Fiberising towers is an expensive affair. It requires digging up trenches across each city and town in the country and connecting the towers with optic fibre cables. The actual cost of digging a kilometre and laying optic fibre cables, which companies like Sterlite Optical do, is not expensive—it costs about ₹6 lakh-₹10 lakh. But, companies will have to pay an additional right of way (ROW) to municipalities and city governments, which costs up to ₹1 crore per kilometre in high mobile markets like Mumbai.

Currently, an estimated 35% of the towers in the country are fiberised and even in the metros there are pockets which still need to be done. That is one of the explanations why data speeds across even a small patch of area vary a lot. In a square kilometre, one tower may be fiberised, while another may not be. At current costs, tower fiberisation can alone cost companies ₹40,000 crore as they have already done the easy locations and to guarantee a ubiquitous service, they have to ensure even the towers that are further away are modernised.

Already, the government has postponed the testing phase of 5G by a year, as several formalities including test spectrum and certifying equipment vendors were delayed. That coupled with the inability to invest in both fiberisation and new radio and software for 5G threatens to slow down the pace of technology advancement in the sector.

What can be the social or economic cost of such a delay? Though India took to mobile telephony quickly, the unavailability of the latest generations of later generations, especially 3G and later 4G, developed several businesses slowly. Even large companies—Airtel, Vodafone and Idea expanded their 3G and 4G networks slowly and the economic loss that caused was quickly visible when Jio launched the latest generation services. For phones, the smartphone market boomed in the country. Apple became a $3-billion business, while Netflix recently announced that it has made a small profit in India. In fact, despite the economy slowing down on the broader front, I will wager a bit that there has been mini-boom of sorts thanks to the rapid growth of several businesses, because of the advance in advance in telecom services, especially availability of 4G.

Therefore, the decision to resolve the telecom tangle, should not just focus on what the government will lose immediately but the loss to the economy that will accrue from not being at the top of the digital game. It is increasingly become evident that digital services will be the employers of the future and with a huge young population, a short-sighted decision can stymie the growth of our economy in the near term.

Sterlite Optical

Telecom losses: India’s digital advantage at stake