Building a Digital Bharat: How the Telecommunications Act 2023 empowers villages and spurs tech entrepreneurship

The Telecommunications Act 2023 of India, which was notified on 24th December 2023 , would prove to be a game changer for India. It would further boost the Digital India infrastructure, besides being a step forward towards making India an Innovation hub of the world.

Our past.
Let us take a step back to look at what India was in the past, when it accounted for 27% of the world GDP. Things were different then. People were not put into a strait jacket, with an alien thought process that the objective of any education system was to get a job at the end of the day. The common man then believed in entrepreneurship, and that was the secret of success of Indian businesses, including international trade etc. That was at core of the Indian economic ethos, before the era of physical and mental slavery that overtook the nation.

Things have reached such ridiculous levels after independence in the country, that the government is expected to employ people, instead of orienting and boosting the economy, when it is a well-known fact that a robust economy does automatically help create job opportunities. But then, Indian intellectuals at the helm, borrowing heavily from overseas economic models have pushed us back by a few centuries. Now, some provisions of the Telecommunications Act 2023 provide some opportunities for reversing this trend.

Before we discuss how this Telecommunications Act 2023 is going to be a gamechanger for the country, let us first try to understand what it is all about.

The Telecommunications Act 2023
Benefits
Let us first have a look at the potential benefits of this Act.

• Modernization and simplification. The Act aims to replace outdated colonial-era laws with a modern framework for regulating the telecom sector. This could potentially streamline licensing processes, encourage investment in infrastructure, and promote innovation.
• Spectrum allocation reforms. The spectrum allocation reforms in the Act provide opportunities for innovation, growth, and bridging the digital divide, which could lead to better utilization of valuable spectrum resources.
• Focus on user protection. The Act includes provisions for addressing user concerns like call-dropping, spam, and fraudulent activities. It also mandates stringent user verification through verifiable biometrics, which could help curb illegal SIM card usage. This would result in confidence in the entire ecosystem.
• Improved national security. The Act grants the government power to temporarily control telecom services in case of national security emergencies. This could help enhance preparedness and response to critical situations. Mandatory verifiable biometrics would further strengthen this process

There are some concerns too about the Act.

• Privacy and surveillance. Critics argue that the Act grants the government extensive powers for data collection and surveillance, potentially infringing on citizens’ privacy rights. The lack of strong independent oversight over these powers raises further concerns.
• Government control and censorship. The Act allows the government to block internet access and content without judicial intervention, raising fears of censorship and suppression of dissent.
• Impact on innovation and competition. The authorization system for telecom services introduced in the Act could give the government significant control over market entry and operations, potentially stifling competition and innovation.
• Biometric data verification. The mandatory collection of verifiable biometric data for new SIM card connections has raised concerns about data security and potential misuse of this information.

While the concerns can be addressed through public opinion and the legal framework in the country, the benefits far exceed the perceived limitations.

Now let us have a look at some specific facets of the Act which hold a potential for significant change.

A boost for satellite communications
In a country like India, with a big chunk of remote and inaccessible areas, satellite communication plays an important role in bridging the digital divide. The methodology for allocating spectrum for satellite communications in the Telecommunications Act 2023 is a significant point of discussion, introducing a shift from auctions to administrative allocation for some specific services including the Satellite based ones. This change has its own set of potential implications, both positive and negative.

First the positive ones.

• Reduced entry barriers. By bypassing expensive auctions, smaller players and start- ups in the satellite broadband field could find it easier to enter the market and compete with established giants. This could foster innovation and diversity in service offerings.
• Faster deployment. Administrative allocation can streamline the process of spectrum assignment, enabling quicker deployment of satellite networks and faster access to services for underserved areas, including the remote and inaccessible rural areas.
• Alignment with international standards. Most countries adopt administrative allocation for satellite spectrum, making India’s approach more consistent with global practices. This could facilitate international cooperation and technological partnerships.
• Targeted development. The bill allocates spectrum for specific services like in-flight and maritime connectivity, addressing crucial connectivity needs in underserved sectors.

However, some people have expressed their concerns about this aspect.

• Transparency and fairness concerns. Administrative allocation raises concerns about transparency and potential for favouritism in spectrum assignment. A robust regulatory framework with clear criteria and independent oversight is crucial to address these concerns.
• Reduced revenue for the government. Auctioning spectrum generates significant revenue for the government, which could be used for infrastructure development and other initiatives. Shifting to administrative allocation could lead to a decline in these revenues.
• Competition concerns. Some argue that administrative allocation gives established players an unfair advantage, potentially stifling competition and innovation in the long run.
• Uncertainty for existing players. Companies that have already invested in acquiring spectrum through auctions might feel disadvantaged by the new allocation method, creating legal and policy challenges.

Overall, the implications of the new methodology for satellite spectrum allocation depend on its implementation and the accompanying regulatory framework. While it offers potential benefits for access, innovation, and international cooperation, concerns about transparency, fairness, and competition need to be addressed through robust checks and balances.

Potential of Digital Bharat Nidhi for boosting entrepreneurship in India.

The Digital Bharat Nidhi, a dedicated fund announced in the Union Budget 2023, holds significant potential for promoting entrepreneurship across various sectors in India, particularly in the digital domain. Here’s a breakdown of its potential impact.

Direct benefits for digital entrepreneurs.

• Funding and investment in R&D. The fund aims to provide financial support to start- ups and MSMEs working on innovative digital solutions like telemedicine, e- commerce, digital education, and rural connectivity. This can help address the funding gap often faced by early-stage ventures.
• Infrastructure development. The fund is expected to support the creation of digital infrastructure like fiber optic networks, data centers, and community wi-fi hotspots. This will improve access to the internet and digital tools, creating fertile ground for digital entrepreneurship to flourish.
• Bridging the digital divide. Access to funding and digital infrastructure are major hurdles for rural entrepreneurs. The Nidhi can bridge this gap by providing financial support for setting up ventures and investing in rural connectivity, like fiber optic networks and community wi-fi hotspots.
• Capacity building and skill development. The Nidhi can support programs for training individuals in digital skills relevant to various industries. This will create a skilled workforce ready to contribute to the growing digital economy and fuel start-up ideas. The fund can also support training programs focused on equipping rural youth with digital skills relevant to their local context and potential business ideas. This empowers them to build tech-enabled ventures and cater to local needs.

Indirect benefits for broader entrepreneurship.

• Digitalization across sectors. Increased internet penetration and adoption of digital tools across various sectors like agriculture, healthcare, and education can open up new business opportunities for entrepreneurs catering to these specific needs.
• Market access and visibility. Digital platforms can provide entrepreneurs, especially those in rural areas, with wider market reach and access to customers beyond their immediate vicinity. This can boost their growth potential and create new job opportunities. The Nidhi can support the development of e-commerce platforms, logistics infrastructure, and digital marketing tools tailored for rural businesses.
• Enhanced transparency and efficiency. Digital adoption in government services and business processes can streamline operations, reduce corruption, and create a more level playing field for entrepreneurs.

Challenges and considerations.

• Effective implementation. The success of the Nidhi will depend on its efficient and transparent allocation of funds to deserving ventures. Clear guidelines and robust selection processes are crucial.
• Focus on inclusivity. Ensuring equitable access to the benefits of the fund across different regions, social groups, and genders is essential to avoid widening existing inequalities.
• Skill development ecosystem. Building a strong ecosystem for digital skill development and ongoing support for entrepreneurs beyond initial funding is crucial for long-term success.

Overall, the Digital Bharat Nidhi presents a promising opportunity to accelerate digital entrepreneurship across India. By addressing the challenges and ensuring effective implementation, it can contribute significantly to a more vibrant and inclusive entrepreneurial ecosystem in the country.

Empowering new ventures.

• Agri-tech and rural innovation. The fund can encourage start-ups offering innovative solutions for agriculture, like precision farming tools, online marketplaces for farm produce, and digital extension services. This can enhance agricultural productivity, connect farmers to markets, and create new opportunities.
• Rural-focused services. The Nidhi can empower entrepreneurs to address local needs through ventures offering telehealth services, online education platforms, digital financial services, and rural handicraft marketing platforms. This diversifies rural economies and improves access to essential services.
• Sustainable livelihoods. By supporting eco-friendly start-ups focused on renewable energy, waste management, and responsible tourism, the Nidhi can promote sustainable development and create new livelihood opportunities in rural areas.

Building an ecosystem.

• Collaboration and incubation. The Nidhi can foster collaboration between entrepreneurs, research institutions, and NGOs to build a supportive ecosystem for rural start-ups. This includes creating incubation centres, mentorship programs, and access to business development resources.
• Financial inclusion. Supporting digital payment infrastructure and financial literacy initiatives can facilitate easier access to financial services for rural entrepreneurs, boosting their ability to invest and grow their businesses.

Challenges and considerations.

• Reaching all the underserved. Ensuring the fund’s benefits reach all remote areas and marginalized communities requires tailored outreach strategies and targeted interventions.
• Long-term support. Beyond initial funding, providing ongoing mentorship, skill development opportunities, and market access support is crucial for the long-term success of rural ventures.
• Digital literacy and awareness. Bridging the digital literacy gap in rural areas is essential for individuals to grasp the opportunities presented by the Nidhi and actively participate in the digital economy.

Conclusions
Overall, the Telecommunications Act 2023 presents a mixed bag of potential benefits and concerns. While it aims to modernize the telecom sector and address some user issues, its provisions on privacy, surveillance, and government control have raised some concerns. However, the benefits and potential that its provisions like the Spectrum Allocation and Digital Bharat Nidhi hold immense potential in unlocking the entrepreneurial spirit of rural India of more than a billion people. By addressing challenges, fostering a supportive ecosystem, and promoting digital literacy, it can act as a game-changer for rural economic development and create a wave of innovative, sustainable ventures across the country. With a successful digital payment system, which has given blushes to some of the most advanced countries in the world , Digital Bharat could further showcase rural empowerment, entrepreneurial ecosystem, and a model for bridging the digital divide, to the rest of the world!

This article is authored by Vimal Wakhlu, Former Chairman & Managing Director, Telecommunications Consultants India Ltd. Views expressed are personal.