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India catches up with the 5G world!

A couple of weeks back, as it seemed that India may just miss the 5G train, and leapfrog to 6G, the Union Cabinet moved swiftly, brushed aside (read resolved?) contentious issues, and approved 5G spectrum auctions. Now it is a matter of detail. The NIA has been issued, pre-bid conference announced, spectrum auction will commence on July 26, spectrum allotted by end-July, network rollout start in August-September, and services by March 2023. The die has been cast. The ball is now in the private sector’s court.

Will the bids from the telcos be muted? With private 5G networks allowing private enterprise to bypass telcos altogether, will there be a business case for making the huge requisite investments on the telcos’ part? Was India being left behind in the private 5G networks arena? To run its own private 5G network, a private company must first buy spectrum from the government; license the frequencies at which it can operate; obtain 5G equipment, base stations, mini towers, etc.; configure various edge devices like routers, gateways, et al to enable communication; and then customize it to suit its business needs – an operationally intensive and extremely expensive venture. Or will the government allow that they simply license the spectrum and use a managed service provider to do all the heavy lifting, who could then help businesses plan, design, deploy, and maintain private 5G networks. This story will unfold over the next couple of years.

Moving forward, the government seems to have opened a Pandora’s Box. The global technology companies are now at loggerheads with telcos over delicensing of 1200 MHz of spectrum in the 6-GHz band (5925–7125 MHz).

Shifting gears, the undersea cable systems along with data centers are vital infrastructure for supporting 5G and the digital economy. Ninety percent of the world data traffic is carried on submarine cables. A clear growth in international bandwidth connected to India is anticipated; TeleGeography pins it at an increase by 10 percent between 2021 and 2028. This growth will have an impact on connectivity pricing in the region; prices for international wavelength capacity from India to both Europe and Southeast Asia are currently more expensive than other major global routes. These higher prices are a by-product of concentrated cable ownership, control of cable landing stations, and fiber backhaul. This will continue unless, on the one hand, new cables are deployed and, on the other hand, there are significant changes to, and improvements in, the regulatory environment. This translates into an opportunity for newer, higher fiber count submarine cables, and for providers to step up and serve future demand with elevated capabilities. Between now and 2025, at least six new subsea systems are slated to enter the market, with several more under discussion.

Is it any surprise then that large private equity funds are continuing to match their activity from the previous year, reposing sustained faith of investors in India’s growth story?

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