Mint Explainer: What 5G means for you, India & telcos

What is 5G?

5G, short for the fifth-generation cellular technology, promises to exponentially raise the speed and data capacity of wireless networks. Data is the new oil, as Mukesh Ambani has famously said. Data traffic is surging, estimated to be growing more than 60% every year. 5G is tailor-made to handle this data explosion globally, including in India. Unlike 4G, 5G is capable of connecting multiple devices seamlessly and can handle a staggering 1 million devices per square kilometre. In India, 5G networks will run on mid- and high-end spectrum with speed and capacities more than 10 times greater than the 4G networks.

What does 5G mean for us?

Each new generation of mobile technology ushered in a revolution. Think about it: 1G made mobile voice calls possible in the 80s; 2G introduced SMS in the 90s, 3G made mobile web browsing possible in the early 2000s; and 4G brought in a smartphone revolution with its high data speeds. Now, 5G promises to launch its own revolution — a world that will resemble a tech utopia.

The 5G interface can connect practically everything to your phone through technologies such as IoT and AI. From automated cars to smarter cities to cloud robotics to remote surgeries, 5G promises to make Hollywood sci-fi thrillers a reality. The explosion in real-time information could transform public services in the country, with vastly improved health-care facilities, law and order, traffic management, etc. With faster speeds and lower latency (less delay), 5G will delight Indians seeking entertainment on their smartphones. There will be no glitches in video calls, live streaming, real-time gaming, etc. 5G could be a Big Bang moment for OTT networks in India, transforming the world of entertainment, including the business of filmmaking.

For the government, it’ll be an opportunity to bring more Indians on board the information superhighway it has been crafting since 2014 through schemes like JAM (Jan Dhan, Aadhaar, Mobile), Digital India and Skill India. But let’s not run ahead of ourselves. There will be teething troubles before the 5G promises come to fruition.

What does 5G mean for telecom companies?

For telecom companies, the 5G launch will bring new existential challenges. They are just about rediscovering pricing power with tariff hikes over the past year, and both Jio and Bharti Airtel have been deleveraging and cleaning their balance sheets. Even Vodafone India is in the middle of fund-raising to sustain operations and even bid for 5G auctions.

But here’s the 5G challenge for telcos — how do they monetise 5G swiftly over the next few years without bleeding their balance sheets further? While Trai has cut the reserve price of 5G airwaves by 39% from the suggested price in August 2018, telcos had been lobbying for a steep 90% cut. At the base price alone, the auctions will mop up ₹4.3 lakh crore.

The bigger concern for telcos is the government’s decision to reserve a portion of its 5G spectrum for private networks. This is expected to get a big thumbs-up from businesses — from tech powerhouses to manufacturing giants to logistics companies to hospitals, and even educational institutions. A captive network will be restricted to the operations of that enterprise. But telcos are losing sleep over this move. Enterprises, after all, are expected to churn out 30% to 40% of their 5G revenues.

The matter has blown into a face-off between the Cellular Operators’s Association of India (COAI), the body representing telcos, and Broadband India Forum (BFI), the representative of tech giants such as Amazon, Google and Facebook. COAI argues “there will be no viable business case left for the telecom service providers,” if private enterprises set up captive networks. But BFI has termed it just a “misconception”. Captive 5G networks are now a reality globally, with about 70 countries adopting this model, including the US, China, Japan and Germany. In this era of convergence, telecom services are no longer the preserve of telcos but an important input for businesses too.

Can 5G replace 4G in India?

Free voice calls and cheap and high-speed data ensured the rapid spread of 4G in India. Almost the entire country has now adopted it. Can 5G too emerge as the technology of choice for most Indians as rapidly? It may take a while. Telcos will likely price 5G services higher than 4G. Unless, as some analysts suggest, they bump-up 4G tariffs to a level where they offer 5G as well. In a price-conscious market, this could mean a slower adoption of 5G by Indians. Moreover, it remains to be seen whether there will be adequate supply of 5G handsets in India to begin with. 5G phone shipments only touched 30 million in 2021 while India has more than a billion telecom users.

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