Editorial

5G foundation

| Updated on December 11, 2020

The Centre should prepare the ground well before initiating work on 5G rollout

Prime Minister Narendra Modi is right in highlighting the importance of 5G technology to empower millions of Indians. There is no doubt that the fifth generation of wireless technology will bring massive improvements in broadband services and industrial applications with the potential to drastically alter societies. However, the key question is whether India is ready for this technology. There are five issues that the Centre needs to address before initiating roll out of 5G services. First, it has to clear the air on spectrum availability and earmark frequency bands aligned with the global standards. Spectrum in the 3300-3600 MHz frequency band was envisaged for the 5G services. But only 175 MHz of airwaves has been earmarked for 5G after the ISRO and the Department of Space sought rights to use parts of this frequency band. Typically, 5G operators need a contiguous block of 100 MHz of spectrum to offer any meaningful service. The current allocation is grossly inadequate.

Second, there is a need to move away from the existing mechanism of pricing spectrum on a per MHz basis. If the Centre were to fix the floor price based on the price realised in the last auction then no operator would be able to afford 5G spectrum. The pricing will have to be worked out keeping in mind the financial stress in the sector and affordability of services. Third, there should be clarity on whether Chinese equipment vendors, including Huawei and ZTE, will be allowed to supply 5G gear. Network contracts are worth billions of dollars and are spread over a 5- to 10-year time frame. Telecom companies cannot place these bets under the shadow of an imminent ban on Chinese vendors. Fourth, the Centre must address the issue of financial stress in the sector to avoid a market duopoly. There are only four players left of which two — BSNL and Vodafone Idea — are struggling for survival. Pan- India 5G network rollout will require huge capital which may not be viable for any operator other than Reliance Jio when the industry is struggling under a debt of over ₹4-lakh crore. The Centre should help by lowering licence fees and spectrum usage charges so that telecom companies can free up capital that can then be invested in network expansion.

Finally, the regulator must ensure that operators are meeting the quality of service parameters of existing 2G and 4G networks before embarking on a new 5G platform. Consumers are still grappling with basic network issues like call drops and interrupted data services. There are still areas where 4G networks have not stabilised causing frequent disruptions in Internet services. Clearly, the Centre has a lot of work to do before it rolls out 5G.

Published on December 11, 2020

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