This article is part of our Essential Guide: Essential Guide: State of 5G in APAC

India gears up for 5G but challenges remain

The country’s upcoming spectrum auction marks the start of larger scale deployments of 5G in the subcontinent, but telcos will need to find a way to address high infrastructure costs and monetise their investments

As the world’s second-largest mobile market, India has been leading the charge in adopting mobile technologies, with the penetration of 4G services growing from just 9% in 2016 to 68% last year. A similar momentum is expected for 5G services, a study has found.

According to the latest Ericsson mobility report, 39% of mobile subscriptions in India are expected to be of the 5G variety by 2027, riding on the country’s rapid migration to 4G and fast-growing adoption of smartphones, said Ng Thiaw Seng, Ericsson’s head of network evolution in Southeast Asia, Oceania and India.

“From our survey, Indian consumers and enterprises have shown eagerness to adopt 5G,” Thiaw said, noting that India will be conducting a 5G spectrum auction next month following trials by Indian telcos to test 5G applications such as cloud gaming, robotics and telehealth.

Last year, Bharti Airtel also conducted a fixed wireless access (FWA) trial using 5G trial spectrum allocated by India’s department of telecommunications. Using equipment from Ericsson, the trial delivered over 200Mbps of throughput on a 5G FWA device over 10km. A commercial 5G smartphone was also able to connect to the test network and record access speeds of over 100Mbps.

But whether 5G will realise its full potential in India, at least in the consumer market, will depend on handset prices. Thiaw said the availability of cheaper 5G handsets under $200 in about two years would drive adoption in rural areas. Most early adopters of 5G are likely to be in major cities such as New Delhi and Mumbai, he added.

Swati Verma, associate project manager of thematic research at GlobalData, noted that infrastructure costs could also hinder mass adoption of 5G in India, adding that the cut-throat competition in 4G services had left Indian telcos struggling for profitability, with the price of spectrum in India several times higher than in other countries.

“The high cost of infrastructure and spectrum might mean users pay a premium for 5G services, and as a result, price-sensitive Indian consumers may be reluctant to adopt the technology,” she said.

Indian telcos have been raising prices for data (the average price of 1GB of mobile data reached $0.68 in 2021), fuelling the growth of mobile services revenues. Despite this, their average revenues per user remains low.

“The high cost of infrastructure and spectrum might mean users pay a premium for 5G services, and as a result, price-sensitive Indian consumers may be reluctant to adopt the technology”
Swati Verma, GlobalData

Citing findings from Ericsson’s research, Thiaw noted that about a third of operators globally charge higher prices for 5G in service bundles that include larger data buckets and gaming services, while the rest are not charging a price premium.

Against this backdrop, Thiaw said Indian operators should proactively find a way to bundle services for the premium segments of the market, and also encourage more price-sensitive consumers to switch to 5G services.

In the enterprise segment, where much of 5G’s potential lies, Thiaw said Ericsson has been working with telcos to test business applications of 5G. These include using augmented and virtual reality glasses to provide remote assistance, as well as helping manufacturers reduce their reliance on wired connections to improve the flexibility of factory operations.

According to Ericsson’s research, 5G will enable Indian telcos to generate $17bn in incremental revenue from enterprises by 2030. Much of this is projected to be driven by the adoption of 5G in the manufacturing, energy and utilities, ICT and retail industries. Verma, however, noted that India has yet to develop relevant use cases that can be monetised.

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