5G and India

The government plans to hold a spectrum auction in October 2019, and has set a similar deadline for starting 5G trials in the country. While the spectrum price proposed by TRAI for 8644 MHz of telecom frequencies, including those for 5G services, at an estimated total base price of Rs 4.9 lakh crore, is overpriced compared to international standards, the allocated quantity is well below global best practices, and 40 percent of spectrum lies unsold.

The financial health of the service providers is not a secret. While the marketplace remains brutal, the cumulative debt of Rs 7.64 lakh crore, with revenues dipping below Rs 2 lakh crore, and an investment exposure of Rs 10.4 lakh crore, is crippling. And 5G requires large quantities of spectrum. Deloitte estimates that India needs Rs 5 lakh crore investment to bring in 5G. The state of 5G ecosystem is still nascent. Critical infrastructure, fiber backhaul, fiberization of towers, enhancement of base stations and small cells network, seamless fiber deployments, and millions of public Wi-Fi hotspots have to be created.

The government will need to step in. Recommendations from ICRA, Crisil, Deloitte, BIF, ICRIER, COAI, GSMA, and ITU must not be totally ignored. There is an urgent need to review the auction design and setting of the reserve prices. With the twin promise of high throughput and low latency, 5G is expected to help India with digitization in sectors including manufacturing, healthcare, and education to become a truly digital economy. 5G services are forecast to have cumulative economic impact of more than USD 1 trillion by 2035.

Globally, 5G rollout has begun. 303 deployments by 20 operators in 294 locations have already been made. In India, not a single large live trial has yet been initiated, and the guidelines for the release of experimental or trial spectrum are still work in process. We could be as many as three years behind South Korea, Japan, Australia, the US, China, France, and Germany in rolling out 5G networks. We will have to race at double speed to ensure that the gap does not widen further.

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