The Indian government expects initial “5G” rollouts by late 2020. But sector experts say the country is running late and could be at least three years behind South Korea, Japan, Australia, the US, China, France and Germany in rolling out 5G networks. Pre IMT 2020 standard 5G services are likely to be rolled out in those markets by late 2019 or early 2020.
Some of the key reasons why India is slipping behind in 5G – after having missed the 3G and 4G early adoption train – include dismal state of fiber network infrastructure (needed for backhaul), absence of relevant use-cases and a very modest presence of household electronics plugged into the Internet.
Financial stress in the industry and a missing handset/mobile device ecosystem have already delayed a 5G spectrum sale to late 2019.
Further, high debt levels and the prospect of high reserve prices could further kill the appetite of telcos even when 5G airwaves are auctioned, especially for older carriers such as Vodafone Idea and Bharti Airtel, whose India operations remain in the red, say experts.
Problems related to setting up and maintaining fiber networks and poor 4G Internet availability in the villages and small towns, they say, could further scale down the business case for early 5G rollouts in India. 5G smartphones won’t come to India before 2020, although they will be available in early adopter markets next year (again, pre-standard and likely based on 3GPP release 15 5G NR).
Sunil Mittal-led Bharti Airtel said recently that the current wave of popular 5G use-cases such as “driverless cars to remote surgery are not practical in the Indian context,” which is why it expects deployments are four years away. He also said the company is in no hurry to bid for 5G spectrum.
Experts say a major deterrent to India’s 5G ambitions is lack of adequate fiber connectivity – less than 20% of the country’s telecom towers are linked by fiber. This can limit the capacity to connect the core of a mobile network to nodes and then on to towers for transmitting data. A reliable fiber-based network is critical to support 5G data speeds of 10 Gbps and next-gen applications such as video-on-demand and internet of things (IoT) to smart cities.
“If 5G is to succeed in India, at least 70-80% of mobile towers will have to be fiberised, failing which, severe data speed limitations will continue as present backhaul networks in India use microwave spectrum,” says TR Dua, director general of Tower & Infrastructure Providers Association, an industry grouping representing Indus Towers, Bharti Infratel, American Tower Corporation, GTL, Reliance Infratel and Tower Vision.
TV Ramachandran, president of the Broadband India Forum, agrees, saying, “Most 5G use-cases would fall if we don’t provide strong fibre connectivity.” The forum counts Huawei, Qualcomm, Facebook, Google, Microsoft, Hughes and Intel among its members.
In comparison to India, China already has 75-80% of its mobile towers fiberised.
Moody’s Investors Service expects China to commercially deploy 5G services in late-2019 or by 2020, with pilot trials already under way. The Chinese government allocated 5G spectrum this month to the country’s top 3 telcos – China Mobile, China Unicom and China Telecom – to conduct field trials in the run-up to the commercial rollout of 5G services.
By contrast, India’s telecom department said that the 5G spectrum sale would take place in the secondhalf of 2019. It though recently invited telcos, equipment vendors and other stakeholders to partner with the government for 5G trials. Sources say trials are still some time away.
Nitin Soni, director (corporates) at global rating company Fitch, does not expect 5G to arrive in India before 2022 at the earliest because the telecom industry balance sheet – saddled with Rs 7 lakh crore in debt – is in no shape to support a 5G spectrum sale in the next one year.
“Even if 5G spectrum is auctioned by late-2019, I don’t foresee enthusiastic bidding, especially if reserve prices are high as older carriers are still struggling. Besides, India is nowhere near having ubiquitous fibre connectivity or a devices ecosystem comparable with China or Korea, which could delay 5G rollouts by another three years,” says the Singapore-based Fitch director.
Rajan Mathews, director general of the Cellular Operators Association of India, which represents Vodafone Idea, Bharti Airtel and Reliance Jio Infocomm, says the primary reason South Korea, Germany, Japan or the UK have been able to brace for 5G early is due to the strong “financial condition of their telecom operators.”
The reserve price of 5G spectrum recommended by India’s telecom regulator, he said, “is much higher compared to Germany, South Korea or UK.”
In August, the Telecom Regulatory Authority of India (Trai) set Rs 492 crore per unit as the minimum rate for 5G spectrum (in the 3.4-3.5 GHz bands), compared with Rs 131 crore per unit and Rs 66 crore per unit in South Korea and the UK, respectively.
A key global learning, Rajan says, is “pricing the spectrum at reasonable rates” to allow telcos to bid aggressively and roll out 5G services.
Fitch’s Soni says China has stolen a march over India as “it’s streets ahead in developing data-intensive 5G content coupled with music, movie and sport apps in regional languages,” which is slated to drive consumption once 5G services get rolled out there.
Experts also say that unlike India, China already has a buzzing internet of things ecosystem, wherein cars, machines and ordinary home appliances are plugged to the internet, providing the perfect springboard for 5G to rapidly gain traction.
The Modi government, though, doesn’t want India to miss the 5G bus – like the country did on 3G and 4G – as the economic impact alone of this superfast wireless broadband technology is estimated at over $1 trillion by 2035.
The government has set up a highpowered 5G Forum to advise on the path forward, which has suggested that most rules on regulatory matters be promulgated by next March to pave the way for early rollouts.
US chipmaker Qualcomm has downplayed concerns around 5G ecosystem challenges, saying that although the global infrastructure ecosystem is diverse, the vendors overseas and in India are the same.
“Different countries are at different stages of mass deployment of fibre and so on,” says Durga Malladi, senior vice president, Engineering & GM (4G/5G), at Qualcomm Technologies.
Reliance Jio president Mathew Oommen told ETTelecom: “For service providers, just voice or even traditional data revenue alone is not going to be the cure. They have to invest and innovate so that they would not get displaced by other aggressive providers or more importantly by OTT companies.”
India telecom market leader Reliance Jio, second ranked Bharti Airtel and financially stressed Vodafone Idea (Vi) have filed applications for participation in the upcoming 4G spectrum auctions, due to start on March 1. The auction for over 2300 MHz of airwaves—valued at Rs 3.92 lakh crore at base price—though is likely to see limited bidding intensity for spectrum worth less than Rs 48,000 crore, with Jio and Airtel expected to be the main players. Industry executives have confirmed to ET that the three telcos have filed in their applications although Airtel, Jio and Vi did not respond to ET’s queries.