5G will rejig value chains: Nokia’s Nishant Batra

The biggest overhaul that will be seen in telecommunications will be the overthrow of value chains. Right now, the value chain has vendors like me selling their capabilities to operators whose core competencies will be procurement and yield management; it is pretty simple. 

The overhaul in value chains is coming as more sources of revenue apart from subscriptions start to arise from telecommunications — such as enterprises. Now enterprises can go to system integrators to get their industries outfitted with 3GPP (3rd Generation Partnership Project — protocols for mobile telecommunications) technologies.

System integrators can build a variety of applications over 5G. They can go to vendors or telecom operators to build these systems. Operators might not be selling subscriptions, but rather KPIs or software to these system integrators. This is the sort of rejigging in value chains that I expect by the end of 5G or the beginning of 6G. Enterprise applications will become the fastest growing use-cases with the onset of 5G.

Serving enterprises will bring massive productivity gains to India. Bringing private networks to enterprises is the easiest way to achieve the ‘$5 trillion economy by 2026’ goal, from the perspective of private investment.

Another thing to consider is serving enterprises with the least friction possible.

If a spectrum is given to enterprises, it must be ensured that enterprises use this spectrum. In several countries, direct provision was attempted but the spectrum was not used. However, there are several models that are possible and exist in the world regarding how enterprises can be served.

If you look at the device price point for 5G, the cheapest 5G device in India is ₹17,000; the majority of Indians cannot afford this. So, 5G is delayed for the niche, which is well served by 4G in any case. The real purpose of 5G is served when the masses get it, for which devices need to be available at ₹7,000–8,000.

Most 5G networks deployed across the world are for broadband purposes only; but those use-cases are not too different from what consumers were getting with 4G.

The real differentiator for 5G will come with the deployment of private networks. Nokia has shipped a significant amount of mixed 4G–5G and increasingly, 5G networks for enterprise purposes across the world. Growth for enterprise-level applications is outpacing broadband. Start-ups exploring enterprise-based applications (enterprise edge) are seeing massive valuation growth. Once a platform is there, you will see such start-ups emerge here and develop India-specific use-cases for 5G as well.

You will a unicorn emerge in India in this domain by the end of this decade. 

The purposes of opening the system is to give procurement gains. If my largest customers want to open their networks for procurement gains, I have no issue as long as I am making market leading products. They will buy spectrum for billions. If they buy sub-par products, they will end up wasting spectrum. So we will compete on our products.

There will be newcomers who will enter the space but our belief is that we will gain out of this. As long as focus our R&D in places where there is differentiation, we will benefit; and there are a lot of areas where differentiation can be done.