The Department of Telecommunications (DoT) will auction 5G spectrum on July 26 in India. Even as the government continues to work on the process of auctioning 5G spectrum, India’s leading service providers are testing 5G at multiple locations, focusing on use cases for both urban and rural consumers. These include FWA (Fixed Wireless Access) for rural broadband, mobile cloud gaming, cloud-connected robotics, and remote healthcare.
And from the general user perspective, there is a huge anticipation for the rollout of 5G services, which is will happen around September. According to a mobility report by telecom hardware company Ericsson, by 2027, 40% of subscribers in India --- 500 million --- will be on 5G networks. The report also estimates that by 2027, 56% of total mobile traffic in India will be carried by 5G networks. By then, smartphone users in the region are forecast to consume 50GB of data per month on average.
There is significant consumer interest in adopting 5G, Ericsson said and added that 40 million smartphone users could take up 5G in its first year of availability. Additionally, 21% of smartphone users indicated that they already have a 5G-ready device.
Indian consumers also claim to be willing to pay 50% more for 5G bundled plans. "This presents a unique opportunity to grow revenue within a market that has historically had very low ARPU".
Challenges in 5G adoption
But 5G also throws up challenges for service providers. Indian service providers have recently been raising the price of data (the average price of 1GB of mobile data reached $0.68 in 2021) and mobile services revenue has continued to grow. Despite this, service provider ARPU remains low. Moreover, India has some of the highest prices for spectrum in the world, constraining service providers’ ability to invest in infrastructure.
According to an Ericsson-Arthur D Little study, 5G will enable Indian mobile service providers to generate $17 billion 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, as Indian enterprises consider 5G to be the most important technology for their digital strategies.
5G will also enable service providers to launch new services for consumers, including home broadband (5G FWA), enhanced video, multiplayer mobile gaming, and AR/VR services. Consumers anticipate that service providers will offer pricing plans with service bundling and data sharing.
In the India region as a whole, mobile data traffic has grown by more than 15 times in the past 5 years (from 0.8EB per month to 13EB per month in 2021) and is expected to more than double in the next 3 years. With the projected traffic increase, service providers would benefit significantly from the efficiency gains provided by 5G.
As subscribers migrate to 5G, 4G subscriptions are forecast to decline annually to an estimated 700 million subscriptions in 2027. For the record, the share of 4G has grown from 9% of mobile subscriptions in 2016 to 68% in 2021.
