Microsoft CEO Satya Nadella’s plans for the ambitious Digital India programme include an experimental technology pilot in Prime Minister Narendra Modi’s constituency of Varanasi.

The software giant has chosen the pilgrim town in Uttar Pradesh as the venue for a project to fund local entrepreneurs aiming to build devices that can overcome India’s bandwidth crunch, according to Mr. Nadella.

Idle spectrum



Mr. Nadella, who was in Mumbai to introduce Microsoft’s Future Unleashed business partnership programme, said on Thursday that his company would use idle television broadcasting spectrum to operate devices developed by the local entrepreneurs.

Varanasi is among Microsoft’s two pilot projects in India to provide low-cost Internet to villages, the first being a government school in Srikakulam district of Andhra Pradesh.

“The reason why we are piloting it is to take the technology risk out and to show that this tech works and to show that this economic model allows you to deliver it,” Mr. Nadella said. “But my hope here is not for Microsoft, I want some local entrepreneurs to do it.”

Microsoft is not the only global technology major to venture into building a low-cost Internet infrastructure. Google received permission from the Indian government earlier this month to provide Internet using large balloons that float 20 km above the earth’s surface. Facebook announced in October that it would launch a satellite next year in collaboration with the French company Eutelsat to provide low-cost Internet to 14 sub-Saharan African countries.

Microsoft wants to help build low-cost Internet infrastructure through a slightly different approach. “Because I feel that unless and until you have a sustainable model which local companies can deliver, I think that all these big ticket schemes won’t truly work. And that’s the kind of work we are pushing,” Mr. Nadella said.

Earlier in the day, Maharashtra Chief Minister Devendra Fadnavis announced that his government was working with Microsoft to build “smart villages” in the State. “We plan to start work on building 50 smart villages by the end of 2016,” he said. “Arinsal will be the first smart village. It was infamously known as the State’s malnutrition capital. We are changing that.”

Mr. Nadella said he was “optimistic about the rate of change [of development] in India.” “The progress we have made in the last 12 months of being able to realise some of these dreams, of saying let’s open up these new digital factories and data centres, speaks about what is possible in India because of all the structural reforms happening. We want more of course… [but] I am optimistic about the rate of change that’s happening, and [about] the rate of adoption.”

He spoke about how the Indian e-commerce story was no longer about start-ups, but about mega-scale. “Today, Indian e-commerce companies are competing with Amazon,” he said. “There is tremendous energy in the Indian start-up economy, but I don’t look at valuations of start-ups; instead, I look at the quality, the impact, and the realisation of ideas.”

He said he was impressed with the culture of innovation in India, and how it reflected that of Silicon Valley’s. “Products are the manifestation of an innovation culture,” Mr. Nadella said. “As CEO, it is not just my job to push an innovation culture, but it should be the case with every employee.”

Mr. Nadella said his optimism about India came from what is happening in both the public and private sectors. “As a company, Microsoft is in it for the long term,” he said. “Because when you think about the country and about the trajectory, here is what I look at — what is happening not only in the government, but what is happening in the private sector, what is happening in the broader economy as a whole, and that’s where my optimism comes from.”