NEW DELHI: Telecom operators worldwide are under pressure due to low returns on investment (ROI) and challenges in monetizing 5G services, which could potentially delay the rollout of 6G technology, said S P Kocchar, Director General of the Cellular Operators Association of India (COAI), on Tuesday.
COAI, which represents private telecom providers such as Reliance Jio, Bharti Airtel, and Vodafone Idea, also emphasised the need for Over-the-Top (OTT) services to contribute to telecom infrastructure investments. He noted that telecom companies, particularly in India, are hesitant to expand their networks due to subdued ROI, with Indian operators averaging around 4%. Kocchar warned that the situation could worsen unless OTT services begin sharing revenue with telecom companies.
"The global rollout of 5G networks has slowed," Kocchar stated. "If viable 5G use cases don't materialize within the next 2-3 years, the 6G launch could be pushed beyond 2030."
According to COAI, telecom companies such as Reliance Jio, Bharti Airtel, and Vodafone Idea Limited have invested heavily in expanding their networks and 5G connectivity over the past few years but have not seen a return on investment. The GSMA Officiating Chairman stated that mobile network operators (MNOs) are making approximately a 3% profit on their investments, which is lower than the returns they would receive from depositing their funds in banks.
Furthermore, COAI called for bringing Over-the-Top (OTT) communication services under the licensing regime. The association argued that the shift of messaging traffic from licensed telecom networks to OTT platforms disrupts the economic balance and introduces security vulnerabilities. COAI noted that telcos have experienced a 94% decline in revenue from SMS services over the past decade and are expected to lose over $3 billion in SMS business messaging revenue globally to OTT channels over the next five years.