India – Here comes 5G!

India is finally catching up, and can expect to have 5G services by the end of this fiscal. However, many pieces need to come together, before the jigsaw falls into place.

The spectrum for 5G services is scheduled to be auctioned next month, once the TRAI recommendations are accepted by DoT. The fate of 27.5 to 28.5 GHz frequency bands will also have to be resolved by then. Display of responsible leadership is expected, and the price for spectrum kept affordable. The telcos will then need to deploy the 5G network, each at an estimated investment of Rs 50,000 crore initially, excluding spectrum costs, while ensuring that they are in line with the government’s scheme for design-led manufacturing. India should be having the entire technology stack, from core network to radio network to equipment to mobile handsets, by the end of this year. As the ecosystem is built, it will be part of the PLI scheme. Thirty-one telecom companies have committed to investing Rs 3345 crore over the next four-and-a-half years. Another Rs 4400 crore is being set aside under the PLI scheme for design-led manufacturing of 5G equipment.

BSNL will soon be back in the running too. With an infusion of Rs 44,720 crore, the attempt is to orchestrate creation of the first 4G network, built entirely by Indian companies. Vendors can expect orders by April, the total network cost estimated at Rs 13,000 crore.

Allocation of 5 percent of annual collections under the USO Fund, amounting to about Rs 500 crore, will enable local manufacturing companies to undertake R&D and generate their own IP. This would give the country better visibility in international markets and also greater options for exports. The infrastructure status granted to the data center industry and to grid-scale battery in the recent Union Budget will facilitate credit availability for digital infrastructure and clean- energy storage, thereby offering an opportunity to turn India into a global data center hub. The plan to build a world-class semiconductor fabrication facility; smaller fabs and chip packaging units, and incentives for research, with a commitment up to USD 40–50 billion is a move toward promoting a semiconductor manufacturing ecosystem.

All this translates into huge sums of money, and this is just the beginning. As we wait for the next set of telecom reforms in the first quarter of FY23, the Indian telecom industry finally seems to be on track.