The range of 5G network towers is far less than towers of 2G, 3G and 4G network, which requires the installation of many more towers for smoother communication.
India has stepped up efforts to roll out 5G technology in the country but there are trade-offs that are keeping it away from the market. Cost of infrastructure, license, and equipment are too high. The range of 5G network towers is far less than 2G, 3G and 4G networks, which requires the installation of many more towers for smoother communication. “The current telecom infrastructure in India will require a rapid expansion to support the launch of 5G. The implementation of mobile infrastructure policy in the federal governance structure and the country’s fiberisation level are some of the key challenges in making 5G a reality,” according to a report by Deloitte .
5G is a wireless technology that can be used on phones, smartwatches, cars, and other portable devices. The technology uses artificial intelligence, making it more useful for the industries. However, apart from the benefits, a major disadvantage is a large amount of radiation it emits, which makes it harmful for people.
“Implementing 5G technology in India will need a tower at every 500 metres, which would generate substantially higher radiation. The license fee can itself cost around Rs 25,000 crore for an operator, which can only be borne by a few companies such as Jio, which can take international loans,” Shrawan Dubey, Circle Secretary, Telecom Officers Association, BSNL, told Financial Express Online. He added that it is difficult to get such huge loans from banks and therefore the government’s help will be the only way other operators can afford it.
Catering to an immensely large customer segment of over 100 crores would require high equipment cost, fibre cost, and tower installation costs. Going by the current scenario of most of the Indian telecom companies, it is difficult for them to bear this burden. While Reliance Jio focuses on prioritising 5G investments in anticipation of accelerating commercial prospects, other telecom companies seem to be having a more conservative outlook, added the Deloitte report.
With debt-laden financials, telecom service providers are in a dilemma to meet the capital needs of network expansion. Instead, the private telecom companies are now trying to monetise the fibre opportunity through fiber companies and tower companies separations, thereby trying to shed off a big chunk of their overall debt and making themselves asset-light.