Is 5G auction delay an advantage for Indian telcos?

Delaying the 5G spectrum auction in India until 2021 is likely to be advantageous for Indian service providers.

The sale was supposed to be held in 2020, but was deferred because of the outbreak of COVID-19. This means the country will not be able to keep its target of deploying 5G services in line with deployments in other developed countries.

However, the delay can work in India's favor. It offers a massive chance for service providers to get their own house and networks in order.

Silver linings: Coronavirus may have given Indian telcos an advantage by forcing a delay to the 5G spectrum auction until 2021.  (Source: Divyanshi Verma on Unsplash)
Silver linings: Coronavirus may have given Indian telcos an advantage by forcing a delay to the 5G spectrum auction until 2021.
(Source: Divyanshi Verma on Unsplash)

With the spectrum auction postponed, telcos now have an opportunity to enhance the process of fiberization. Currently, only 20% to 25% of the sites are fiberized in the country. 5G enables ultra-high-speed coupled with extremely low latency, and that demands fiber-based networks.

It also gives more time to identify India-specific use cases. 5G is unlike any previous standard, and telecoms companies across the globe need to go beyond the idea of charging for faster data.

Besides, some of the most glamorous and hyped 5G use cases, like autonomous vehicles, are unlikely to work in India.

Business matters

From all indications, the enterprise segment is likely to be the initial adopter of 5G, and telcos will need to work with different industries to come up with specific use cases for various sectors.

This demands innovation and extensive trials and collaboration with different business verticals, which doesn't come naturally to Indian operators.

A delay to the 5G spectrum auction could also mean Indian providers stand to benefit from the experience of telcos from other parts of the world.

Want to know more about 5G? Check out our dedicated 5G content channel here on Light Reading.

It also allows service providers to expand the 4G network in remote areas, and move subscribers from 2G and 3G networks to 4G. Currently, India has around 350 million 2G subscribers.

While Jio is a pure-play 4G telco, and Bharti Airtel has shut down its 3G network, Vodafone Idea is still operating both 2G and 3G networks. This breathing space can be used by the incumbent telcos to simplify the networks and move 2G and 3G subscribers to 4G.

Further, by the time Indian telcos launch 5G in 2022 or late 2021 more affordable 5G devices might be available, making it easier for the subscribers to transition to 5G.

Money talks

The financial mess surrounding Indian telcos is well documented.

Not only are they operating in one of the most hyper-competitive markets in the world, but the regulatory requirements and dues are also potentially backbreaking.

This time can be used by them to chalk out a strategy to accrue funds to pay for 5G spectrum. Telcos have been complaining about the high base price, especially so when the monetization route is unclear.

While the delay was not planned, India's operators can use it to their advantage, leaving them ultimately better placed to monetize 5G.

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— Gagandeep Kaur, contributing editor, special to Light Reading

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