5G technology represents the next generation standard of wireless communication, connecting devices, machines, businesses, and people. What sets 5G in India and elsewhere apart is its ability to deliver higher multi-Gbps data 5G speed, massive bandwidth and network capacity, ultra-low latency, better availability and more reliability compared to any other mobile network.
Launching of 5G in India
Bringing in new era in technology, prime minister Narender MOdi launched the 5g telecom services in India on Oct 1,2022. The technology seeks to provide seamless coverage, high data rate, low latency and highly reliable communication system. 5G services are also expected to play a major role to achieve the economic goal of making India a $5-trillion economy by 2024-25. According to experts, 5G will have a cumulative economic impact of $1 trillion by 2035 and can deliver an additional GDP of $150 billion for the country, between 2025-40.
Benefits of 5G
• For consumers, 5G promises higher data speeds over 4G. At its peak, internet speeds on 5G could touch 10 Gbps, compared to the 100 Mbps peak of 4G.
• 5G technology offers latency as low as 1ms. For the unversed, latency is the time taken by the device to send packets of data and get a response. Shorter the latency, quicker the response.
• The arrival of 5G will also transform the transport and mobility sector. Using 5G, a network of electric vehicles (EVs) and charging stations can be established to help maximise the cost-effectiveness of the EV ecosystem;
• Next-generation 5G network will also aid the remote working more effectively. 5G-powered smart buildings can help provide more comfortable working environment for the employees, boosting productivity along with reducing costs for employers.
• 5G will also have a big impact in the safety and surveillance sector. 5G technology and its applications will enable remote control over disaster hit areas, live 4K feed from HD camera installed in public spaces and more. It will also help in minimising the role of humans in dangerous industrial operations such as in deep mines, offshore activities etc.
• Next-generation 5G technology will also have an impact on the way of production and distribution of goods. Applications of 5G in the manufacturing sector includes reduced costs, lower down time, minimum wastage and improve productivity. 5G is expected to bring the logistics cost to 5% from 13-14% at present.
Challenges 5G in India could face
• Low fiberisation footprint: We need to upgrade fibre connectivity across India, which at present connects only 30% of India’s telecom towers. For an efficient 5G India launch and adoption, this number has to double.
• ‘Make in India’ hardware challenge: The ban on certain foreign telecom OEMs upon which most of our CSPs depend means the country needs to encourage and boost its local 5G hardware manufacturing at an unprecedented rate if it needs to realize the 5G India dream.
• High spectrum pricing: At INR 492 crore per MHz, India’s 5G spectrum pricing is almost 7 times higher than the UK, and several times costlier than the global average. This will be of detriment to India’s cash-strapped telcos. Rationalization of this pricing is needed so that the government generates adequate revenue from the auction without hampering implementation plans for 5G in India.
• Differences in 5G bands: Given the fact that 5G works in 3 spectrum bands (low, mid and high frequency), each one has its own advantages and limitations. While the low bad offers great coverage, its speed is limited to 100 Mbps. Hence, it can serve commercial needs but not industry needs. The mid-band offers greater speed, but not a great coverage area and signal penetration. Lastly, the high band (mmWave) offers exceptional speeds up to 20 Gbps but is extremely limited in coverage. This band greatly enhances futuristic 5G technology applications like IoT and smart technology but will require considerable infrastructure. For a proper 5G launch in India, the allocation to various bands will have to be tightly balanced.
How will 5G affect the revenue of Telecomom Companies?
In terms of pricing of 5G technology and services at least, industry estimates suggest that 5G packages for customers will be similar to but not lower than 4G – in line with the telcos targeting ARPUs of Rs. 300 per month. This way, India telcos can encourage wider 5G adoption and quicker subscriptions, before charging a premium for value-added services once a fully-fledged user base and established 5G network speeds cement their place.
- The first one is the TRAI-suggested auction base price of 5G spectrum which the telcos are demanding drops down by 95%. Additionally, telcos also want to pay off for their spectrum allocation in a lengthy, staggered payment scheme.
- The second hurdle that telecom operators in India face is the mammoth investment required yet to deploy pan-India 5G networks in the next 5-6 years. Estimates suggest it to be to the tune of Us$7-10billion.
- Lastly, telcos are also sceptical of how effectively they can monetise the more advanced use cases of 5G such as virtual reality, live streaming, real-time gaming or automated cars – technologies that are still many years away from mainstream adoption in India.
Additionally, Indian telecom operators can target revenues from enterprise businesses and industries initially, given 5G’s propensity for delivering high-calibre services like network slicing, augmented reality applications, lower latency, etc. With 4G estimated to still remain sufficient for the general population’s needs for the next 6-7 years in India, there is a case to be made for earning from 5G-ready businesses, healthcare, education, smart cities and surveillances, government utilities, and manufacturing industries. Another area where telcos. can seize better revenues is by pushing 5G-mounted WiFi as an alternative to FTTH networks in order to achieve last-mile connectivity in the country.
