Leveraging technology

Telcos will need to review 5G- specific tariffs

Since the mega spectrum auction a year ago, India has made significant progress in the rollout of 5G telecom services. But the lack of verifiable use cases is coming in the way of fast adoption of cutting-edge technology that promises a whole new universe for enterprises and businesses across sectors. 5G services, which basically mean mobile internet at about 10 times the speed of 4G, were launched in India on October 1, 2022, within two months of the spectrum auction that generated revenues worth Rs 1.5 trillion. Although industry stakeholders have cited numerous use cases in sectors such as healthcare, education, consumer goods, online gaming and entertainment, riding on artificial intelligence and internet of things, so far 5G has mostly been used in the country for similar functions as 4G.

Prime Minister Narendra Modi in his Independence Day speech last week noted that India is the fastest in the world to roll out 5G, having reached 700 districts already. While the pace of the rollout is praiseworthy, the challenges in putting together a 5G ecosystem in place deserve attention. To develop India-specific 5G use cases, while the Telecom Regulatory Authority of India (Trai) is working with ministries of education, health and agriculture among others, industry should be part of such engagements. The effort must also be to make 5G services, and subsequently 6G services, accessible to enterprises and individuals in the remotest parts of the country.  Monetisation from 5G services is another issue that the private sector must focus on to be able to make a mark. Till now, no telecom service provider has come out with a 5G- specific tariff. In a country where headline tariffs are among the lowest, telcos should evaluate if it’s feasible for a top-end technology like 5G to be offered at the same rate as 4G or 3G. Now that India is nearing the one-year mark of the 5G launch, it’s a good time for the players to review their tariffs appropriately. There’s been enough disruption in the telecom industry already, which has led to a duopoly-like situation. Further such disruption must be avoided.

Vodafone Idea, which is stuck with high debt, is yet to start a 5G roll out. Both Vodafone Idea and the Adani Data Networks, which had taken the 5G licence last year, may have to pay a penalty for missing the minimum rollout deadline within a year of buying the airwaves. State-owned Bharat Sanchar Nigam Ltd is looking at starting 5G services in the middle of next year. In that backdrop, there are only two service providers—Bharti Airtel and Reliance Jio—that need to focus on 5G tariffs and monetisation to be able to make good their spend towards spectrum and capital expenditure. Estimates suggest around Rs 1 trillion of expenses by each leading telco in the past two years, a large chunk of which was for 5G services. While Jio is planning a pan-India coverage by December 2023, Airtel is looking to reach all major Indian cities by year-end. At the 5G launch last year, the Prime Minister had unveiled some 5G use cases, among other things, in education, health, worker safety, transport, logistics and agriculture. But to unlock the tremendous possibilities and compete with the best in the world, the industry needs to step up.