India sees massive 5G gains, but 4G was more disruptive

Indian telcos are yet to provide pan-India 5G coverage, and yet India is likely to close the year with as many as 130 million 5G customers, according to the recently released Ericsson Mobility Report. That figure, moreover, is forecast to hit 860 million by 2029.

Reliance Jio and Bharti Airtel, India's top two telcos, launched 5G in October 2022, with Jio expecting to cover the whole country by December and Airtel targeting March 2024. About nine months since launch, the two operators claim to have 50 million subscribers each. Vodafone Idea, the third player, is yet to launch 5G.

"Fast-growing network availability across cities, affordable service plans and the growing availability of 5G smartphones has fueled rapid 5G adoption in the country," says the latest Ericsson Mobility Report.

As a growing number of people migrate to 5G, 4G subscriptions will decline from 870 million in 2023 to 390 million by 2029, says the Ericsson report. India's hunger for data will continue unabated with average data traffic per smartphone likely to grow from 31 gigabytes per month in 2023 to around 75 gigabytes per month in 2029.

Not as cool as 4G

But 5G is not having the same kind of disruptive impact in India as 4G had. Take the number of subscribers, for instance. Jio, which launched a 4G operation in 2016, boasted 138 million subscribers a year later in September 2017. 5G, by comparison, is likely to reach 130 million subscribers after 14 months on the networks of both Jio and Airtel. This massive surge in the number of 4G subscribers in the first year of operations was largely because of the free services initially offered by Jio. 

2G-free India?

The Ericsson report says smartphone subscriptions in India as a percentage of total mobile subscriptions are likely to grow from 82% in 2023 to 93% in 2029. This essentially means that 2G-mukt Bharat (2G-free India) is not likely to happen for the next few years. India still has more than 300 feature phones and Jio is campaigning to move them to 4G networks.

The bottom line

The biggest issue faced by the Indian telcos is monetization of the investments they have made in rolling out the 5G network. While the telcos are close to reaching the pan-India coverage target, they still haven't introduced 5G tariffs. 

Both Airtel and Jio are offering unlimited 5G data to consumers who have 5G-enabled devices. Telcos are also struggling to communicate the key differentiating features of 5G vis-à-vis 4G. The 5G-enabled private networks market is yet to take off in India with the government still undecided about whether to allocate spectrum administratively or auction it. 

The recent launch of fixed wireless access (FWA) services by both Jio and Airtel offers a glimmer of hope. "Between them they [Jio and Airtel] have expressed very high ambitions of serving homes and businesses with 5G FWA services in the coming two to three years," said the Ericsson report.