India's Long Road to 5G

Gagandeep Kaur
12/21/2017
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The Indian telecom industry is going through confusing times. On the one hand, there seems to be a push to develop an ecosystem for 5G, a next-generation mobile technology that will cost billions to deploy. On the other, operators are wrestling with debt problems and struggling to remain afloat.

India's government aims to deploy 5G by 2020, in line with authorities and operators in other parts of the world. The Department of Telecommunications (DoT) has recently formed a panel to support the early deployment of 5G services in the country. The panel, which includes industry representatives, government figures and academics, plans to develop a 5G product portfolio targeting 50% of the Indian market and 10% of the global market over the next seven years.

The DoT has also recently approved the formation of a 5G test bed at the Indian Institute of Technology (IIT) in Madras. This test bed is likely to be operational in the next six months. There have also been a few industry initiatives, including a recent trial of MIMO (multiple input multiple out) technology, one of the critical building blocks of 5G.

Historically, India has always been slightly behind the global market where adoption of new technologies is concerned. Indian service providers hardly ever make headlines for conducting a groundbreaking trial of a new technology. Conversely, they have often made waves for innovating on business models and tariff structures.

This somewhat changed with last year's launch of 4G services by Indian new entrant Reliance Jio -- a liberating moment for the Indian telecom industry, in certain respects. RJio carried out a number of innovative trials and tests before finally launching the network. It was testing 4G technology for nearly four years before it finally introduced services.


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Nevertheless, it is likely to be some time before 5G arrives on Indian shores. Debts across the industry have now soared to as much as 4.5 trillion Indian rupees ($70.2 billion), not including another INR3 trillion ($46.8 billion) that service providers owe in spectrum payment charges. Telco profitability has slumped as prices have tumbled.

Moreover, operators would struggle to begin investing in 5G when they are still expanding their 4G networks. And with prices so low, they have yet to recoup the investments they have already made in 4G technology. Given the hypercompetitive levels of competition, telcos will struggle to raise prices anytime soon.

This year, the country's top three telcos will also be focused on integrating the companies they have recently acquired. Idea Cellular Ltd. and Vodafone India are in the process of merging their operations, while Bharti Airtel Ltd. (Mumbai: BHARTIARTL) has yet to absorb Telenor and the consumer wireless division of Tata Teleservices Ltd. It is unlikely that any will go beyond a token commitment to 5G.

If there is one operator that could seize the 5G initiative, it is surely RJio. It already has an all-IP network that is 5G ready as well as the financial resources to invest in 5G rollout, backed -- as it is -- by Mukesh Ambani, India's richest man. But with Indian rural teledensity still at just 56.9% at the end of October, according to regulatory data, India's authorities should have more humdrum services to worry about.

— Gagandeep Kaur, contributing editor, special to Light Reading

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rocket101
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rocket101,
User Rank: Lightning
12/28/2017 | 4:54:54 PM
If Operators are saddled with debt, why bother with 5G?
>>On the one hand, there seems to be a push to develop an ecosystem for 5G, a next->>generation mobile technology that will cost billions to deploy. On the other, operators are >>wrestling with debt problems and struggling to remain afloat.

 

LOL. Operators are saddled with debt and struggling to remain afloat. 5G, a next generation mobile technology that will cost billions to deploy, so where will the money come from? Public sector banks aka Personal ATM's of the industrialists?
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