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India’s 5G future is under a cloud

In June 2019, soon after he took charge as telecom minister, Ravi Shankar Prasad said that the government intended to start trials on fifth generation, or 5G, wireless networks within 100 days, heralding a revolution in telecom services.

Of course, that intention was spelled out in an entirely different era—before the world was convulsed by covid-19. In the meantime, a debate about the security and reliability of telecom equipment from China, with which India was locked in a tense military standoff through much of 2020, and other domestic preoccupations of the Narendra Modi government contributed to the delay.

But whatever the reasons, almost two years after Prasad’s confident assertion, the 5G trials are yet to start on ground. The government permitted 5G trials earlier this month (4 May) but is yet to allocate spectrum to operators to begin trials. As the push towards 5G moves in fits and starts, experts have begun to warn that the large-scale network infrastructure that is required on the ground is still nowhere in place and looms as yet another potential impediment.

Customer interest, meanwhile, is sky high. While there are no commercial users of 5G in India till date, a study by Ericsson ConsumerLab shows that at least 40 million smartphone customers in India could switch to the technology in the first year of implementation.

“India has the biggest rise in intention to upgrade, with 67% of users expressing their intent to take up 5G once it is available, an increase of 14 percentage points over 2019″, Ericsson ConsumerLab said in a recent report.

The report also suggested that smartphone users in India are willing to pay 50% more for 5G plans bundled with digital services, versus just a 10% premium required for such connectivity.

Clarity is yet to emerge on the precise timing of the on-ground trials by operators but, according to a 8 February Parliamentary standing committee report, the department of telecommunications (DoT) secretary Anshu Prakash told the panel that a phased roll-out of 5G is expected by the end of 2021 or in early 2022. One requisite for the rollout, if it is to take place as per the timelines mentioned by Prakash, is the Centre would have to auction expensive spectrum before December—that will be key to unlocking India’s 5G gateway.

In January, Bharti Airtel Ltd demonstrated 5G services on a commercial network in Hyderabad and said it was ready for a commercial launch. Rival Vodafone Idea Ltd also said the company is prepared for the launch of 5G services.

“Earlier this year, Airtel became the first telecom company in India to demonstrate 5G over a live network using its liberalised spectrum (1,800 MHz) in Hyderabad. Our core and transport networks are fully ready for 5G,” an Airtel spokesperson said.

“We will now be conducting 5G trials in 3,500MHz, 26GHz and 700MHz allocated to us by the DoT in Delhi, Mumbai, Bengaluru and Kolkata. We plan to deploy next generation 5G radios for testing performance, user experience and interoperability with 5G ready smartphones,” the spokesperson added.

Mukesh Ambani’s Reliance Jio Infocomm Ltd claims to have built a home-grown 5G solution, which it plans to roll out in the second half of this year. Details of what Jio has up its sleeve are not known. An email sent to Reliance Jio seeking comments on the progress of its 5G solution did not elicit a response.

In effect, all the three major telcos have expressed confidence in their own 5G technological preparedness. Whether the nuts and bolts of the required infrastructure is actually in place across the country is another story entirely.

The challenge
To enable 5G services, India needs to progress from copper-based telecom networks to dense optical fibre networks—a process known as fiberisation—which also entails setting up towers at smaller distances, making for a dense network of tower sites.

Only a little over 30% of India’s towers are connected by fibre which, experts say, needs to expand to 60-70% to serve 5G requirements. According to the National Broadband Mission, which was launched in December 2019, about 70% of the country’s towers will be fiberised by 2024. The mission involves laying an incremental 2 million kilometers of optical fibre cable and increasing the tower density from 0.42 to one tower per 1,000 people.

“Fiberisation would play an important role in getting India ready for 5G. While the current capacity per tower site is about 200Mbps (megabits per second) for 2G/3G/4G services, for 5G service, the capacity needed for each site will increase to 1-5Gbps (gigabits per second), which will require fiberised backhaul,” said TR Dua, director general of the Tower and Infrastructure Providers Association (Taipa).

To augment and ease the development of telecom infrastructure, the Union government in November 2016 came out with a Right of Way (RoW) policy. The RoW is a framework to set up telecom towers, lay fibre cable and settle disputes in a time-bound manner, and to improve coordination among private companies, state administrations and municipal bodies.

RoW mandates a uniform one-time levy of ₹1,000 per kilometer for laying optical fibre and ₹10,000 for setting up a tower. Despite this, many states and local bodies continue to charge heftier amounts—first for setting up the infrastructure and later as an annual renewal fee since these levies act as an important source of revenue.

“The telecom industry is already under acute financial stress, and states such as Delhi and Maharashtra continue to levy a hefty fee for granting permissions. It is in direct contravention of RoW rules,” Dua said. Mumbai and Pune are the most expensive cities in which to lay fibre, according to data provided by Taipa. In Mumbai, it costs anywhere between ₹91 lakh and ₹1.3 crore per kilometre. The expense in Delhi-National Capital Region (NCR) is ₹6-20 lakh.

Besides uneven or exorbitant pricing, tower and infrastructure providers also face challenges such as delayed grant of permissions by states and municipal bodies, lack of standardised, and non-availability of government land and buildings which results in time-consuming private negotiations, Dua said.

Nokia India’s chief of marketing and corporate affairs Amit Marwah agrees that the RoW framework is faced with implementation issues that require immediate government intervention.

“The problem with the implementation of the policy has been the structure of state versus Centre and separate jurisdictions. There are states which have red tape, have really high cost of RoW, or they delay the implementation. The government needs to take this more seriously,” Marwah said.

This impasse is hurting the progress of network and infrastructure deployment, said Anand Agarwal, group chief executive officer of Sterlite Technologies Ltd, a domestic telecom equipment maker.

“We believe a new RoW policy should be introduced that takes a proactive approach to address this problem,” Agarwal said. “It must include a single window for approvals, free RoW access, and a common duct regulation to ensure single digging. The government should also set up a secretary-level RoW Council, similar to the GST (goods and services tax) Council, in order to monitor the ease of RoW,” Agarwal said.

International partners
Even as ground deployment faces many obstacles, the security concerns over Chinese network equipment vendors will throw another spanner in the works.

Huawei Technologies Co Ltd and ZTE Corp are among a handful of global firms that supply wireless telecom equipment to Indian operators. Avoiding China would have cost implications, which could push back deployment timelines even further.

Several major economies have expressed concern about Chinese telecom vendors, particularly Huawei. The UK government has banned new installations of Huawei’s 5G gear from September 2021 and plans to phase out all Huawei networks by 2027. The US has also banned Huawei gear until this month citing national security concerns.

While the government has not officially banned Chinese vendors yet, its recent moves imply that they may indeed be barred. In December, the central government said that it was working on a list of approved telecom equipment vendors, given the growing concern about cyberthreats. On 22 March, Mint reported that Chinese companies could make it to India’s list of “trusted” telecom equipment suppliers, provided they fit the eligibility criteria that is being drafted by the national cybersecurity coordinator Lt. Gen. Rajesh Pant (retd). The DoT will issue the final list of approved manufacturers on a portal that will be launched in June.

If China doesn’t make the cut, there would be a race among other vendors to corner the market. Nokia is already manufacturing some 5G components at its Chennai plant, Nokia India’s Marwah said.

“We are manufacturing (5G) antennas. We cannot supply antennae to Indian operators because they do not have WPC-authorised spectrum. For now, we are exporting to other nations that have rolled out 5G,” he said.

WPC, or Wireless Planning and Coordination wing, comes under the DoT and is responsible for issuing radio licenses, and allotting and monitoring spectrum. Although the Telecom Regulatory Authority of India (Trai) in August 2018 recommended the minimum price of airwaves for 4G and 5G services, and it was expected that the government would conduct a spectrum auction for all frequencies at the same time, DoT excluded the bands that were earmarked for 5G in the sale which concluded on 2 March 2021.

In a post-auction conference, DoT secretary Prakash told reporters that there was a possibility of using the 700MHz band in the next sale for 5G services. The 700MHz band can support 5G because of its high efficiency, which also made it the most expensive among the seven bands for sale in March.

Unaffordable spectrum
Prakash also said that the government may reconsider the pricing of the 700MHz spectrum band in consultation with Trai. Telecom operators have insisted that the floor price recommended by the sector regulator is “unaffordable” and will impair the introduction of 5G services in India. Beyond intermittent tiffs over RoW and which foreign vendors would qualify to supply equipment to India, spectrum will be the key battleground in the months ahead.

The total capital expenditure required for the roll-out of 5G, including spectrum, sites and fibre, is expected to be ₹1.3-2.3 trillion—of which ₹78,800- ₹1.3 trillion is the estimated cost of deployment in the metros and so-called A circles alone, according to a report by Motilal Oswal Financial Services. It is clear that telecom is a capital-intensive business and requires investment of billions of rupees for network and infrastructure development. With 5G, this is bound to increase.

Experts say that Trai’s active infrastructure sharing policy, if adopted by DoT, can lighten the sector’s financial burden. The electronic elements embedded in base stations and other equipment for mobile networks, such as access node switches and management systems for fibre networks, are part of the active infrastructure. Currently, sharing of active infrastructure among telcos is limited to the antennae, feeder cable, radio access network (RAN), and transmission system. Tower and infrastructure providers install these active elements and lease it to telecom operators who pay as per usage.

The active infrastructure sharing policy, recommended and backed by Trai, is expected to significantly cut costs for operators, enhance coverage and network quality, and improve pricing and choice for consumers.

“Telecom needs huge investment for growth and expansion. The acceptance of (Trai’s) recommendations would boost fiberisation and digital infrastructure in the country,” Taipa’s Dua said. Infrastructure development for 5G will also require the government’s support in addition to the investments made by telecom operators and equipment providers. “A comprehensive fiberisation approach and execution are extremely crucial for the success of 5G in India. These investments will be done by telcos, government, infrastructure companies as well as hyper-scalers,” said Agarwal of Sterlite Technologies. “Globally, governments are playing a key role in formulating this approach and investing in the fiberisation infrastructure.” Livemint

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