Decoding the 5G delay

December 1, 2018, marked the first launch of a commercial 5g network in the world. Since then the growth has witnessed greater leaps and bounds with several network operators introducing their own standalone 5g service in their respective circles. We are in 2022 and India still has not fixed a date for auctioning the airwaves, which is likely to get further delayed with the private allotment row and COAI taking up the debate further.

Now what is more important to understand is did India miss out on opportunities caused by the 4-year divide, well the answer to that is complex and is decoded in the simplest way possible.

To begin with, 5g brings with itself a huge reduction in latency(response time), which is very vital for online gaming compared to the previous generation.

Also, users can experience a significant increase in data speed, especially in highly congested areas. Adding to these it opens up a whole new world of the digital ecosystem with the use case of IoT devices improving to never before numbers, also industry 4.0 and further will be powered by such communication tools. The point to be noted is that some of these capabilities could be attributed to the developments in previous generation networks which established roots for this digital ecosystem to grow.

India has taken the time to adopt new technologies, it is because operators wanted a fail-proof solution to take a reasonable return on huge sums of capital invested. Adding to that the services for India need to be adjusted for Indian conditions, huge population to serve could act as a constraint initially. We saw accelerated adoption of 4th generation network only after late 2015.

Such steady adoption created a favorable windfall for almost every business house and startup, we saw record e-commerce activity, online banking and several FinTech set foot in the process, for instance, physical data vouchers are now almost extinct with the advent of utility payment service.

Even after eight years of deployment 4g still has a lot to offer to the Indian customers at least for the near future. Speeds recorded by the Indian operators are among the lowest in the world, quality of service has vast room to improve.

5g delay is again something to be observed using the economics lens, as per Counterpoint research CY 2021 saw around 17% of smartphones shipped with 5g enabled soc, which is still very low. Also, the reserve prices for 5g airwaves are considered way too expensive by the telecom operators, with data prices are cheapest in the world forcing them to conserve cash to meet operating expenses. These companies need to invest billions of dollars to set up a PAN India network which will force the companies to increase the tariff, but the fear of customer churn prevents them from doing so.

service in Adding to these woes Indian government changed its stance in involving Chinese vendors for 5g deployment due to the global pullout by the governments to remove Huawei from its core networks. India now has to depend on the European and Korean vendors for equipment supplies or to create a homegrown technology like jio.

These investments would have taken a huge toll on the balance sheet of companies if they pushed to launch 5g in line with western counterparts. Now with time, this equipment manufacturing is expected to attain economies of scale, the emergence of more customers to serve along with required infrastructure backhaul. The second half of this year is considered a high time for the nation to see the launch of next-generation services. Four years might seem long but this delay in fact has benefitted all the stakeholders associated with this service. Subscribe to our newsletter for more updates on the topic.