India is going through massive digital transformation, enabled by high-speed data services. Although India has been a laggard in terms of technology adoption in the past, it is the second-largest and fastest-growing telecom market, and has improved its stance significantly with massive success of 4G services—broadband subscription grew four times from 99 million to 412 million since 2015.
The government is determined to launch 5G services by 2020 along with global counterparts. Unlike legacy data networks (2G, 3G), 5G will provide a one-stop solution for the convergence of data, voice, IoT and M2M devices. It has the capability to handle billions of IoT-led devices and enable digital transformation of services like healthcare, education, entertainment, agriculture and employment. In fact, 5G can be a potential enabler for Digital India with new opportunities.
Creating a smart society: 5G will create a seamless network experience by convergence of wireless and Wi-Fi as well as satellite network at the same time, providing next-level experience to the user. It has the potential to bridge the digital gap between urban and rural by eliminating the barriers created by lack of physical infrastructure. Emerging technologies: With 5G, smartphones will just be a part of a huge ecosystem that will include emerging technologies such as AI, virtual reality, 3D printing, robotics, etc. The next generation digital transformation will revolutionise customer experience in gaming, retail shopping and other customer-centric applications; it will also help sectors such as healthcare, education, agriculture, defence and space research with real-time information and insights.
Internet of Things: 5G is considered the backbone of IoT due to its high data rate, reduced end-to-end latency and improved coverage. IoT applications such as autonomous cars, intelligent transport, high-speed gaming, etc, which require seamless network with low latency, will benefit. Other applications such as smart cities, home automation, digital healthcare and industrial automation, which produce high amounts of data, require a highly capable, secured and reliable 5G network. And there have been significant developments.
The government has set up a high-level forum to create a roadmap and put in place suitable policy measures for commercial introduction of 5G by 2020, and has allocated `5 billion ($77 million) for 5G ecosystem development—trials and testing are under way. Some of the top telcos are investing in in-house development of narrowband IoT. While the government’s push to launch 5G by 2020 is logical considering huge demand, the time-line seems very short amidst numerous challenges telcos are facing today. India can leapfrog to a 5G-enabled ecosystem, but has to address various challenges in a timely manner.
5G standards and policy: Although developments are under way for commercial deployment of 5G, the government is yet to set 5G standards and policy that will ease the process of deployment. Rather than following global counterparts, India should focus on its own use-cases to develop policies and roadmaps around 5G.
Capex requirements: 5G may require investment to the tune of $60-70 billion, which is difficult for telcos considering 4G is still new and RoI is very low due to high tariff wars and competition in the market. At this point, attracting big investments is a challenge. The sector debt of `8 lakh crore adds to the woes of telecom players to generate investment.
Infrastructure deployment: Right of Way is a constant issue for telcos and they need to address this, as 5G requires huge infrastructure deployment from telcos. Even for high-speed data services, capable fibre backhaul is a necessity. India is aiming to increase its fibre backbone to 2.5 million km by 2022, from 1.5 million km. Without high-speed backhaul, it will be difficult to cater to QoS and data demand. Lowest ARPUs, average realisation per MB of 1.16 paise, etc, have created a severe stress on financial health, and even annual serving of debt at 10% is proving to be challenging. India needs to move quickly to 5G, but with a debt of over `8 lakh crore, where is this money going to come from? It is a classic case of being on the horns of a dilemma.
Partner, Deloitte India