India currently has 159 million 5G subscribers, or a penetration of 15 per cent, a report by Bank of America Global Research said on Friday.
The report says this figure could grow to more than 490 million subscribers (42 per cent penetration) by 2028. 5G user growth has surpassed expectations over the past few months.
In December, the government had announced that 100 million subscribers had been reached.
The report also stressed that there may be one tariff hike in the second half of 2024. Medium-term Average Revenue Per Users (ARPUs) are likely to reach Rs 250 and would reach Rs 300 over five to seven years, it said.
Bharti Airtel's ARPU stood at Rs 203 in the second quarter of FY24, while Reliance Jio and Vodafone Idea's ARPU stood at Rs 181.7 and Rs 142 in the same quarter.
In terms of capital expenditure outlook, FY25 (2024-25) could be largely similar year-on-year, as operators roll out and expand 5G network and do backhaul upgrades, beyond which there would be a drop in spending, the report pointed out. 'FY26 could see capex intensity drop, as 5G rollout gets largely stabilised,' it said.
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However, the report pointed out that latency issues remain to be solved.
Digital revenues for a few successful telcos form 5-10 per cent of the top line, and a few likely monetisable areas are cloud gaming, augmented and virtual reality.
'Telcos are currently using AI internally in their operations like automating/making networks efficient, with end-user case some point away,' it said.