Is there a disconnect here?

For 5G to become a reality, the network infrastructure across the length and breadth of the country has to be in place. It needs to support the billions of devices, and the trillions of megabits of data that will flood the network. A denser, fiber-rich network infrastructure is needed to deliver the key performance indicators, lower latency, longer battery life, higher data rates, ultra-high reliability, and more connected devices.

The range of a typical 4G macro cell today can theoretically cover 10 square miles. The plans for 5G have as many as 60 small cells covering just one square mile. Actual deployment needs would vary, but a 1:600 ratio is a whole new level of densification to consider.

For full-scale 5G deployments across India, the estimated expenditure for densification is Rs 3 trillion. The telcos are reeling under a debt of ₹6.3 trillion. The industry’s consolidated revenues are expected to be ₹2.7 trillion with OPBDITA of around Rs. 1.4 trillion for FY23. Spectrum auction for new bands in the range of 3.7–4.2 GHz and 4.7–4.8 GHz is in the offing. In the last spectrum auction held in August 2022, the carriers spent ₹1.5 trillion, the highest ever.

The increasing ARPUs, from ₹170 for H1 FY23, expected to cross Rs. 180 by the end of this fiscal, and close to ₹200 by FY24 are not an absolute reflection of healthy growth, as the exit of the Chinese vendors has resulted in raising costs for the telcos. With telecom penetration nearing saturation, the increase in subscribers of one telco is in fact a churn from another.

The Indian telecom vendors, including the OFC manufacturers, and the local telecom equipment manufacturers are hugely optimistic. Large orders are expected over the next couple of years. Government spend could be a major bright spot. BharatNet phase three is a ₹80,000-crore (USD 10 billion)-plus program. The PLI scheme, with 42 companies on board, and the Telecom Technology Development Fund will provide impetus. BSNL is targeting to launch 5G services by April 2024. And, once Vodafone Idea obtains financial resources, the telco will seek supply of 5G gear.

The predictions remain. The Indian telcos are expected to report a growth of 14 percent in their operating income in FY23, translating into OPBDITA expansion by 20 percent. By 2023, 80 percent of the new smartphone launches in India will be 5G-enabled. By 2028, 5G with 690 million users, will represent around 53 percent of mobile subscriptions in India. And USD 500 billion will be spent on the 5G revolution over the next few years.