Why is 5G geting delayed in India? What India is missing out on because of this?

5th generation mobile network, also called 5G, will prove to be much faster than the current 4G networks, with negligible response delay. The peak network data speeds are expected to be in the range of 2 to 20 Gigabits per second or Gbps. At present 4G is giving us 6 to 7 Mbps in India which is sufficient for playing online games, browsing the internet and streaming netflix. 5G is expected to help build newer, emerging technologies such as IOT and machine-to-machine interactions giving rise to Industrial Revolution 4.0. Some countries such as South Korea and the U.S. have already begun rolling out commercial 5G services.

But there are a certain challenges delaying the enrollment of 5G in India. Before going to the challenges, we must know what opportunities we are missing out by delaying 5G in India

WHY INDIA NEEDS 5G?

According to a government-appointed panel, 5G is expected to create a cumulative economic impact of $1 trillion in India by 2035. According to another report by Ericsson, 5G enabled digitization revenue potential in India will be above $27 billion by 2026. 

The IT Sector was one of the least affected due to the availability of good internet connections in cities enabling work-from-home facilities for its employees. Apps such as Zoom, Whatsapp, MS Teams, Skype, etc enabled smooth running of conferences and, therefore, businesses. Schools and Colleges too, have depended on online conference calls to conduct regular classes and exams for students. Apart from this there have been celebrations, doctors' appointments, binge watching videos, etc. through online platforms. In such scenarios, where the use of internet has been increasing, telecom enterprises are in need of a massive data capacity that the 5G services offer.

Another important benefit of 5G in India is that it can provide "smart" infrastructure at lower costs and faster delivery. This sensor embedded network will allow a much better integration of agriculture, manufacturing and delivery of end-consumer products, in addition to making transport infrastructure smart and more efficient. In all 5G can solve supply chain shortages to meet demands at lower costs and better efficencies, impacting the overall Indian economy at agriculture, manufacturing and services levels.

With all these benefits and many more, India must ensure 5G connectivities with immediate effect.

THE CHALLENGES 

At present 4G accounts for 96% of India's data traffic. However, more than 50% of India's users still depend on 2G which is not so conducive for data services. While Reliance Jio wants India to end 2G services and the government too wants BSNL to stop investing in 2G, telecom companies such as Airtel, Vodafone-Idea and, even, BSNL have around 400 million 2G subscribers which contributes to nearly half of their revenues. These debt-ridden telecom companies lack the necessary incentives to discontinue 2G. Hence, this is going to be a task for the Telecom Regulatory Authority of India (TRAI) and the Department of Telecommunications (DoT) which would have to take significant steps to remove barriers in discontinuing 2G and introducing 5G services in India.

Meanwhile, TRAI has recommended a reserve price for the auction of 5G spectrum in the 3.3-3.4 GHz and 3.4-3.5 GHz bands. However, telecom operators seem reluctant to participate in the auction. They claim that the reserve price of ₹490 crore per MHz is high and the amount of spectrum on offer is insufficient. Indian operators have far less spectrum in comparison to international operators. The 5G spectrum pricing is atleast 5 times of what the global telecos pay for spectrum! It is this high investment cost that is not giving the confidence to telecom companies about the Return on Investment and have not been interested in participating in the auctions.

Added to this are the discouraging taxes. Telecom companies have to pay an Adjusted Gross Revenue charged by the government under the Department of Telecommunications. It consists of the spectrum usage charges and the licensing fees which is currently 3% and 6% of "all" the revenues earned by the telecom companies. By "all", I mean both, telecom and non-telecom related revenues such as asset sales and deposit interests. The idea of adjusted gross revenue is itself flawed. It rewards the weak, inefficient players while the revenue generating, profitable players end up paying more! 

Despite these challenges the government has repeatedly spoken of India’s aspirations to deploy 5G and to be a significant player in its development and growth. A high-level forum was appointed in 2016 to recommend a 5G strategy for India. The National Digital Communications Policy, 2018, has also highlighted its potential. There needs to be a way forward to overcome these challenges.

THE WAY FORWARD

As we have already seen, one of the reasons Indian telecos are not enthusiastic about 5G is because they lack incentives. To promote 5G, government must incentivize the telecos by reducing AGR and instead, recover from these losses through growth and tax collections. 

The government can also incentivize the manufacure of products using 5G technologies and promote 5g Start-Ups. 

Idle spectrum must be freed up and efficient use of spectrum can be rewarded. 

More funds must also be alloted in the Union Budget to build the 5G infrastructure as it requires newer hardware and software for its upgradation. Accelerated deployment of broadband infrastructure  with total coverage of 10 gbps across urban areas and atleast 1 gbps across rural areas would help bridge the digital divide to some extent. 5G offers a better capacity than 4G, wherein more number of devices can be connected to the internet without slowing the network connectivity as seen with the present 4G networks. 

In addition, 5G would support online education for both rural and urban India. The problem we see at present, especially during this pandemic, is that while students in urban areas have uninterrupted education, students of rural India are losing out on opportunities especially during competitive exams due to lack of internet.

Appropriate test-beds and technology platforms to advance innovation and research into 5G will help India compete against global players.

5G will act as the catalyst for Digital India. It can also lead to digital transformation in India. Hence, there is a need to align the Digital India programme with 5G technology.

The World Economic Forum predicts that by 2023 there will be about 9.1 billion mobile subscriptions. It provides an opportunity for Indian industries to reach out to global markets. It can help in better service delivery, faster access to services and deeper penetration of digital services.

Hence, the government must to act upon the above points speedily to not miss the 5G bus at a time when India needs such opportunities that would end up creating newer, better jobs and, thus, impacting the overall economy.