Half of all Indian cos set to boost ICT budget post 5G rollout: KPMG study

The report adds that over 85% of Indian enterprises from various sectors are expecting up to 20% return on investments made in 5G and industry 4.0 use cases

Around 50 per cent of Indian enterprises are set to increase their budget allocation for Information and Communications Technology (ICT) and industry 4.0 use cases, as 5G services roll out in the next 2-5 years, says a KPMG India report released on Sunday.

The report adds that over 85 per cent of Indian enterprises from various sectors are expecting up to 20 per cent return on investment (ROI) in 5G and industry 4.0 use cases. Applications such as non-time-critical communication, connected goods, seamless ecosystem communication, and remote operations are expected to attract the most returns.

Targeting efficiency, quality management, and new revenue models are prime areas where 5G is expected to be deployed by enterprises. Globally, almost 51 per cent of the enterprises are looking to deploy 5G in conjunction with other wired and unlicensed wireless technologies, the study finds.

KPMG India released its Enterprise Digital Transformation Survey 2022 based on a survey of over 350 global enterprises across manufacturing, healthcare, smart cities and utilities, telecom, media, and technology verticals. It expects inconsistent network infrastructure, low adaptability in the multi-vendor ecosystem, and integration with legacy networks to become top technical and business challenges in the deployment of 5G in the country.

“In the next 2-5 years, there is a visible increase in the quantum of budget allotted for ICT as well as 5G / industry 4.0 use cases. More than 85 per cent of enterprises across multiple sectors are expecting up to 20 per cent ROI on various 5G/industry 4.0 use-cases,” the survey said.

The report recommends telecom service providers (TSPs) carry out network upgrades with a continual focus on building network slicing, edge-AI compute models, beamforming, dynamic spectrum sharing, access technology-agnostic user equipment functioning, and network analytics.

It further suggests reducing the total cost of ownership (TCO) to protect margins, while building robust networks and routes to market for 5G monetisation.

Commenting on the report, Purushothaman KG, Head of Digital Solutions, KPMG in India said, “Our study shows that 5G will become the most transformational accelerator to drive digital growth and achieve the larger vision of digital India. Edge computing, AI-based cloud services, open source intelligence, and telemetry systems are expected to be pervasive. India will see 5G drive growth not only of the telecom sector, making it once again a sunrise sector, but drive the growth and digital transformation ambitions across industries.”

The study also calls for a speedier fibre deployment to improve the tower fiberisation from current levels. A forward-looking policy paradigm that focuses on increasing access to affordable services and devices across the nation is imperative for the journey ahead.

Yezdi Nagporewalla, the chief executive officer (CEO) at KPMG in India, said, “5G will be a catalyst to India’s path of reaching 20% digital GDP (by 2025). Today, among other things, digital transformation initiatives through smart factories, remote healthcare, and digital schools are real and functioning. With 5G, many of these initiatives will achieve scale and acceleration. The Indian telecom market offers the right ingredients to have its justifiable impact. This impact could range up to 0.5 per cent of incremental GDP growth due to elements of flexibility, low latency, and expansive connectivity, all of which will have a positive impact on businesses and their users (direct and indirect).”