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2022 could be a signal year for 5G services in the country

Ayushi Kar | | Updated on: Jan 01, 2022

But experts do not rule out the possibility of spectrum auctions being put off

2021 will possibly be remembered as the year which breathed a new lease of life into the struggling telecom sector which is now finally free to invest resources into the much-awaited 5G race. However, will consumers be able to avail the services?

According to experts, even if the Department of Telecommunications is able to hold 5G spectrum auctions by July 2022, network rollout of 5G related services will happen only at the fag end of the year for consumer-specific applications, and that too for a very small consumer segment.

5G is the fifth generation of cellular network, which promises data speeds that are 100 times faster than 4G. Telecom operators to enterprises including automakers are promising consumers a hyper connected world with connected cars to connected homes, metaverse, augmented reality and immersive gaming.

 

The story, at least for 2022 is going to be a lot simpler, however. Prashant Singhal, EY Emerging Markets Technology, Media & Entertainment and Telecommunications (TMT) Sector Leader explains, “Should the 5G spectrum auctions take place in July, it will still take another couple of months for telcos to get the spectrum after completing necessary processes and payments from the government. After which we could start seeing some 5G network rollout occur by November- December of 2022.”

According to Singhal, 2022 is going to be the demonstrative or experiential year for 5G services, and mass network rollout will commence in 2023.

High tariffs

Although 5G holds the most promise for enterprise-level applications, experts believe that the first iteration of 5G services is going to remain consumer-based. Nitin Bansal, Head of Ericsson India and Head of Network Solutions for South-East Asia, Oceania and India said, “The early use cases of 5G will be enhanced mobile broadband (eMBB) and fixed wireless access that will help address the concern around limited fixed broadband penetration levels in India and improve the data experience while on the move.”

Therefore, the first iteration of 5G services can probably deliver higher mobile broadband speeds (upto 50-60 Mbps) that are only achievable through fiberised broadband. These will be most likely available only in limited geographies and at the highest tariff brackets, only a certain higher consumer segment is likely to avail of this. Other interested parties could include technology enthusiasts, immersive and multiplayer gaming applications where high speed and good quality video is in demand.

“At most 2-3 per cent of households will use 5G by the end of 2022,” said an expert. Isha Chaudhary, Director, CRISIL Research believes, however, that operators are likely to keep 5G prices close to 4G services in order to encourage users to upgrade.

Delayed auction

Meanwhile, there are naysayers who believe that the 5G spectrum auction, which has already been delayed by six months, could be delayed again. Telecom operators, Bharti Airtel and Vodafone do not have the financial wherewithal to compete with Jio at the moment according to some experts, and therefore could seek future delays.

In anticipation of 5G investment, Bharti has done a ₹21,000 crore rights issue this year and Vodafone is also planning a fundraiser.

“Jio could push for timely auctions,” said an expert on conditions of anonymity, “although being the unchallenged market leader, there is no pressing competitive need,” he said.

“The Government also does not have an incentive to hold the auctions as soon as possible, since they are unlikely to be paid promptly by the telcos.” Therefore the scenario that the 5G revolution skips 2022 entirely also still looms.

Published on December 31, 2021
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