India 5G Market: A $27 Billion Opportunity But Are We Well Equipped For It?

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The 5G technology is expected to disrupt the Indian market in near future. LTE was just the tipping point in the mobile internet ecosystem as the 5G connection will offer life-changing potential apart from an uber-quick internet. As the telecom companies are preparing themselves for the next wave of revolution, 5G mobile services in India are expected to create an over $27 billion business opportunity by 2026, according to Ericsson.

“5G will enable a $27 billion business opportunity in India. Out of this $13 billion is the addressable revenue opportunity for mobile operators in the country”, said Nitin Bansal, Managing Director, Ericsson India

Ericsson study found that manufacturing segment will see the biggest opportunity at $2.4 billion with the arrival of 5G. It will be followed by sectors like energy and utilities with a potential of worth $2.1 billion revenue. Public safety and Healthcare sectors will see a potential of $1.6 billion each.

5G In India: The Next Wave of Revolution

The fast 4G LTE network still remains the cornerstone for mobile internet but it has surely set the ball rolling for incredible data speeds. There has been a major drift in data-consumption habits of users since the advent of the fast 4G connection and this will give rise to the super-fast 5G network. Telecom operators have recorded an average top speed of 22 Mbps on 4G networks, while 5G services yield the download speed of over 1000 Mbps or 1 Gbps.

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The Government of India believes that India is 5G ready and said the country is “on the cusp of a paradigm shift to 5G“. Although, the industry experts suggest that there is a long way to go. Before following the 5G roadmap, India needs to transform its internet infrastructure by par. The country would require fulfilling the prerequisites of an advanced communication technology which not only smartphones but also smart home devices, cars, smartwatches and almost every electronic communication device would be using. India is yet to fully evolve in technologies like AR, Internet of Things (IoT) and AI, and 5G would prove to be a potential enabler in the tech ecosystem.

There is a great pressure on the Indian Telecom industry, as more and more people are rapidly taking the 4G ride there has been an incumbent stress on resources. The telcos have incurred loses recently and the ongoing tariff wars with Reliance Jio is likely to make them indecisive to make necessary investments in this future technology. ARPU – the key performance indicator for telcos – has dropped significantly in Q4 FY 2018 – Airtel’s ARPU fell 27% YoY, Idea’s fell 26%, Vodafone’s ARPU fell 16%, and Jio’s ARPU dropped 11% to Rs 137.

5G In India: Not A Smooth Ride Ahead

One of the heavy challenges for telcos is to provide a smooth transition from 4G to 5G in India. An important factor to govern that would be deciding the required spectrum bands and its pricing. As per global standards, deploying 5G services would require a bandwidth around 3.5 GHz.

India also struggles in fibre penetration in the country which is around 25-30% and to successfully deploy 5G infrastructure, 70-80% fibre penetration is needed, according to Amar Mandhyan, Technical Sales Director at CommScope.

The evolution from 4G to 5G is bound to transform the underlying technology of various processes and systems. Our smartphones, for instance, will have to support this upcoming wireless technology, and similarly, the numerous carriers in the country have to be in consonance with the changing technology. The higher price of 5G chips will eventually raise the price of devices supporting it.

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“Ericsson is currently doing Massive MIMO trials with Indian telecom operators. These products enable a smooth evolution from 4G to 5G. All radio products within Ericsson Radio System delivered since 2015 support 5G new radio capability through remote software installation. It enables fast and smooth migration to 5G in existing bands,” said Bansal.

Globally, the 5G smartphone shipments are estimated to reach 110 million units by 2021. The standards of the 5G technology are to be finalized by United Nation’s telecom body ITU in 2019. Developed nations like US, South Korea, China and Japan might be the early adopters of 5G. India won’t see it until 2020. The Ericsson Mobility report also estimates that India will have over 10 million 5G subscriptions by 2023.

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