With its 1.2 billion subscribers, India’s telecoms market is the second biggest in the world (China 1.32 billion). Despite the phenomenal economies of scale that telcos are able to leverage in the country, India remains one of the hardest markets for operators to turn a profit.
A protracted price war between the country’s key players, instigated by industry disruptor Reliance Jio has left India with some of the lowest data prices per Gb anywhere in the world. As a result, telcos are being forced to trade on wafer thin margins, with many content to weather the storm any way they can. The forthcoming merger between Vodafone and Idea Cellular is a classic illustration of telcos trying to consolidate their positions in a viciously competitive marketplace.
So, while ultra-low data prices may be great for the Indian consumer, they have been fairly catastrophic for Indian telcos – and it is against this back drop super-fine margins, sky high levels of debt and non-existent profit forecasts, that India’s telcos are being asked to make the multi-billion-dollar investments necessary to rollout 5G mobile networks across the country.
5G by 2022
Make no mistake – the Indian government wants operators to rollout 5G as soon as possible. For a country with an enormous rural population, the use cases that will drive 5G rollout in India centre around the opportunity to reduce the country’s rural/urban divide. Access to Smart Health initiatives and remote education services could revolutionise life for India’s isolated rural communities.
The government recognises the transformative potential of next generation mobile networks and has publicly committed to full 5G rollout by 2022.
“The government is very keen that India catches up with the rest of the world for 5G rollout. The Telecoms Regulatory Authority of India (TRAI) and the Department of Telecoms (DoT) have been working very closely with the industry. They have even formed a 5G panel which is liaising with the government on all the key issues surrounding 5G rollout – everything from spectrum issues to what infrastructure will be required. One clear message is coming from the government – they are not looking at this as a revenue maximisation ploy [for the govt], but they are really focussing on delivering coverage across the country,” explained Ankit Agarwal – CEO for Telecoms at fibre optic specialist firm, Sterlite Tech.
“They have already delivered some recommendations for the reduction of pricing for 5G spectrum, with plans in place for 700MHz and 3.3 – 3.6GHz,” he added.
5G demands a focus on fibre
As part of its commitment to rollout 5G services by 2022, India’s DoT has said that the country will need to increase the size of its full fibre backbone network from 1.5 million kilometres to 2.5 million kilometres, dramatically improving both backhaul and fronthaul capabilities.
“The fibre requirement to go from 3G to 4G was around 3.5 times as much. From our discussions with the telecoms industry, we believe that to go from 4G to 5G will require 2.5 to 3 times as much fibre as 4G,” Agarwal explains.
This sounds like a mammoth undertaking – and in truth it is. Until now, India has lagged behind its regional neighbours in terms of laying enough fibre to future proof its telecommunications infrastructure and the scale of the task ahead should not be underestimated.
“In any given year, India deploys only 1/12th or 1/15th the amount of optical fibre that China deploys, for roughly the same population. So, it’s really important that both the private sector and the Indian government ramp up the deployment of fibre.
“There is a huge challenge when it comes to right of way applications with the local municipalities – that’s a key aspect that needs to be addressed,” he said.
Indian telcos cannot be expected to meet the cost of laying 1 million kilometres of fibre on their own, and will require investment from both the public and the private sector, in order to make this lofty dream a reality.
“In India, one of the key use cases for 5G is going to be bridging the rural/urban divide. Smart services, like remote access to doctors, is going to be a big force in driving 5G.
There are a lot of conditions that can be improved in rural India, thanks to the high bandwidth capability of 5G mobile networks. You still have a large portion of rural India that has no access to mobile services – if we can deliver 5G to these communities it will be hugely transformative.
“If the government can continue cultivating the right economic conditions then the network operators will realise the “first mover advantage” of expanding their networks in rural India,” Agarwal said. – Total Telecom