5G: Will This Next-Gen Telecom Technology Benefit Users, Businesses?

Leading up to the 3G launch, the industry was gung-ho and the government all but purred at the prospect of hefty spectrum auction fees coming in. But neither was ready, as weren’t Indian consumers at large.

Today, 15 years of high-speed connectivity and the subsequent launch of 4G and 5G services, Indian telecom has taken a knock that has ripped many innards out. What can 5G do, though, for the end-user experience? Let’s find out.

It was more than a decade after the launch of broadband services that the average Indian truly needed high speeds and reliable connectivity, especially when Covid-19 hit us and lockdowns became commonplace, catalysing the work-from-home culture.

People crouched in front of their laptops, staring at the screen as MS Teams, Zoom, ZOHO, Webex and other online meeting apps dictated their lives. Youngsters weren’t spared the tumult either, as schools shut down and studying from home (SFH) emerged as another new norm.

Input Price

5G spectrum auctions have, till date, fetched the exchequer bids of around Rs 1.5 lakh crore, with Reliance Jio alone lapping up resources worth Rs 88,078 crore, followed by Bharti Airtel with Rs 43,084 crore and Vodafone-Idea Rs 18,799 crore.

Full-blown 5G data services, which were to be launched by October 2023, are now expected to go online in April this year after network rollouts are completed, again costing tens of thousands of crores for each operator. Recouping this investment will be tough.

To put things in perspective, 3G spectrum auctions ratcheted up Rs 67,700 crore for the Government, with only a fraction of that figure translating into revenues for telcos. Despite the 3G flipside, though, operators had little option but to go for 5G, especially with a new kid on the block.

Incumbents fell like nine-pins in this race with a foregone conclusion—a realignment of operators in the telecom firmament. Thus it was that the Tatas, RCom, Aircel, MTS, Uninor and Virgin Mobile are now all part of India’s telecom history.

It is these incredibly heavy investments on spectrum and data networks, coupled with uncertain payback times and percentages, that see large parts of the planet continue to rely on 2G networks even today. Much of Europe, South America, Central America and Africa use 2G for communication, while most of the US, Japan, South Korea and others have replaced these with newer-generation versions. In all above geographies, operator extinction is at a minimum and the customer is sticky, both due to low monthly charges and the periodic bundling of devices by telcos.

What About The User?

Speed for the sake of speed is passé today. 5G achieves its latency by operating across bands, creating a malleable and adaptable connection, with low-band spectrum being preferred as it works hard surfaces and covers a wider user audience.

It is precisely because of this reason that some global geographies have foregone this band, opting to peg their 5G plans on the mid-band spectrum (which we use for 4G in India). High-band spectrum, on the other hand, offers incredibly fast, short-distance connections. In congested and densely-populated areas, such as stadiums and convention centres, these towers are what represent India’s tightly-knit towns and cities.

Today, India has already arrived at the peak of our individual data speed needs, enjoying up to 150 mbps on wireless connections. Everything that we use connectivity for in our daily lives is taken care of—be it social media engagement, video-streaming, WFH applications and uploading and downloading content.

Things are different for businesses, where high speeds are paramount, allowing them to drive relevant, personalised interactions with clients. For them, 5G will come in as a booster, adding capacities and enabling them to upscale their offerings and scale Internet of Things (IoT) deployments. Furthermore, 5G will offer reliability that would not have been possible on previous technologies.

A Mixed Bag For Businesses

Brokerage firms are mixed in their predictions for 5G monetisation and returns on investment for operators, and are crossing swords as they differ on the aspect of ‘premium tariffing’. What they do agree on, though, is that the two big operators, Reliance Jio and Bharti Airtel, will add a significant number of subscribers in 2024 itself, though monetisation through tariff hikes lacks a timeline as it needs acceptance from users and support from the competition (that means ‘no cut-throat pricing tactics’). It is in this context that cost recovery becomes the centre of the debate.

Reliance Jio has already announced that it would be investing Rs 2 lakh crore on its 5G rollout and building the required digital ecosystem. Airtel, meanwhile, has announced an investment outlay of Rs 33,000 crore for FY 2024, compared to Rs 28,000 crore in the previous year.

In its annual report, Airtel has said it has invested over US$ 50 billion (around Rs 4 lakh crore) to build its network in India. While on numbers, Airtel has a consolidated net debt, including the impact of leases, of Rs 2.1 lakh crore as in March 2023, and posted a standalone loss of Rs 89.6 crore on revenues of Rs 84,720 crore in FY 2023. The one silver lining for both telcos is that consumer spending on mobile services is rising.

There are good 5G signs too, with the technology expected to boost the economy by US$ 500 billion (around Rs 40 lakh crore) between 2023 and 2040. There are good things in the offing from the employment perspective as well, with the country slated to require 2.2 crore skilled workers in 5G-focused industries such as Cloud Computing, Robotics and IoT.

(The author is a New Delhi-based journalist and communications specialist. Views expressed are personal)