Addressing India’s 5G conundrum

Mobile communication in India was primarily voice-based for many years.
Addressing India’s 5G conundrum

The recently concluded annual Mobile World Congress in Barcelona was abuzz with the emerging technology called 5G, which is expected to transform the communication landscape the world over. As with any technology life cycle, we witness hype before reality sets in. How soon will 5G become a reality and how quickly will India embrace this technology? Before looking at the possible solutions, let us understand this emerging technology a bit.

5G stands for the fifth generation of mobile internet connectivity. 5G promises 10 to 100 times faster data download and upload speeds compared to 4G. This technology will be applicable to an ecosystem of infrastructure devices (maybe billions of devices!) and is not just limited to smartphones. A recent report suggests that there are 7 billion connected devices globally, mostly comprising mobile phones, but that would increase 15-fold by 2025. This is because of the addition of connected home appliances, cars, transportation infrastructure, etc. 5G is also expected to reduce the latency (time taken for sending data from one point to another). This can help in innovative real-time applications across manufacturing, healthcare, education, etc.  

The rollout of 5G across the globe will happen gradually; 5G network suppliers as well as mobile phone makers are in a hurry to get their products into the market. Telcos across the globe are trying to outsmart each other. No wonder, a leading telco in the US recently started a controversial marketing campaign called 5GE or 5G Evolution (which is advanced 4G and has nothing to do with 5G). It is expected that the US, Japan, South Korea and the EU would roll out 5G services during the next couple of years. Any new wireless technology would involve complete infrastructure deployment as well as the availability of mobile handsets.  

Mobile communication in India was primarily voice-based for many years. However, over the past couple of years, India has suddenly emerged as a leading market for data consumption. A leading mobile network provider says that data consumption on mobile networks per user in India is among the highest in the world. While the increase in mobile usage is laudable, Indian mobile subscribers are a frustrated lot due to poor voice call quality, call drops and substandard data rates for browsing. While the benefits of 5G are too good to ignore and would help India become a ‘technology-first’ nation, the question remains: Will Indian telcos take the 5G plunge?

The biggest challenge is the availability of 100 per cent backhaul fibre optic network. Reports suggest that the US and China have over 80 per cent of the backhaul network fiberised, while in India, it is just about 25 per cent. In addition, what about the ability of the telcos to acquire equipment, infrastructure and more importantly spectrum? The total debt in the industry is over Rs 7 lakh crores.

Many telcos have requested for delayed payment for the spectrum they had acquired, and there are rumours that some telcos will file for bankruptcy. The situation is similar to the one we witnessed in the late nineties when the government intervened in bailing out the telcos that had filed for bankruptcy.
Should India wait for 5G to mature in other countries before bringing it here? Certainly not. The government’s Digital India push would get a major boost through the ultra high speed 5G network. Through Digital India initiatives, the government has already launched close to 70 services (including UMANG, Jan Dhan, eKYC, etc.) With more services on the anvil and more citizens availing the services, a robust 5G-ready infrastructure is the key.

The government has announced India will be 5G ready by 2020, but that seems far-fetched. It has plans to auction 5G spectrum. However, reports suggest even at the base price, the spectrum is 3-4 times more expensive compared to the cost in nations like South Korea. Considering the tepid response to previous auctions, the government is on the backfoot. 5G infrastructure would mean huge expenditure from the telcos for building the telecom backbone and for spectrum. The present price war and the ultra low cost tariff initiated by Jio has left the incumbent telcos struggling financially. In fact, a leading telco recently said the artificially low tariff for Indian subscribers would stop very soon as it is simply unviable for them.

How can the government help in bringing 5G? Firstly, the pricing for 5G must be reasonable with relaxed payment terms. But this would go against the government’s objective of maximising revenue from spectrum sale. Secondly, private players should be incentivised and the “Fibre First Initiative” mentioned in the National Digital Communications Policy (NDCP) 2018 should be aggressively implemented. Thirdly, the government should aim at reducing the regulatory taxes paid by Indian telcos, among the highest in the world.

They pay 30-32 per cent of their revenue as taxes (including spectrum usage charges, licence fees, GST etc.). Also, the government must push for ‘Make in India’ manufacturing for 5G infrastructure, equipment and even mobiles. Finally, an ecosystem should be created for coming up with India-specific applications by involving the right stakeholders including industry and academia.

Notwithstanding the current challenges in the telecom industry, India needs to embark on the 5G journey for the Digital India initiatives to be effective. The government and telcos must work together in building the right infrastructure that can provide superlative data speeds and user experience for all of us.

G Krishna Kumar
Columnist and ICT professional based in Bengaluru. Views are personal

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