The promise of Digital India, and its potential to turbo-charge economic activity, is based on an assumption of rock-solid, fast teleconnectivity. Digital India can only work optimally if high teledensity exists, and high-speed, high-bandwidth networks allow digital public infrastructure (DPI) to work seamlessly and securely across geographies.
In addition, India needs to develop a resilient indigenous ecosystem for manufacturing equipment and electronic components, alongside the development of software and the necessary skillsets to stitch everything together.
All this ultimately depends on policy support. With effective policymaking, private enterprises will move in to exploit new opportunities as they arise. Some of this is already in place. The revised Telecom Act of 2023 is forward-looking. The PLI scheme encourages domestic manufacturing of telecom equipment and electronic components, along with R&D (including software R&D). But PLI still requires significant financial support by way of incentives. Liberalisation of satellite broadband, easier management of street furniture and right of way permissions are other areas where policy has made a positive difference.
The 5G roll-outs by Airtel and Jio have been among the fastest and most comprehensive globally. The encouragement of 6G R&D is happening through initiatives such as the Bharat 6G Alliance, which brings together public and private entities, academia, research institutions and standards development organisations to enable the development of intellectual property in relevant domains.
Though this is only the beginning, DPI has enabled e-commerce, quick commerce, etc., and led to the launch of start-ups looking to ride the networks with innovative business models. Trade balance has also improved as handset manufacturing and assembly have taken off, and imports on this front are now closer to being matched by exports. Further indigenisation and more value-addition are desirable, of course. India contributes very little to global telecom equipment exports, and it has the potential to contribute much more as manufacturing climbs the value chain.
Success breeds demand. While the 5G uptake has been impressive, it has barely scratched the surface of the potential. The 5G user base could grow sixfold in the next three to four years, and business use cases may explode as telcos and other businesses find new ways to leverage generative AI. Much more infrastructure capacity will be needed to service the ever-rising demand for reliable, high-speed connectivity as this happens.
Enabling this will require further streamlining of regulatory processes, strengthening of frameworks for public-private collaboration, and more investments in ambitious projects such as BharatNet and the laying of submarine cables, to ensure that the digital ecosystem is capable of supporting technological advancements and multiplying network demands. The government also has to find ways to address the challenges posed by BSNL’s underperformance, while working out the level of support it is prepared to give the still-struggling Vodafone Idea.
Since its invention, telecom has always been a force multiplier for economic change. It promises to be even more so as we move to 5G and beyond. There is every indication that policymakers understand this and that private enterprises will respond positively, fostering an enabling ecosystem.