India 'knocks on doors of new era' with launch of 5G services

India's 5G roll-out faces hurdles such as the country's inadequate telecom infrastructure and low 5G handset penetration. PHOTO: REUTERS

NEW DELHI - India officially launched 5G telecommunication services on Saturday, a key step in the government's goal to achieve a US$1 trillion (S$1.43 trillion) digital economy by FY2026.

Launching the services at the 6th India Mobile Congress in Delhi, Prime Minister Narendra Modi described it as "a knock on the doors of a new era" and the "beginning of infinite opportunities".

5G, the fifth-generation standard for mobile networks, supports ultra-high speed wireless Internet, enabling wider adoption of emerging technologies such as automated warehouses, drone deliveries and robotics-driven healthcare.

One of the 5G use cases demonstrated at the launch involved the real-time monitoring of a Delhi Metro tunnel construction site remotely in 3D, which can enhance the safety of workers.

5G services for the public will be rolled out in phases; 13 key cities such as Delhi, Mumbai, Kolkata and Chennai are first on the list and expected to have access to this technology by the end of this year.

Jio, India's largest mobile network operator with more than 426 million subscribers, has said it will cover every town in India with its 5G services by December 2023. Airtel, another operator, expects to do so by March 2024.

5G subscriptions in India, the world's second-biggest smartphone market after China, could reach 500 million users by the end of 2027, telecommunications solutions provider Ericsson said in a report released in June. This would represent nearly 40 per cent of the country's mobile subscriptions.

The government has said it will invest close to US$30 billion to ensure last-mile network accessibility for 4G and 5G services across the country.

But the widespread roll-out of 5G services faces hurdles such as an inadequate telecoms infrastructure and low 5G handset penetration.

A key requirement for efficient 5G services, for instance, is a high degree of "fiberisation", which involves connecting telecoms towers via optical-fibre cables.

Only around 33 per cent of such towers in India are fiberised now, which indicates that 5G services may be reserved for large cities "until the fibre gets to twice that number of towers", according to Delhi-based public policy consultant Prasanto K. Roy.

The government aims to fiberise 70 per cent of the towers by 2024-25, which would require about 2.2 trillion rupees (S$38.6 billion). Another 2.5 trillion rupees will be needed to set up 1.5 million towers in the next four years, according to industry estimates.

"Telcos have struggled with adequate tower density even for 4G, but 5G needs a much higher tower density - increasing upfront investment," said Mr Roy.

He, however, noted that capital expenditure investments by telcos would be limited, given their high debt burden, arising from spectrum fees and initial 5G investments, as well as their stagnant average revenue per user.

Given the infrastructure-related limitations, Mr Tarun Pathak, research director at Counterpoint, a technology market research firm, said it would take another three to four years for successful 5G use cases to emerge in India.

The immediate focus, he told The Sunday Times, should be on ramping up infrastructure to ensure that customers feel a noticeable difference when they switch from 4G to 5G services.

"Many had switched from 2G directly to 4G earlier, a shift that was quite perceptible," he added. "So when they now shift from 4G to 5G, the move needs to be motivating as well. Otherwise, it would be a dampener."

The high price of 5G smartphones also remains an issue for the moment.

However, Jio has announced that it will launch an "ultra-affordable" 5G smartphone, which Counterpoint recently reported could be in the 8,000 to 12,000 rupee price range.

Join ST's Telegram channel and get the latest breaking news delivered to you.