technology

How 5G technology is critical to India's digital dream


By Sanjay Kapoor & Ayon Banerjee

While 5G is built on the successes of 4G networks, it provides an opportunity for telcos to move beyond providing connectivity services, to developing rich solutions and services for consumers, industries and infrastructure.

Worldwide, more than 40 telecom operators have already launched 5G. But given the current turmoil in India’s telecom industry, pundits continue to question the need — and viability — of launching 5G here.

While it’s true that from the mid-1990s, India has been behind the curve in use cases while being ahead in technology, we seem to be at a new point where this gap could be bridged.

Technology is critical to India’s digital ambition. The constantly evolving need for higher speed, along with plans for smart cities, industrial automation, connected devices, etc, make 5G inevitable. So, it becomes critical for both operators and GoI to develop and adopt it in a speedy and efficient manner.

Four foundational blocks need to come together to make 5G a reality:


Spectrum availability:
Department of telecommunications (DoT) has earmarked 300 MHz in the mid-band spectrum of the 3.3-3.6 GHz range for 5G. This offers good coverage and speed, and has wide international consensus. Also, the sub-1GHz band, given its strength for good indoor coverage, is best suited for the massive Internet of Things (IoT) use cases, but is currently being used for broadcasting and radiolocation services. In addition, the band above 24 GHz is also getting acceptance globally because of lightning fast data rates (over 2Gbps) and huge capacity.

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While finding the right spectrum is important, the main challenge will be pricing. The Telecom Regulatory Authority of India (Trai) has suggested a base price at Rs 492 crore per MHz — an additional burden of about Rs 50,000 crore for 100 MHz. Its proposed reserve price is up to six times higher than that of similar spectrum sold recently in countries like South Korea, Spain, Britain and Italy. This makes for a really weak business case for telcos, many of whom are already reeling under severe financial challenges.

Technology:

5G deployment will require overcoming several technological and operational challenges, the biggest one being extensive fiberisation. Most operators are at about 20-25% fiberisation. However, a truly 5G experience will require upwards of 80% fiberisation. The antennae will also need to be upgraded at every site while requiring virtualisation of the core and the access with an entirely new orchestration layer to achieve the critical feature of 5G network slicing.

Economics:

Telecom operators are burdened with debt to the tune of Rs 4 lakh crore. They are still trying to fully monetise 4G services. Why, then, will investing in 5G at this point be wise? 5G deployment will be a long-term, strategic decision for any operator, as it will involve a heavy upfront investment with a long payback period. But in the near term, extreme mobile broadband (eMBB) and fixed wireless access (FWA) can provide monetisation opportunities, while also helping divert traffic from 4G to a more efficient 5G, thereby reducing network costs.

Enterprise use cases that utilise massive IoT with ultra-reliable, low-latency communications to transform verticals such as manufacturing, utilities, healthcare, retail, agriculture and automotive, will gain significant efficiencies as they adopt 5G at scale.

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Policy:

Apart from creating a positive environment for 5G’s launch in India, the biggest issue GoI needs to resolve is to help telcos overcome the prevailing financial crisis.

The spectrum policy should focus on incentivising heavy investment in 5G, including support for long-term, exclusive, technology-neutral spectrum licences, instead of trying to look for financial windfall right away. GoI and operators should collaborate to create an ecosystem capable of leveraging 5G technology. A favourable policy will indirectly enable advances in areas including employment, technology and investment.

The shift from 4G to 5G is not incremental in nature, but transformational. Given what it means for the entire ecosystem, skipping it is not a choice India can afford.

(Kapoor and Banerjee are senior adviser and managing director, respectively, Boston Consulting Group)





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