 1-2 per cent by renewable energy sources, mainly solar. For Tower Vision, almost 98 per cent of its sites are connected to the grid, but the co-m­pany uses DG sets or batteries as back-up at several sites.

Challenges and outlook

The telecom infrastructure space in India is expected to scale new heights in the coming years. While immense government support has helped in the transition from traditional to digital infrastructure, a lot still needs to be done. The biggest hurdle today is the slow progress being experienced in the im­plementation of small cells and enabling densification of the 5G network. Further, scaling up the number of towers as well as the number of towers fiberised should be a key priority to leverage emerging opportunities presented by technologies aligned with 5G such as artificial intelligence, big data and internet of things.

Going forward, as the country moves towards its goal to transform into a digitally empowered society and knowledge economy, the need for large investments in all types of digital infrastructure is imperative. According to the Broadband India Forum, digital infrastructure needs to increase several-fold in the next five years to help ac­hieve the goal of trebling the gross domestic product to $7.5 trillion during the aforementioned time period. This would require immense support by the government as well as private sector stakeholders