Indian Telcos to Dilute Digital Divide between Rural and Urban Areas

Though sky is the limit, the urban wireless teledensity reached 124.31% and multi-SIM users are declining, the Indian telecom service providers are now looking for rural expansion as rural wireless teledensity was just 57.89% (Data at the end of December 2024).

Rural connectivity is now concentrated on access to OTT media, use of social media, content creation over different sites/apps, UPI payments. But data usage is still limited, and in coming days the usage may go sky-rocketed with carpet-coverage. In short as you offer, people will grab it more. 

For Jio, it has an advantage that it started with 4G and therefore Jio's 4G presence is quite better than the competitors, as both Airtel and Vi had ditched their 3G operations, and looking for 2G sunset which can't be done before 2027 and brought 4G and 5G in selected pockets where revenue generation is high. 

In a different note, Jio's satellite arm's another partner - SES raised EUR60 million (US$65.4 million) with European Investment Bank’s global arm EIB Global and the European Commission for a project to provide satellite internet connectivity leveraging SES’s O3b mPOWER medium earth orbit (MEO) satellite network to remote rural areas in Central Asian countries like Kazakhstan, Uzbekistan, Kyrgyzstan and Tajikistan. 

Back in 2023, Airtel launched 'Rural Enhancement Project' to dilute 'Digital Divide' between urban and rural markets. Gujarat, Madhya Pradesh, Kerala, West Bengal, Maharashtra, and Jharkhand have been amongst the big focus regions for Airtel. In the Q3FY25 meetings, the company told that it reached 89,000 villages with deployment of 43,000 sites in last 2 years. To overcome the limitations of traditional fiber and microwave backhauls, Airtel is using Free-Space Optical Communications (FSOC) in Karnataka, Maharastra, Kerala and Tamil Nadu. Airtel launched 5G along with Jio on October, 2022 and by September 2024, Airtel's 5G-NSA network reached 1,40,000 villages while 4G coverage extends to more than 8 lakh villages across the country. 

India's third telco, Vi, though slow on 4G roll out due to cash crunch, is now looking for aggressive 4G expansion and 5G roll out. In October 2024 Vi roped in Samsung, Nokia and Ericsson for fast network upgrade to all 22 circles of the country. The company has aimed to launch 5G in 17 circles by March 2025.  Vi learnt from Airtel's successful rural network expansion between 2023-2025 and in these 17 priority circles the company targets to bring superior 4G-LTE coverage in both rural and semi-urban areas. 

Well not only the private players, Indian government is working on rural digital drive since 2011. Apart from state-owned BSNL's huge network across the rural areas, Telecom Ministry of India approved creation of National Optical Fibre Network (NOFN, now BharatNet) to provide broadband connectivity at the Gram Panchayat (GP) level by connecting block headquarters (BHQs) to GPs by using existing fibre of Central Public Sector Undertakings (CPSUs) such as Bharat Sanchar Nigam Limited (BSNL), RailTel Corporation of India Limited (RailTel) and Power Grid Corporation of India Limited (PGCIL) and laying incremental fibre to bridge the connectivity gap up to the GPs. In 2017 phase 2 of BharatNet was started. To execute this project Govt. of India established a special purpose vehicle (SPV) called Bharat Broadband Network Limited (BBNL, https://bbnl.nic.in) on February, 2012. As on 13.01.2025 2,14,323 Gram Panchayats are connected through the BharatNet project and 6,92,676 Km of OFC has been laid. Additionally, 12,21,014 Fibre-To-The-Home (FTTH) connections are commissioned and 1,04,574 Wi-Fi hotspots are installed to ensure last-mile connectivity. 

Last but not the least, Satellite internet via Low earth orbit (LEO) satellites which can reach anywhere, can be a tool to bridge the gap between urban and rural digitalization. Both Airtel and Jio have created their own ventures - Eutelstat OneWeb and Orbit Connect India and managed to get necessary papers but practically they have not launched services anywhere in the world. Vi is also in talks with Starlink and Amazon Kuipers to bring satcom in the country. 

Elon Musk backed SpaceX's satellite broadband services, Starlink with its 6500+ LEO satellites are already active in more than 100 countries and data speed more than 100Mbps. Starlink has yet to receive government and regulatory clearances to start commercial services in the world’s second-largest telecom market after China. The company plans to set up three gateways — in Mumbai, Pune and Indore — and one point of presence in Mumbai to cater to the India market. 

However Starlink is not affordable option for India, when compared with data tariff of Indian 4G/5G services. Globally satellite internet plans from Starlink and other satcom companies range between $10-$500 per month (translates as INR 1000-43,000), with additional one-time hardware costs of $250-$380 (INR 20,000-35,000). Well we can only hope that this cost might came down for big market like India. 

Also satcom could not match 5G in India, as India got fastest 5G expansion, all thanks to Jio and its 5G-ready greenfield LTE network. Though 5G is not properly monetized by the service providers (in India and globally), nearly 30% of Indians are using 5G data (and voice) within about 2.5 years. 

In short, the future is bright!