Digital Infrastructure in India Creating Digital Highways of

Digital Infrastructure in India Creating Digital Highways of Growth Presented By: Umang Das Chairman BIF General Policy & Regulation (GPR) Working Group

Contents Infrastructure is Becoming Digital Importance of Digital Infrastructure Spillovers Effects of Infrastructure on Digital Economy Challenges in Rolling Out Digital Infrastructure Way Forward: Creation of National Digital Grid Way Forward: Catalyzing Investments for Digital Infrastructure 2

Infrastructure is becoming ‘Digital’ Components of Digital Infrastructure Towers/ antennas (IBS, DAS, Elements viz. RAN, Small Cells, Transmission) Fibreways (OFC) Sat. Com Digital Infrastructure Wi-Fi & Public Wi-Fi Hotspots Wireline infra 3 Without a holistic and balanced play of all these, we cannot achieve the end vision of Digital India.

Importance of Digital Infrastructure As per NDCP • India's Digital Economy has the potential to reach 1 Trillion USD by 2025. • A recent study modelling Pune as a ‘smart city’ estimated that it can unlock an incremental value of 30% GDP valued at Rs 80, 000 crore over six years. • From Rapid expansion of Digital Payments to evolve into • This is for an area of 331 sq km and a population of widespread instruments of Access and Empowerment for 3. 5 million. more than a Billion Indians. • This study enabled the city to drive numerous digital • It would be critical to focus on Digital Communications service initiatives to capture the resulting growth Infrastructure - this will form the Bedrock of Next potential of 15% CAGR (Purushottam Kaushik, L&T). Generation Technologies. • And this is about just one city—imagine this • The Policy further aims to pursue Regulatory Reforms evaluation across the country. Innovation and Consumer Interest. 4

Spillover Effects of Infrastructure on Digital Economy Impact of Digital Infrastructure on GDP Impact of Broadband penetration on GDP Impact of Apps on GDP • Improving the digital infrastructure will help achieve the goal of trebling GDP to USD 7. 5 trillion over the next five years through increased usage of Internet 1 • Increased revenues from GST, license fee, SUC, spectrum auctions, corporate tax and property taxes • • Of all ICTs, broadband has the biggest economic impact 2. 5 to 4. 0 additional jobs for each new broadband job 2 GDP per capita growth is 2. 7 to 2. 9 percent higher after the introduction of broadband 3 Doubling broadband speeds adds 0. 3 percent to GDP growth 4 • Data based services or apps add for more value than just access to the internet. Apps contributed at minimum $20. 4 billion to India’s GDP in 2015 -165. Potential to have this value increase to $271 billion by 20206 Each user of Applications in India receives on average $249 of consumer surplus annually. Applied to the total population, this number stands at $74 per capita 7 • Sources: 1. icrier. org/pdf/open_Internet. pdf 2 Broadband strategies handbook, Kelly & Rossotto, 2012, available at https: //openknowledge. worldbank. org/handle/10986/6009 3 Broadband Infrastructure and Economic Growth, Czernich et al, 2009, available at https: //papers. ssrn. com/sol 3/papers. cfm? abstract_id=1516232 4 Socioeconomic 5 6 Estimating 7 The effects of broadband speed, Ericsson, 2013, available at https: //www. ericsson. com/res/thecompany/docs/corporate-responsibility/2013/ericsson-broadband-final-071013. pdf the value of new generation internet based applications in India, Kathuria et al, 2017 available at http: //icrier. org/pdf/Estimating_e. Value_of_Internet%20 Based%20 Applications. pdf economic and societal value of Rich Internet Applications in India, Arnold et al, 2017 Most of Spillover Effects of Digital Infrastructure Accrue to State and Local Governments 5

Key Challenges in Roll-out of Digital Infrastructure Operational Challenges Funding Issues • • • Obtaining Right of Way High Ro. W Charges Alignment of State Policies with Ro. W Rules 2016 Lack of Harmonized Policy Implementation Security High Taxes & Levies • Status of sector • Funding constraints Challenges relate mainly to Ro. W clearances and funding 6

Way Forward: Creation of National Digital Grid Establishing a Collaborative Institutional Mechanism between Centre, State and Local Bodies for Ro. W, Standardisation of Costs and Timelines and Overcoming barriers to Approvals. § Appointment by Centre of Senior Empowered 'Digital' Officer at State Headquarters with Clear Terms of Reference including Review Mechanism, and Dispute Resolution Empowerment § High Level Quarterly Review at Centre with States and Selected Local Bodies. § Implement Broadband Readiness Index and Review state-wise Performance in quarterly Review Meets as also Institute Awards for High Performing States. § For Mobile Tower Infrastructure § Accord Accelerated Permission for Telecom Towers at Government Premises. § Incentivize Green Telecom Technology Implementation at Infra Sites. § Allow IP 1 Registration Certificate amendment to allow sharing of Active Infra with provisions to ensure that the Permission is only for Offering Infra Sharing only for Licensed Service Operators and any Violation will be liable to Penal Action. Sharing of Infra should be not only encouraged but be made mandatory to achieve National Objective of rapid Roll Out and Cost Optimization. § Promote Next Generation Access Technologies by also promoting Wireless Backhaul Technologies and allow usage of E and V Band usage for Backhaul purposes only in line with International Best Practices. § Leverage Existing Infrastructure § By focusing on Fiberisation of Towers § Setting up a Centrally Monitored Single Window to Monitor Tower and Fiber Assets and proper usage of the same in terms if sharing and availability as also QOS. § Seminars/Workshops to be organized in Critical States by Do. T Top Management with State Government and Local Bodies Top Level Bureaucrats to ensure alignment of State policies with Do. T Ro. W directives. Education & Awareness programmes should be organized similar 7 to EMF awareness campaigns organized by Do. T.

Way Forward: Catalyzing Investments for Digital Infrastructure • TRAI have estimated a requirement of USD 60 to 70 billion (INR 5 lacs Crores) for 5 G in India • TAIPA has assessed INR 1 lac crore for creating Digital Infrastructure over next 5 years for 5 G ecosystem § Formally accord Digital/Telecom infrastructure status of critical and essential infrastructure § Prioritize access to low cost financing through International Financing Institutions viz. ADB § Create a Policy Framework which is modelled on Public Private Partnership § Play an active lead role in providing the Seed Capital § Provide low cost 'INR' financing to the industry players § Set-up The Digital/Telecom Fund § It should be a Telecom Bank with Public-Private Board of Governance. § Implement concept of input Line credit for avoiding double license fees and by treating Towers Infra as Plant and Machinery (currently tower is treated as a building) § Promote Ease of Business in Terms of Ro. W Permissions and Approvals § Unbundling of different layers of Telecom viz. infrastructure, Networks, Services and Application Layers as it will facilitate financing of individual layers. 8

Way Forward: PPP Model for Catalyzing Investments 9

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