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India has long been waiting for the rollout of 5G telecom services, which have the potential to revolutionize the society and economy. Security concerns over Chinese telecom equipment suppliers and the pandemic-induced crisis have adversely impacted India’s march to 5G.
However, surveys indicate that there is a growing clamour for 5G telecom services. According to a survey done by Ericsson Consumer Lab, the proportion of people who wish to switch over to the 5G increased from 53% in 2019 to 67% now. The survey further indicates that as many as 40 million smartphone users are expected to switch to 5G in the first year of its rollout.
But, there are significant challenges in the path towards 5G. India is disinclined to import 5G telecom equipment from Chinese giants like Huawei and ZTE citing geopolitical and security concerns. This has become much more difficult in the wake of the recent Sino-Indian conflict. India has to scout for other global 5G equipment suppliers which has cost implications.
The second challenge is to put in place a 5G compatible network infrastructure. This requires replacing copper-based telecom networks to dense optical fiber networks. This process known as fiberisation. As of today, only 30 percent of India’s towers are connected by fiber. Fiberisartion requires increasing the tower density from 0.42 to one tower per 1,000 people.
The telecom service providers need suitable spectrum allocation to roll out 5G. The government of India is yet to auction the spectrum, though telecom service providers have expressed their readiness for trials. The government of India perceives the spectrum as a revenue-generating resource, especially at a time when its finances are crippled due to pandemic inflicted economic downturn. On the other hand, telecom service providers seek spectrum at a lower cost to make the 5G services affordable. These competing perceptions have to be reconciled for a smooth rollout of 5G.
Telecom is a capital-intensive sector. It is estimated that the total capital expenditure for the rollout of 5G, including spectrum, tower sites, and fiber, is expected to be Rs 1.3-2.3 lakh crores. The risk appetite of the industry is compromised in pandemic times.
Therefore, Indians perhaps have to wait for few more months at least to experience 5G. The union telecom ministry recently told the parliamentary standing committee that 5G may be rolled out by the end of 2021 or early 2022. But, the pace of fiberisation, the action on the spectrum auction front, and hitches in procuring telecom equipment make us believe that the wait may be still longer.
By Prof K Nageshwar
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