Is India Ready For 5G
Is India Ready For 5G
Is India Ready For 5G
India ready?
What is 5G
5G or the “fifth generation” is the latest upgrade in the long-term evolution of LTE broadband
networks. 5G works in 3 bands- low, mid and high.
The low band spectrum shows promise of great coverage, data exchange and internet speed
with its maximum speed capping at 100 Mbps (Megabits per second).
The mid band offers higher speeds in comparison to low band but has limitations in coverage
and penetration of signals and is best suited for industry and specialized factories and can be
molded to needs of a particular industry.
The high band spectrum has the highest speed of all but has extremely limited coverage and
signal penetration strength. Internet speed in the high band spectrum of 5G has been tested
to be as high as 20 Gbps (Gigabits per second) while the maximum internet data speed in 4G
has been 1Gbps.
This brings us to understand where India stands in the race to implement 5G. India had plans
to implement 5G in 2018, with an aim to capitalize on better network speeds and strength
that comes with the technology. However, a February report by the Parliament Panel on
Information Technology (IT) said that India would not be able to launch 5G in the second half
of 2021 or early 2022. The three major private telecom players, Reliance Jio Infocomm, Bharti
Airtel and Vodafone Idea (Vi) have been urging the DoT (Department of Telecommunications)
to lay out a clear road map of spectrum allocation and 5G frequency bands. The parliamentary
report blames India’s DoT for not doing enough to ensure a speedier launch of the new
technology.
Moving into 5G is all about fiberization. 5G technology needs the network fiberization levels
to be at 70% in comparison to the 25-30% levels at present. Industry estimates show that
there is a need to deploy 100 million fiber km optical fibre cable (OFC) per year in order to
have a robust 5G network. Currently the deployment rate in India is very slow at 25 million
kms per year. Only 30% of mobile towers in India have fiber backhaul, this is significantly lower
than the global standards, whereas in countries like South Korea, 65-70% of the sites have
been fiberized and in US, Japan, and China this level of fiberization is at 75-80%.
Huge AGR payments (Adjusted Gross Revenue): In India there are 3 major players in the
telecom industry who are investing for 5g technology, JIO, Bharti Airtel and Vodafone idea.
The biggest problem with idea and Airtel is that they already have to pay 58 and 44 thousand
crores rupees. For the AGR dues. The sector is already in distress and these huge sums create
a big stress on their balance sheets and future cash flows.
Unprecedented debts: Idea and Bharti have huge debts on which they have to regularly pay
interest and this also restricts them to raise debt and increase capital expenditure for 5G
technology. Bharti Airtel has invested in 5G but to reach to each and every corner of the
country they will have to incur huge capital expenditures.
License fee: The license fee of 8% of the Adjusted Gross Revenue is one of the highest in the
world and due to such high fees the overall margins of the company reduces by a huge
percentage which affects the bottom line of the company. Due to this, companies are not able
to earn enough profits even after such huge investments.
High Right of way Cost: The government charges a huge amount for laying the fiber cables
which increases their investment costs and leads to a greater capital expenditure. There is
already a lack of telecom infrastructure in the rural and urban areas and to grow, 5G
technology companies have to incur huge initial fixed costs and with these government
charges, the cost increases to an unprecedented level, Due to this the rollout of 5G is very
slow in India.
Price war- As there are only 3 players there is a huge price war among them and they cannot
increase their plan charges to very high levels as customers might shift to other telecom
service providers, due to this the revenue grows at a very slow pace and this affects their
overall profits.
Global stance of 5G
5G is the newest wireless networking technology that phones, smartwatches, cars, and any
IOT object, will use in the coming years, but it's not yet available in every region around the
world. Data acquired by Finbold, projects that about 4.74 billion people, or 60% of the global
population, will have access to 5G coverage by 2026. In the same year, 3GPP and LTE will both
have a coverage rate of 96%. As of 2021, 1.97 billion people have access to 5G technology,
accounting for 25% of the population.
• North Americans have been seeing 5G networks pop up in sporadic places for a few
years now. The countries like Canada, Mexico and Dominican Republic have begun
rolling 5G from 2018-19 and companies like AT&T, Verizon and T-Mobile have been
investing huge amounts in improving technologies
• In Asia, Japan and China were the first countries to roll out 5G and companies like
Docomo and China telecom are the largest telecom companies who are expecting
more than 90 percent of people using 5G in coming 5 years
• 5th generation networks are live right now in some European countries, and others
will get it during 2021. The countries to launch 5G early were Germany, Norway and
the United Kingdom. Vodafone is the largest player in the European nations
With the shift towards the digital world the use of internet data has increased significantly
and is expected to grow even further and this shows the whole 5G technology is rising rapidly
worldwide.
The global COVID-19 pandemic has drastically affected businesses across the world. This
situation does not present an insurmountable challenge though.
The year 2019 was when many CSPs around the world started trials and rollouts of 5G
networks. Several countries were busy getting ready for the rollouts by way of spectrum
auctions, infrastructure contracts, and other readiness initiatives. Cut to 2020, and we are
seeing some impact on both rollouts as well as readiness for 5G. While some countries have
delayed their spectrum auctions, a few others have brought in regulations relating to
prioritization of spend. As a foremost step, CSPs have an immediate responsibility of enabling
remote working and connectivity for citizens, providing extensions to data consumption
packages and facilitating additional quota during the lockdowns globally.
Reduction in spends, and limited workforce to roll-out will also create impacts such as:
While the communications industry will see a dip in the very short term, it will be the first to
start showing signs of recovery.
What is the take of private telecom giants on 5G in India?
"32% of Indian enterprises said they would prefer to license spectrum from another
company instead of purchasing spectrum directly from the government/regulatory body",
London- based consulting firm in a study said.
Globally telecom regulators have set aside a portion of the spectrum for fifth-generation
or 5G networks to enable local enterprises in building their own private 5G networks but,
according to the new finding, India is likely to go for a combination of both public and
private 5G slice instead of solely relying on private 5G.
"The ongoing pandemic has urged Indian enterprises to increase investments in next-
generation wireless technologies," it said and added that enterprises here are banking
on newer technologies for improved security and better customer interactions.
However, despite the promising data, 45% of Indian enterprises believe cybersecurity along
with system compatibility (39%), lack of spectrum availability (37%), and immature next-
generation technologies (35%) are some inhibiting factors that need to be addressed in
public 5G service adoption. At the same time, 39% of the Indian enterprises are expected to
invest anywhere between $10-50 million for wireless technology enhancement within their
organization. The finding showed that India ranks second only to Japan among the nations
surveyed in terms of the investment planned on wireless networking. It highlighted that
data speed has emerged as the topmost priority of 80% of Indian enterprises as business
strategies shifted during the pandemic.
References:
1. https://techwireasia.com/2020/10/whats-holding-a-5g-roll-out-back-in-india/
2. https://indianexpress.com/article/explained/what-is-5g-and-how-prepared-is-india-to-
adapt-to- this-tech-7150641/
3. https://techwireasia.com/2021/03/whats-slowing-down-indias-5g-rollout/
4. https://telecom.economictimes.indiatimes.com/news/32-enterprises-prefer-licensing-
5g- spectrum-from-private-companies-study/82272116
5. https://www.wipro.com/innovation/the-impact-of-covid-19-on-5g/