5G could be India’s next growth engine, and a successful rollout hinges on telcos, govt policies

• India’s leading telcos Reliance Jio and Airtel kickstarted a limited rollout of 5G services after the ₹1.5 lakh crore spectrum auction in August.
  
• While the immediate tangible benefits of 5G include faster data speeds and lower latency, experts believe enterprises will have a significant contribution in terms of revenues.
  
• A new report by KPMG has underlined the opportunities that 5G brings and the challenges ahead for a successful rollout.
  

5G is the latest buzzword in the telecom world, especially now that the spectrum auctions are over and leading telcos Reliance Jio and Airtel kicktarted a limited 5G rollout in select cities in the country.

The primary attraction of 5G, as far as the common people are concerned, is faster speeds. Beyond that, there are tangible benefits like lower latencies which reduce the time it takes for your phone to connect to a server.

5G also offers better network efficiency even in heavily crowded places where older technologies like 4G, 3G and 2G are hardly usable even for voice calls.

Beyond consumers, 5G has wider implications for telecom companies, enterprises as well the economy of the country.

A report by KPMG states that a 10% increase in mobile adoption increases the GDP by 0.5%. And, with 5G expected to bridge the connectivity gap by offering high-speed broadband in rural areas, the report states that 5G could drive the next wave of growth in the country.

“Low latency, improved bandwidth and large machine-type communications are expected to have a significant positive impact on businesses,” the KPMG report says.

The business case for 5G

5G involves big investments – Indian telcos placed bids worth over ₹1.5 lakh crore for spectrum alone. But beyond telcos, nearly half of Indian enterprises are pointing towards increased budgets for non-time critical communications.

That’s where enterprises providing these services sense a business opportunity – according to the report. Over 85% of the service providers are expecting a 20% return on investment for non-time critical communications, apart from other connected services, remote operations and more.

As far as telecom companies are concerned, the 5G roadmap will initially comprise consumer solutions, with limited business solutions.

The second stage will involve a move to offer enterprise solutions like private 5G, and finally, a switch to AI-driven, internet-of-things solution with the 5G infrastructure maturing completely.

Earlier, in an interaction with Business Insider India, COAI director general Dr SP Kochhar said enterprises will contribute to 70% of 5G revenues.

Here’s what telcos need to do for a successful 5G rollout

Sooner the telcos build out their 5G infrastructure, the higher their return on investment will be when the 5G services enter the second and third stages of their lifecycle, according to the report.

To get there, they will have to ensure their network is ready and the necessary upgrades to the backend are done.

“Network upgrades need continual focus on building network slicing, edge-AI compute models, beamforming, dynamic spectrum sharing, access technology-agnostic user equipment functioning and network analytics,” the report says.

Essentially, telcos need the right technology setup in place, following it up with the correct marketing of services to their target audience. This will not only help them generate new revenue streams, it will also enhance their ARPUs, which continue to be amongst the lowest in the world.

Faster fiber rollout, incentivizing firms and affordable access – govt’s recipe for 5G

The report also highlights the critical pieces of the puzzle that the government needs to solve. This includes coming out with policies that encourage increasing access to affordable services and 5G compatible devices across the country.

Apart from this, tower fiberization remains a critical challenge and including public places like bus depots, railway stations, street poles and more remain important to speed up fiber deployment.

Lastly, the report also suggests that the government should encourage research and development in this area by incentivizing telcos and other infrastructure providers.

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