The Indian telecom industry has made considerable progress in recent years, making the country the second largest telecom market globally, with approximately 1.2 billion subscribers and an overall teledensity of around 86 per cent. Increased availability of affordable smartphones, low tariffs, government initiatives, the proliferation of digital applications and advancements in next-generation technologies have been the key drivers of this growth. Internet users in the country have surged from 251 million as of end March 2014 to 954 million as of end March 2024, with about 920 million being broadband subscribers. Data usage is also expanding rapidly, with total quarterly consumption rising from around 36,000 petabytes (PB) in March 2022 to over 52,000 PB in March 2024.
The growing demand for high speed and reliable connectivity has increased the need for robust and reliable network access across the country. The government and industry players have made substantial efforts to expand the country’s digital infrastructure, with a focus on enhancing network capacity and coverage. However, significant challenges persist, particularly in rural areas where the next surge in demand for connectivity is expected. Addressing these gaps will require targeted investments and strategic initiatives from governments, regulatory authorities and industry stakeholders to ensure that digital infrastructure evolves in line with the ever-increasing demand for reliable and high speed connectivity.
Current landscape of India’s digital infrastructure
The past few years have seen significant expansion in digital infrastructure, including towers, optical fibre cables (OFCs), base transceiver stations (BTSs) and small cells, to address the growing demand for ubiquitous connectivity. The country now has approximately 0.8 million telecom towers, 2.93 million BTSs and 0.45 million 5G mobile BTSs. Fibre infrastructure has also advanced considerably, with over 3.72 million route km (rkm) of OFC deployed. The pace of fibre deployment has accelerated significantly since the launch of 5G services, averaging around 0.1 million rkm per month compared to about 0.017 million rkm in the pre-5G years.
The BharatNet project, one of the world’s largest rural broadband initiatives, has also witnessed substantial progress. As of June 2024, over 214,000 gram panchayats have been equipped with broadband infrastructure, and 0.69 million km of OFC has been laid under the project. Tower fiberisation has also increased substantially, with fibre penetration at telecom towers reaching about 38 per cent, though it remains below the government’s target of 70 per cent.
Policy impetus to accelerate the deployment of digital infrastructure
The Indian government has undertaken several initiatives to accelerate the deployment of digital infrastructure across the country. A major legislative development was the enactment of the Indian Telecommunications Act, 2023, which replaced outdated laws such as the Indian Telegraph Act of 1885. This new act reclassifies telecom infrastructure as critical infrastructure, emphasises network security and standardises right-of-way (RoW) processes. By addressing issues such as multiple levies and state-level taxes, the act aims to create a more uniform regulatory environment, facilitating faster deployment of telecom infrastructure. It also introduces provisions for streamlining RoW approvals, reducing compliance burdens and permitting infrastructure deployment on private property, paving the way for a more efficient roll-out of digital networks across India. In addition, the government has amended the Indian Telegraph RoW Rules, 2016, with the latest modifications in 2023 aimed at further simplifying the process for telecom companies. These amendments allow for building temporary overground infrastructure without incurring fees for damage to existing underground networks, and enable the submission of a single application for multiple small cell sites, reducing administrative overheads. A significant step towards centralising and expediting RoW approvals was the launch of the GatiShakti Sanchar portal in 2022 to streamline the approval process for telecom infrastructure by bringing together various stakeholders, including central and state governments, local bodies and service providers. In urban areas, the government has launched the Prime Minister Wi-Fi Access Network Interface initiative to provide affordable internet access through public Wi-Fi hotspots. Over 182,000 hotspots have been deployed under the initiative, with a target of 50 million hotspots by 2030.
Meanwhile, the Indian government and Telecom Regulatory Authority of India (TRAI) have initiated several measures to promote the use of street furniture for small cell and aerial fibre deployment. TRAI released recommendations in November 2022, aimed at creating a regulatory framework that facilitates collaboration among various departments, central and state agencies, local bodies and service providers. These recommendations include amending the RoW Rules to clarify the term “street furniture”, expanding the national portal for RoW permissions to cover all utility providers, and creating a geographic information system-mapped catalogue of street furniture assets with drone-based mapping. Following these recommendations, the union cabinet has simplified the clearance process for installing low-power BTSs such as small cells on existing structures, eliminating the need for formal processing. The government has also made strides in enhancing subsea cable connectivity, crucial for improving international bandwidth and connectivity for island territories, through the Chennai-Andaman Nicobar Islands and Kochi-Lakshadweep Islands submarine OFC projects.
State governments are also playing a crucial role in this digital push, with several states amending their policies to align with central guidelines and expedite the roll-out of telecom infrastructure. For instance, Rajasthan, Assam, Goa and Madhya Pradesh have introduced policies to facilitate the installation of mobile towers, OFC and small cells, particularly for expanding 5G networks. Several state governments have also started mapping the use of street furniture to facilitate small cell and aerial fibre deployment and are leveraging the GatiShakti National Master Plan to identify suitable street furniture for installing small cells.
Emerging opportunities for industry stakeholders
The expansion and modernisation of digital infrastructure in India have presented significant opportunities for various stakeholders, including telecom operators, infrastructure providers, technology companies and investors. Telecom operators, with the roll-out of 5G services, can enhance their service offerings and tap into new revenue streams, leveraging the deployment of small cells and the expansion of OFC networks to support 5G’s high speed, low-latency requirements, and exploring partnerships with infrastructure providers and technology companies to reduce capital expenditure. Meanwhile, infrastructure providers, such as independent tower companies and OFC providers, can benefit from the increased demand for telecom infrastructure, as the government’s focus on fiberisation and small cell deployment creates opportunities for network expansion and long-term contracts, while the push for green energy solutions opens up avenues for integrating renewable energy sources into operations. Technology companies, specialising in network equipment, software and cloud services, can capitalise on the growing demand for cutting-edge technology solutions required for the deployment of 5G, small cells and advanced OFC networks, with opportunities to collaborate with telecom operators and infrastructure providers to develop innovative solutions for network optimisation, cybersecurity and IoT integration.
Legacy hurdles persist while new challenges emerge
Despite the policy push given by the government in recent years, the development of digital infrastructure in India is still fraught with a mix of long-standing challenges and new pressures from the proliferation of next-generation technologies. Traditional challenges such as obtaining RoW permissions, particularly in urban areas, continue to hinder the timely deployment of telecom towers and OFC, despite efforts to standardise charges and streamline approval processes. High capital expenditure remains a persistent issue, as telecom operators grapple with the financial strain of network expansion, exacerbated by the substantial costs associated with spectrum acquisition and the deployment of 5G networks.
Meanwhile, the advent of advanced technologies such as 5G, IoT, and small cells has introduced new challenges, including the need for extensive fiberisation and the integration of new infrastructure elements into existing networks. Additionally, extending digital infrastructure to rural and remote areas remains a formidable task, as the low return on investment in these regions deters private sector participation, despite government initiatives aimed at bridging the digital divide. Meanwhile, the regulatory landscape struggles to keep pace with the fast evolving technological environment, requiring continuous updates to ensure that innovation is encouraged while consumer interests and market fairness are safeguarded.
The way forward
As the demand for high speed services surges with the proliferation of next-generation technologies and bandwidth-intensive applications, the need for a robust digital infrastructure across the country is set to increase significantly. While the government and industry have made considerable strides in improving digital infrastructure, further enhancements are needed to keep pace with the ever-rising demand for reliable, high speed connectivity. Going forward, focusing on streamlining regulatory processes, strengthening public-private collaboration and investing in critical projects such as BharatNet and subsea cables will be essential to ensuring that India’s digital landscape remains expansive, inclusive and capable of supporting future technological advancements and burgeoning network demands.