The 5G network technology is expected to contribute about 2% to India’s GDP amounting to $180 billion by 2030, according to a report by Nasscom and Arthur D Little. Factors such as increasing market penetration, sectoral reforms, improvement in user experience, speedy rollout of services, among others, will contribute to the growth, the report said.
Among the key sectors, energy and utilities will be the key driver of 5G contributing about 30% of the expected $180-billion potential, followed by retail at 20%, healthcare at 15% and manufacturing sector at 10%. For the energy sector, the growth is seen coming from the 5G smart metering, smart grid opportunity. In the healthcare, the penetration is expected to come from online consultation, robotic surgeries, cloud-based patient profiling, and wearables. On the other hand, digital transformation and smart factories are expected to drive 5G penetration in the manufacturing sector.
The report also expects 5G to enable a $1.5-trillion revenue potential by 2030.
“Policies like the National Optical Fibre Network (NOFN) which plan to connect all the 2.5 lakh (250,000) gram panchayats in the country will help enhance India’s potential to 5G adoption by increasing accessibility and affordability,” the report said. “Substantially aggressive rollout plan coupled with speedy 5G adoption across customer segments and geographies will also enable aggressive growth,” it added.
Currently, India has 1.1 billion telecom users, which is the second highest in the world. Of this, 740 million are 4G users. In a bid to shift the users from 4G to 5G, the telecom operators will have to price the services at an optimum level. “This (optimal 5G pricing) may be a challenge for operators looking to recover spectrum investments and drive ARPU (average revenue per user) related profits,” the report said.
By 2025, the ARPU of the telecom operators is expected to increase to Rs 335 from the current Rs 162. In the last four years, ARPU has grown at a compound annual growth rate of 13%.
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According to the report, growing smartphone penetration, significant rise in OTT consumption, digital payments, E-commerce are some of the major factors driving the digitization, which are boosting the ARPUs of the industry.