Govt says India is 5G ready, industry unsure

Govt says India is 5G ready, industry unsure

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Govt says India is 5G ready, industry unsure

The government of India says the country is “on the cusp of a paradigm shift to 5G”. Speaking at the 5G India international conference in Mumbai, Aruna Sundararajan, secretary, department of telecom, said: “We expect that by June we will have the contours of the [5G] roadmap ready. Thereafter, we are also going to be working on seeing the initial deployment cases.”

However, as cash-strapped incumbent telecom operators continue to slug it out in the ongoing price war with Reliance Jio, the industry players seem unsure of where the required investment for this transition to 5G is going to come from. The average revenue per user (ARPU), an indicator of a telecom operator’s performance, for all the incumbents have fallen sharply in the fourth quarter of financial year 2018—Bharti Airtel’s ARPU fell 27% year-on-year to Rs 116, Vodafone’s fell 16% to Rs 119, and Idea’s fell 26% to Rs 105. Jio, which has been offering heavily discounted bundled plans to customers, recorded an ARPU of Rs 137.

Surprisingly, Reliance Jio, the pioneer of 4G penetration in India, said India is not 5G-ready. “Today we are not ready with 5G because we are not ready with artificial intelligence [AI] and autonomous machinery in the true sense,” said Sanjay Mashruwala, MD, Reliance Jio during a panel discussion at the event. He went on to explain that the 5G is not just about telecom, but an enabling technology for machine-to-machine communication, augmented reality (AR), Internet of things (IoT) and AI, and the whole ecosystem of these technologies is yet to evolve.

Another important aspect is the decision on spectrum bands and their sale. Globally, around 3.5 gigahertz (GHz) is the standard for 5G services to be deployed. However, the government and the telecom regulator TRAI are still in the process of finalising the spectrum bands that will be set aside for 5G. “The spectrum must be finalised by the third quarter of this year,” said C.S. Rao, chairman of QuadGen Wireless Solutions.

The pricing of the spectrum is another critical aspect. In the last auction held in 2016, around 60% of the spectrum on offer remained unsold, including the 700 MHz band as telcos cited high pricing. Given the current stress in the sector, the government may be in for another disappointment in the next spectrum auction if the pricing isn’t reasonable.

Parag Kar, vice president, government affairs, India and South Asia, at Qualcomm, a chip maker, said, “Even if the price is Rs 1,000 per MHz, if you apply that to 3.5 GHz then the price is too high, and outflows will shoot up significantly for the companies.” Manoj Misra, senior public policy director at industry body GSMA seconded Kar’s views, saying that at present around 70% of a telecom company’s investment is spent on the spectrum. “5G requires heavy investment. And not just that, we need a sustainable investment over a period. How are we going to get that money?” he asked.

Low penetration of fibre in the country is another hurdle. According to Amar Mandhyan, director, technical sales at CommScope, an infrastructure provider, fibre penetration in India stood at 25-30%. “We need to reach 70-80% fibre penetration for 5G to be successfully deployed,” he said.

Industry representatives called for several other steps to be taken in order to help companies transition to 5G. While Intel India’s Ajay Sharma called for a relaxation in the process to obtain licenses from the Telecom Regulatory Authority of India to build labs and conduct tests, Nokia’s Amit Marwah mulled if setting up a shared infrastructure network was possible so that companies could only have to invest in buying capacity and not in setting up the infrastructure. Sharma also suggested constituting a 5G fund to incubate startups and to help develop skill sets in the service industry.

[“Source-fortuneindia”]