In the absence of 5G use cases and its slow monetisation, the launch of 6G services in the country is likely to get delayed beyond the target of 2030, according to telecom operators and industry experts. The same assumes significance as telecom operators globally are seeing lower returns on investments (RoI) at 3%, which is lower than what they would get by depositing in banks.
“The positivity on getting RoI is a little subdued. Hence, telcos are increasing the infra with a little bit of caution. So much investment without any revenues being generated does become a poor business plan,” SP Kochhar, director general of the Cellular Operators Association of India (COAI) told reporters on Tuesday.
“The rollout of networks for 5G world over has slowed down. If 5G use cases don’t come up in the next 2-3 years. Maybe the 6G launch may get delayed beyond 2030,” Kochhar said, adding that launching 6G without any use cases for 5G does not make sense.
According to the global mobile industry body GSM Association (GSMA), telcos have invested $109 billion—or 85% of the total investment in telecom networks, excluding end-user devices. While 5G monetisation remains slow, the telecom operators are staring at higher expenditures on graphic processing units (GPUs) owing to increase in traffic especially from data consumption by users.
Experts said business assumption on 5G has gone wrong as it was expected that enterprises use cases would come in the form of sensors, internet of things (IoT). However, those have not come and B2C monetisation was never expected as there is no major difference between 4G and 5G speeds. “What we are telling the government is that world over, we rolled out 5G hoping that applications will come. But they should also start looking seriously at the kind of applications that will consume 6G. Otherwise, there will be a similar situation where 6G technology will be there without any consumers,” Kochhar said.
Currently, fixed wireless access (FWA) is seen as a promising usecase of monetising 5G, which both Airtel and Jio have started rolling out. Mahesh Uppal, director at ComFirst said, “The launch of 6G will depend on viable business models, use cases and cost benefits. Telcos are expected to be more cautious before deploying the 6G networks given the returns are yet to come in on 5G investments.”
According to Uppal, the government should rely on telcos to determine how and when to launch 6G. It should help create a conducive environment and resist interventions that could potentially distort the market.
Rakesh Bhatnagar, director general of Voice of Indian Communication Technology Enterprises (VoICE) said, “Spectrum for 5G private enterprises can boost 5G use cases. Domestic design-led players are getting queries from sectors such as mining, railways, steel plants, others for deployments but they are the mercy of licenced service providers, who are either not ready to offer spectrum or have terms and conditions that affect financial viability.
”According to Bhatnagar, there is no funding support so far for private players who want to do 6G-related research and development.
“If tangible value from 5G remains limited, it may dampen the urgency for large-scale 6G investments,” said Murtuza Kachwala, managing director, Protiviti Member Firm for India. According to Kachwala, a phased deployment strategy, starting with targeted pilots in high-impact areas, would help test use cases and manage costs.
During the conversation, COAI also reiterated its stance on fair share from over-the-top (OTT) players. “OTTs are not sharing revenues globally (with telecom operators). The clamour is now growing across Europe, Americas and SouthEast Asia that OTTs should contribute,” Kocchar said, adding that 11 telecom operators have folded up in the recent past across the globe because of lack of profits.
