Mobile phone telecommunications towers stand. (Photographer: Dhiraj Singh/Bloomberg)

Telecom Sector Challenging, Yet Offers Opportunities, Says Secretary

The “brutally challenging” Indian telecom market has only seen the beginning of many disruptions, yet it offers ample growth potential to not only draw massive investments but ensure profitability, Telecom Secretary Aruna Sundararajan said today.

Sundararajan said that $100 billion sectoral investment enshrined in the national digital communications policy is not an over-estimate and may well turn out to be less-than-adequate in the wake of new age technologies and the advent of 5G.

Sundararajan said that while the Indian telecom market is “vibrant and exciting”, it is also “brutally challenging”.

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Speaking at a panel discussion on 'Digital Infrastructure for Transforming India' organised by Broadband India Forum, she pointed out how China and the world at large are committing huge investments in the digital communications space, given that nearly everything—from education and healthcare, and livelihoods to entertainment will be delivered on the digital highways.

“The global spend on telecom is expected to touch $4 trillion, and China is spending around $188 billion every year on digital communications infrastructure,” she said. “For 5G alone, China's budget is expected to be of the order of $500 billion. Estimates suggest that impact of 5G on global GDP can be a potential doubling of GDP and so countries are infusing investments in telecom infrastructure.”

Sundararajan asserted that digital infrastructure has to be the crux of India's growth strategy as no other sector can match its positive spin-off on productivity and individual well being.

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“It is time for decision-makers to engage in serious conversation on how to enable $100 billion investments in digital communications infrastructure,” she said.

Sundararajan said that a workshop would be organised soon to sensitise the states on their roles in India's digital narrative. “The workshop will be held to sensitise the States on what is expected of them, how to benchmark states on and the key parameters thereof.”

Addressing the event, Niti Aayog CEO Amitabh Kant said digital transformation would hold the key for India to aspire for 9-10 percent economic growth sustained over three-decade period or more.

“If we want India to grow at the rate of 9-10 percent, the way forward is digital transformation and providing digital backbone,” Kant said. “We're growing at 7.5 percent and the challenge is to grow at 9-10 percent year-after-year for three decades or more. The answer lies in digital infrastructure for sustained growth and transforming India.”

He said that the key objective before India is growing to $1 trillion digital economy by 2022, overcoming challenges of connecting the unconnected, and increasing fiberisation of mobile towers (currently at abysmally low levels compared to markets like the U.S. and China).

While India has a massive base of mobile phone users, the internet and broadband penetration remains low.

“If you look at internet penetration rate you would find that barely 48 percent of Indians have access to it, while true broadband has reached only about 33 percent. So a significant part of the country remains unconnected either through the benefit of mobile or internet,” he said calling for a three-fold increase in digital infrastructure in five years.

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