Spectrum shortage stares at 'Digital India' initiative

Before the implementation of Indian Prime Minister Narendra Modi's $17 billion Digital India initiative, the non-availability of licensed spectrum for service providers cannot be ignored.

The Digital India initiative launched by Prime Minister Narendra Modi in July this year is one of the most ambitious plans of his government. Many IT companies and other organisations have vowed to be part of this 1,13,000 crore rupee ($17 billion) project.

Under the project, the country's digital infrastructure is all set to get a facelift as the government intends to increase mobile connectivity and public access to the internet across the country, including 500,000 villages and 500 railway stations through high-speed networks. It also seeks to make government services and access to healthcare available electronically.

Global IT majors like Microsoft, Google, Qualcomm and Oracle have already extended their support to the project. While Microsoft CEO Satya Nadella has assured Narendra Modi that he would bring internet connectivity to 500,000 villages, Qualcomm's Paul Jacobs announced a $150 million fund to boost Indian startups.

In an interview with CNBC India, Oracle's President for EMEA and Asia Loic Le Guisquet reinforced his company's support for Digital India initiative. "We are absolutely committed, very engaged at many levels in the government and in the states to support that ambitious programme," he said.

Oracle is already working with 20 Indian states on various initiatives in areas such as education, police modernisation, and government financial management including treasury management and commercial tax, among others. It is also working with the national government on its "Smart Cities" programme. "We are well-positioned to aid India in its ambitious effort and putting all that muscle behind Digital India," Le Guisquet added.

Facebook has joined hands with the government-owned Bharat Sanchar Nigam Limited (BSNL) to create Wi-Fi spots at 400 places in rural areas across the country, and Google's CEO Sundar Pichai offered internet connectivity at 400 train stations. Modi met the leaders of these IT majors during his visit to the Silicon Valley in the US in September this year.

While the project looks good on paper, the main bottleneck in its implementation is to make available spectrum to the participating entities. One should not forget that emerging technologies require greater access to and usage of spectrum, and for projects like Digital India, the government should put all necessary facilities in place to take advantage of new technologies for the social and economic development of more than half of its population who live in villages.

The non-availability of licensed spectrum for service providers in India -- which is much less compared with the availability in developing economies like Bangladesh (37.4 MHz), Brazil, and China -- and even the growth of spectrum is very limited in the coming years. Consider the chart for total licensed spectrum available in various countries (in MHz) as follows:

Country Current Pipeline Hz/Subscriber
USA 608 55 2.1
Australia 478 230 22.8
Brazil 554 0 2.0
China 227 360 0.5
France 555 50 9.3
Germany 615 0 6.2
Italy 540 20 5.9
Japan 500 10 3.3
Spain 540 60 11.8
UK 353 265 7.9
India 221 10 (estimate) 0.2

Source: Federal Communication Commission (US), Cellular Operations Association of India (COAI) and subscriber data from World Bank.

This is due to insufficient bands for the growing mobile demands, and despite a spurt in the growth of smartphones and tablets in the country, the service providers are unable to ensure proper connectivity and have been asking the government to adopt a more liberal policy. India has very low capacity at 0.2 Hz per subscriber.

Another issue that the operators have been demanding the government look into is the cost of spectrum, which said to be 25 times more than in developed countries like the US, France, Singapore, Germany, and Spain. With the licences given only for 20 years, the companies are unable to make good profits.

The government should act in double-time to settle these issues -- if not, the initiative will remain Modi's dream and will not be translated into reality.