Sunil Mittal on 5G ecosystem, crypto & digital economy driving GDP growth

How will technology & connectivity drive India’s future?

Building hundreds of billions of dollars of real infrastructure on the ground is going to take us long years. So how do we accelerate our growth which is predicated on very strong infrastructure availability? I would say that is where the digital infrastructure comes into play. Common people on the streets holding a smart phone in their hands and hopefully in not too distant a future, wearables on their bodies will start to be connected to the global ecosystem of providers of healthcare, of education, of general wellbeing and more importantly connect them to the markets domestically and worldwide for business or professional fields.

The beauty of India is in its scale. Can you imagine if India were to be providing the connectivity or digital solutions at $50-60-70 a month, we would have had only a sliver of population enjoying the benefits and would not have been able to democratise the benefits of digitisation. At $2.5-3 today, we will have tons of data guzzling capability, full connectivity and devices that will talk about our health and education provision, ecommerce to payments!

That will make a dramatic difference to our acceleration. So what do people want? We want to be in the rural areas and yet be connected to the global ecosystem. We want the best education for our children, medical care for the elderly and children when they get sick and want to be able to receive and send money. We should be able to procure items through the net and make proper payments and if required quality checks. All this is now eminently possible through digital infrastructure. Cost per transaction has fallen by factors of hundreds of x downwards. What does this mean? With limited amounts of money that we have as a mid income country, we will be able to access and benefit from all the variety of services that one is expected to get for affluent, rich people in urban centres.

That to my mind is the dramatic change that we will see because of the support of digital infrastructure in our country and that is why the JAM trinity that the prime minister introduced and supports very strongly has made all the difference to allow our 1.3 billion people to be connected to the essential needs of life.

In India, how do you see this technology evolving because there are a lot of companies including yours which are looking at this space very actively?
Sunil Bharti Mittal: The Holy Grail for my industry over the last three, four decades has been to connect every individual on earth and regretfully despite huge effort by the industry collectively across the globe, there are still a large number of people – over two billion people – who are not connected to internet. Even in India, nearly 50% of people are not on the broadband highway. That is not because of connectivity. 4G and 5G will deliver connectivity to 90% of Indians on broadband networks, but there will still be 5-10% of people in India and more than 40-50-60% in Africa will not be connected. Even in places like the US, UK, the Nordic countries, almost in every country in the world, there will be pockets one cannot reach a radio network.

For example, a terrestrial radio network cannot be brought today into the deep deserts of Rajasthan, into Himalayas facing the borders with China, into the Gir forest or indeed the oceans and of course while we are flying between Delhi and Mumbai, staying connected on high speed systems is not possibly by terrestrial networks, much less fibre connectivity which is still far and about between urban centres and rural areas.

So how do you reach these people? The only way to provide connectivity into these areas is through satellite. And the current geosynchronous satellite systems or geo systems are too far at nearly 36,000 to 40,000 kms. They serve the broadcasting needs. They serve the slow snail pace broadband but they are not in a position to serve high speed broadband connectivity which is required for today’s smartphones and the needs of people.

That is where a Leo Constellation can do the job. Any place above 50 degrees on the globe is already connected on One Web satellites, services are in play in Alaska and Canada just now and the results are absolutely amazing. The high speed, the low latency people who are using those terminals in their hamlets, villages, far flung areas are connected as you and I are connected in cities. So satellites will become one more medium to really achieve the same objective that I just spoke about earlier of connecting people to the global digital ecosystem.

Going forward, can we expect a much higher contribution from the digital ecosystem or the digital economy in the overall GDP growth in India?
I would say digital infrastructure is relevant during good and bad times. It is one of those defensive sectors which go on when the other parts of the economy start to slow down or struggle with growth factors. Even during the pandemic, the traffic moved from commercial centres to homes and the companies all across the globe and especially in India did a fabulous job of ensuring seamlessly moving network dimensions towards the home traffic and were able to handle the massive surge in traffic. The consumption did not go down.

Coming out of the pandemic we have not seen again a surge of traffic going up, it has got rebalanced again into commercial and domestic centres. but the overall consumption pattern keeps going up. So I would say digital infrastructure is really just starting in some sense, there are so many new use cases that are going to be experienced and witnessed by people that you will see an acceleration of the digital business. So digital business in itself and those connected with the digital form are definitely going to gain. Use cases are only up to your imagination. I am wearing a wearable which tracks my entire day and night, this stays with me all day and night and I can tell you the benefit of just putting a little band on my wrist is enormous; it just tracks what I have done all day, how I have felt all day, how I have slept in the night.

Can we say that 5G when it rolls out completely, it is going to be a complete game changer? What is your vision or your understanding of the 5G ecosystem or an economy which is powered by a 5G network?
What is 5G? What does it do for us? It provides us massive capacities which means suddenly from this video call I could be virtually standing in front of you in a hologram form. The latency which I am sure the current video must be experiencing completely goes away. Doctors sitting in urban centres having a machine in a remote small village will be able to operate on patients seamlessly without worrying about any extra bleed or not putting a stitch in time or not being able to see the real life experience going on there on the patient, all that changes.

There are going to be multiple use cases when we will start to see flying taxis, drones all over us in the sky and that is what you have to conjure as an image and work towards creating those use cases to see the power of 5G. 5G will give a faster download of videos within milliseconds and we will be able to experience your videos much better. But I would say that is really the base part of it.

I am more excited about what it can do. Today our arms fleet fighters jets for example have to communicate with each other in emergencies. One cannot do it on a geo-sat base network. We will have to do it on low latency high speed networks. So there are going to be massive opportunities which will be developed by our friends in the digital ecosystem. How they use this high speed, low latency will be up to the imagination.

We are seeing some early experiments in the western world, in Korea, in Japan, in Germany where industrial undertakings are now putting together captive networks in cooperation and collaborations with telecom companies and they are enhancing their productivity. They are enhancing the quality of their product and reducing their price to the customer dramatically. So I would say 5G is important and that is why we keep on requesting the government to make the 5G an enabler for 100 other things that will develop in the country to keep the spectrum at affordable pricing, to not load the industry too much because it is a very highly capital intensive industry. In the end, we will deliver to this country a very high quality 5G network with high speeds, low latency and the ability to slice and dice the network for individual needs.

So are you suggesting that we need to look at the spectrum pricing or the reserved pricing for 5G rollout and make it more affordable for the operators as well as the end users?
Absolutely. Let us put that money into more rollouts. Let us put more faster radio networks, cover more cities in the shortest possible timeframe, rather than getting burdened by the spectrum cost and then slowly rolling out networks. I would say the multiplier impact that are faster, high speed, low latency network can have for the country is many times more than what can be achieved by picking up some money upfront.

What is your suggestion in terms of how India needs to install a solid regulatory framework which enables technological evolution and has enough safeguards in place?
Regulation almost always lags technology; this is universal. Technology moves at a rapid pace and branches out its own way and creates subsets of technologies which the regulatory process can never capture in one go.

In India, the government has done well now to look at privacy laws, look at data localisation, ensuring customer consent. Those basic blocks are now in place and we will keep on fine tuning it as technology shifts left, right or centre. But by and large, that will only get fine tuned as we go forward. But there is now a race going on to a very different place and suddenly we are seeing a threat to fiat currencies.

When it comes to these sovereign legal tender, suddenly there is a cryptocurrency which you can go and buy with rupees and transfer it at will through a wallet anywhere in the world to do what you want. I think it creates a serious problem and the finance minister when she raised the point in Washington in the last few days about need for global action or a global coordination to deal with crypto issue, is not wrong because in a digital fashion, it is like printing money. So suddenly there are people out there who are going to be printing money competing with nation state and fiat currency. There needs to be some envelope around it and therefore it is no surprise that the whole globe is currently fretting about it because in the end, using currency notes and today’s old ways of transferring money around the globe is going to go away.

The world will move to cryptocurrency. The question is how do nation state legitimise it, how is there a global order to ensure that these transfers happen in a safe environment and the wrong people do not get access or benefit from this so called cryptocurrency which in some form or shape means you cannot trace it, you cannot track it. KYC is one of the biggest initiatives around the globe and opening a bank account is not the same as it used to be when we were growing up. I would say when you go into these crypto wallets, you move forward into a new digital age of currency and the regulation will have to catch up.

I know there is work going on in RBI at a feverish pace, in governments with the Fed and FSA in the UK, to put the arms around this cryptocurrency. Right now it is partially understood but in a very large part not understood and that is to my mind a fear that there may be some very hard actions by the nation state to start to make it not legal going forward and that needs to be protected.

It is a fine technology, it needs to be protected and put to the use of mankind so they can be safe. But for that, the governments need to catch up.

As an entrepreneur, what will it take for India to produce the next Apple or Google or companies of that scale and size?
I think India is very fast catching up with the globe. If I go back to my younger days of entrepreneurship any company which had Rs 100 crore of sales and Rs 5-7 crore of profit was considered a huge company. Today when young unicorns are discovered by investors, a few thousand crores looks like loose change. So India today has come to a point where it is producing multi-100 billion dollar companies. There are so many companies which are in that bracket now at the high end.

There are companies in the tens of billions of dollars and my own view is that if we are comparing with Google, Apple which are in the US where tens of billions or hundreds of billions has been there for a long period of time, give India 10-15-20 years and we will start to see a 100 billion dollar level companies in scores. Probably half a trillion dollar company or a trillion dollar company will be emerging out of India, hopefully in my lifetime.