The year 2019 has seen huge developments in wireless communication networks. The biggest and most talked being the 5G technology that's said to revolutionize the world around us in ways we cannot imagine. Unless you're living under a rock, you might know that the next-gen communication network is touted to offer up to 20 times faster speeds compared to 4G.
5G In India
The technology will not only make the internet speed extraordinarily fast but will also serve as a catalyst in the formation of a highly advanced technological society. Various industries like automobiles, healthcare, IoT, AI, VR, among others will be hugely benefitted with 5G.
That being said, India doesn't seem like the front runner in this derby. Although the government has major plans to deploy 5G networks, the country is yet to fully adopt the 4G network which makes it even more difficult to introduce the latest iteration of the technology. With 5G smartphones paving the way into the market, the readiness of the Indian telecom sector stands in question. Let's understand this in detail.
5G Developments In India
The Telecom Regulatory Authority of India (TRAI) plans to deploy 5G by 2020 in India, just like the rest of the world. At least that's what its white paper on 'Enabling 5G in India' emphasizes. It talks about the investment, architecture, and the potential use cases of the upcoming technology.
The Department of Telecom (DOT) has also assembled a committee that will recommend the scope of 5G trials in India. It will also suggest the pricing and size quantum including other aspects. Besides, there's a three-year program under the 'Building an End-to-End Test Bed' moniker that was announced in March 2018 to research about 5G, within a budget of Rs. 224 crore.
The panel suggested that for active trials, spectrum license should be allotted for up to 12 months; however, DOT said that the spectrum can only be provided for around three months for trials.
What’s The Bottleneck?
To make the 5G rollout possible, telecom operators in the country need to pay the spectrum charges. This is exactly where the problem lies; the telcos are already buried under huge debts which leave them with no money to buy the spectrum for 5G networks.
As per TRAI's recommended base price, the 5G airwaves will cost Rs. 492 crore for 1MHz and a minimum of 20MHz should be purchased. To acquire the spectrum, each telecom operator will have to shell out a sum of around Rs. 10,000 crores for 20MHz and up to Rs. 50,000 crore for 100MHz. These prices are higher considered international prices. Considering the financial condition of the telcos, COAI (Cellular Operators Association of India) asked TRAI to trim down the prices. However, TRAI recently announced that it has no plans to reduce the prices for 5G auction, which is likely to happen in April-May 2020.
The prime cause of the debt is the disruption that Reliance Jio brought to the industry by offering dirt-cheap data plans. This pushed other operators to lower their prices. The cheap prices were received well by the consumers; however, it did affect the ARPU (average revenue per user) of the telcos drastically.
While Jio has managed to post profits, Airtel and Vodafone-Idea suffered huge losses. Airtel lost Rs 23,044 crore in the second quarter of 2019, while Vodafone-Idea hit the rock bottom with a loss of whopping Rs. 50,921 crore during the same period. After facing losses that might force these companies to shut their operations in the future, investing money in the deployment of 5G seems like a long shot.
5G Trials In India
Despite telcos being debt-ridden, the 5G trials have continued to take place. The government-owned BSNL joined forces with Ericsson and Ciena to develop new 5G use cases in the agriculture and education sectors, especially for rural areas.
Swedish telecom gear maker Ericsson believes that 5G technology might make its way to India by 2022. The company also noted in its mobility report that 5G will account for around 11 percent of the total subscription in the country by 2025.
Huawei and ZTE were also said to participate in India's field trials; however, after the US-ban over security has put both companies almost out of contention. The Indian government has conveyed that data privacy is its prime priority and it will not compromise on the security of networks.
Additionally, OnePlus also has plans to join hands with Qualcomm for 5G trials in India. Besides, the company has confirmed that it will be exporting 5G smartphones. This will help the country boost revenue from local exports and production. OnePlus is one of the first companies to launch 5G devices and is also testing its 5G-ready technology with Indian carriers at its R&D center in Hyderabad.
Do 5G Smartphones Make Sense In Indian Market?
A lot has been happening around 5G in India; however, the country is yet to witness the launch of a 5G-ready smartphone. Well, the reason is quite obvious. Since there are no 5G airwaves allotted to telecom operators, it wouldn't make sense for OEM's to produce 5G-enabled smartphones compliant to Indian networks.
Several manufacturers showcased their 5G phones at the Indian Mobile Congress (IMC) that happened in October but stayed mum about their availability for the Indian market.
Another reason for 5G smartphones not coming to India is the budget-conscious mindset of consumers. The first wave of 5G-ready phones cost equivalent to the flagship devices. In a market where most buyers seek products below Rs. 20,000, spending on a device that couldn't run at its full potential is futile.
Despite the fact, smartphone makers have shown interest in launching 5G smartphones in the country. Realme, which has received an overwhelming response from Indian customers, has announced to launch a 5G phone in 2020 in India. While it might not be as budget-friendly as the company's other smartphones, it might push telecom operators to invest in the development of 5G.
Is 5G Coming To India Anytime Soon?
Unfortunately, the answer is no. Indian users might have to wait long enough before trying out the new technology as the base price for the spectrum is very high and telcos are facing financial crises. Besides, the country is yet to fully adopt 4G, which makes rolling out a new technology even more challenging.
Taking all these factors into account, it's safe to say that India won't witness the rollout of 5G technology for the next few years. The country will have to wait and watch 5G revolutionize the world around it before it could leverage the technology for its own good.
But there's a slim chance that some telecom operators might collaborate with OEMs to make the 5G rollout possible in the country. Also, if the prices of the spectrum are reconsidered by the government, we might see the development pick up the pace.
Moreover, the era of low tariff prices seems to be coming to an end, as major telcos have surged their tariff prices by up to 42 percent. This will help them boost revenue, ARPU, and clear their dues, helping them bring 5G deployment closer to reality in the country.