5G to drive India’s mobile data revenue by 67% from 2020-2026: Report

The much-anticipated 5G spectrum auction in India is all set to begin on 26 July 2022. Despite concerns around radiation levels or worries around higher prices, the next generation of mobile broadband will drive mobile data usage in the country by 29% and data revenue by 67% between 2020 and 2026, forecasts data and analytics firm, GlobalData.

Major telecom players in India — Airtel, Reliance Jio and Vodafone Idea — are reportedly keen to participate in the 5G spectrum auction to expand their service offerings and increase revenues, across the country.

Initially be available in a handful of cities, as the Department of Telecommunications (DoT) in a statement has confirmed that the 5G services will be available in as many as 13 cities across the country in 2022. These cities include Delhi, Gurugram, Bengaluru, Kolkata, Chandigarh, Jamnagar, Ahmedabad, Chennai, Hyderabad, Lucknow, Pune, and Gandhi Nagar.

All three major telecom operators have already set up 5G trial sites in these cities. Jio that was among the first telecom operator to launch 5G services in India, said that users can easily upgrade to a 5G network from 4G, owing to the telco’s converged network infrastructure.

Also read: What is a private 5G network?

“Jio’s 5G will be powered by the indigenously developed network, hardware and technology components,” the company’s chairman Mukesh Ambani said. The telco may reportedly buy 700MHz in the upcoming auction to fulfill its 5G ambitions unless the government announced the auction of 3300-3600MHz, which is globally popular for 5G deployments at the moment.

Airtel conducted India’s first 5G trial with Huawei in Gurgaon back in 2018. The company believes that the next generation of mobile technology needs more time to be rolled out across the country. But earlier, Bharti Airtel CEO Gopal Vittal, said in an analyst call that commercial 5G service will see a limited rollout in 2022 and 2023 because the ecosystem is not developed.  

Nonetheless, the telco which announced the deployment of India’s first state-of-the-art Massive Multiple-Input Multiple-Output (MIMO) technology, which is a key enabler for 5G networks, in 2017, is 5G-ready. Airtel said that it has already deployed the technology in Bangalore, Kolkata, and several other regions in the country.

Vodafone-Idea or Vi plans to launch 5G as soon as the spectrum is made available through auction. The company has upgraded its 4G network with 5G architecture and other technologies like dynamic spectrum refarming (DSR) and MIMO. “Our network is very much 5G-ready. When the 5G auction takes place, we will be able to launch 5G. However, there is a need to develop India 5G use cases. India is unique and some global use cases might not be relevant,” Vodafone Idea MD and CEO Ravinder Takkar too said during the AGM meeting last year. The telco has also proposed 5G trials with multiple vendors, including Huawei and Ericsson.

Commenting on the situation of the telcos, in the 5G spectrum auction, Priya Toppo, Analyst in Thematic Intelligence team at GlobalData, said, “Airtel is already testing 5G equipment. However, questions remain over whether it can afford to build 5G meaningfully. Reliance Jio’s massive financial resources and existing market position will likely allow it to gain a market-leading position. Vodafone Idea, on the other hand, is likely to struggle due to its weakening customer base and financial position.”

State-owned telco BSNL’s did announce its plan to build a 5G corridor in Delhi back in 2019, but there hasn’t been any update on the matter since then. The corridor would showcase the possible use of new technology with the optimum data speeds at 5G levels.

As the majority of Indian consumers are still uncertain about the adoption of 5G, considering the imminent increase in data charges and smartphone prices, especially in rural regions, most of the mobile subscribers will still be using 4G services. As a result, GlobalData said that only 27% of the country’s mobile subscribers (around 329 million) will be using 5G services by 2026.

Swedish telecom gear-maker, Ericsson that is betting big on the 5G roll-out, has pegged 5G-enabled digitization revenues at nearly $17 billion for India. “But spectrum should be made available at affordable prices for 5G to take off,” Nitin Bansal, head, Ericsson India, said in an interview with Mint. At least 40 million Indian smartphone consumers are willing to pay a premium to subscribe to 5G plans with bundled digital services in the first year of the launch, he added.

In a report published last year, telecom Ericsson, 5G connections across the globe are estimated to be 3.5 billion and India will account for 350 million subscriptions by 2026.

Toppo also offered an optimistic view on the 5G innovations that will redefine the future of telecom in India, “Despite higher data prices, 5G promises superior service quality compared to the existing 4G networks. This should encourage digital businesses including edtech, healthtech, agritech, fintech, and e-commerce to further accelerate 5G adoption in India,” she said.