India's 5G Revolution: Transforming Connectivity and Unlocking Growth Opportunities

India and the 5G Transformation

In a remote district in India, a corporate employee is exhibiting an important project to stakeholders while somewhere equally far-flung, an influencer is having a lively one-on-one discussion with her followers. These aren’t isolated cases; rather, scenes like this play out regularly across India, highlighting India’s growing digitalization.

Barely a few years ago, congested networks, sluggish speeds, and connectivity issues were the norm in India. Fast forward to today and you see mobile towers and 5G Cell Sites crisscrossing the length and breadth of the country delivering lightning-fast connectivity to millions. India’s progress in 5G roll-out and its uptake has been extraordinary to say the least, making it one of the fastest countries in the world to implement 5G.

The numbers just keep rising. According to the latest Ericsson Mobility Report, 5G subscriptions in the country are expected to increase to 840 million by 2029, constituting 65% of total subscriptions. Overall mobile subscriptions in the region are also estimated to grow to 1.3 billion in 2029. And when you consider the fact that India has the highest average monthly usage per smartphone at 29 GB, it's not surprising to see significant interest from telecom companies seeking to capitalize on India's growth story.

The Spectrum Story

India started commercial 5G services in October 2022 and within 2 years, driven largely by Reliance and Airtel’s deployment efforts, the country’s median download speed has risen to 96.38 Mbps much above the global average of 55.8 Mbps. These numbers are expected to rise further when BSNL and Vodafone eventually roll out their 5G services.

The first spectrum auction took place in August 2022, resulting in the sale of 51.2 GHz of spectrum. Reliance emerged as the highest bidder, acquiring 24,740 MHz of 5G airwaves worth Rs 88,078 crore (approx. $11 billion). Of particular interest to Reliance was the 700 MHz band, which though pricey is much sought after for its superior network coverage, good indoor penetration, and low power consumption capabilities. By acquiring the sub-GHz 700 MHz band, Reliance made a strategic move to pip the competition and acquire a comprehensive spectrum portfolio.

The second auction took place in June of this year where over 8 bands were put up for sale including 800 MHz, 900 MHz, 1800 MHz, 2100 MHz, 2300 MHz, 2500 MHz, 3300 MHz, and 26 GHz bands amounting to a total of 10,523 MHz of spectrum. A total quantum of 141.4 MHz spectrum was sold, generating a revenue of 113.4 billion (US$1.35 billion).

Major 5G Telecom Players?

Airtel

Airtel was the first to launch 5G network services in India, introducing ‘5G Plus’ in eight cities. Today, the ‘5G Plus’ network has expanded to all union territories and districts covering 5,000 towns and 20,000 villages across India.

At the recently concluded spectrum auction, Airtel emerged as the biggest winner, acquiring 97 MHz spectrum in the 900 MHz, 1800 MHz, and 2100 MHz bands for Rs 68.57 billion. This acquisition not only included expired spectrum holdings, but also Sub-GHz bands, thereby consolidating its fragmented spectrum blocks into one continuous spectrum.?

In July, Airtel, in collaboration with Nokia, completed the?5G non-standalone (NSA) Cloud RAN trial and achieved a throughput of over 1.2 Gbps demonstrating Airtel’s superior capabilities. The trial took place in an over-the-air environment utilizing 3.5 GHz spectrum for 5G and 2.1 GHz for 4G. Again, in September, Airtel completed 5G trials combining TDD (Time Division Duplex) and FDD (Frequency Division Duplex) mid-band spectrum to achieve an impressive uplink performance of 300 Mbps.

All of these efforts show Airtel’s desire to lead in the 5G space. However, Airtel is not giving up on 4G completely and is planning to award contracts for 300,000 base stations worth $1 billion to Ericsson, Nokia, and Samsung over the next three years to expand its 4G network in remote and rural areas. Additionally, Airtel has started refarming its existing mid-band spectrums to meet the growing data needs on its 5G network on 1.8 GHz, 2.1 GHz and 2.3 GHz bands across India.

The operator ended June with about 324,500 towers across India, an increase of more than 40,000 from a year earlier. The number of base stations rose 11.1% to 947,377.

Reliance Jio

Reliance Jio, India’s largest telco has been rapidly expanding its 5G network, achieving the fastest rollout of 5G Standalone (SA) architecture within 12 months of the first 5G auction. The telco has already deployed its 5G service in 7,764 cities/towns across 36 states and UTs in India achieving pan-India coverage.

Jio has been able to swiftly scale up its 5G network nationwide quickly thanks to combining advanced technologies like digital twin technology with AI and ML to enhance last-mile connectivity and drive digital transformation. As a result, its 5G network serves over 108 million unique 5G users.

In its annual report, the company stated that a combination of fixed broadband and 5G, along with greater customer engagement has resulted in a 30%? YoY increase in data traffic amounting to 149 exabytes during FY24. Through its indigenous FWA offering, JioAirFiber, Jio is targeting to connect over 20 million SMBs and meet their demands for high-speed internet.

Additionally, Jio has extended its partnership with Qualcomm to provide affordable 5G technologies to price-sensitive Indian consumers, thus improving digital connectivity in India.?

Vodafone Idea

Vodafone (Vi) with a subscriber base of 212.6 million and a competitive spectrum profile has ambitious 5G plans despite being cash-strapped. Vi participated in the spectrum auction and bought 900MHz spectrum for seven circles across the country to enhance the 4G experience for their customers, especially the indoor experience. They also have plans to use their advanced 4G infrastructure for a smoother transition to 5G.

Recently the company signed deals worth $3.6 billion (?30,000 crore) with Ericsson, Samsung, and Nokia for the supply of telecom equipment over three years. The investment is meant to expand 4G network coverage from 1.03 billion to 1.2 billion in 17 priority circles and launch 5G rollouts in select regions to meet increasing data demand from consumers.

They have also deployed key 5G technologies like Massive MIMO and Open Radio Access Network (ORAN) to enhance capacity and flexibility. As of 31st March 2024, approximately 13,300 small cells, 74,850 TDD radios, and 13,950 Massive MIMO sites have been deployed.

However, Vi needs to find a way to pay off its massive debt of over ?70,000 crore, which appears difficult at the moment, especially after the Supreme Court rejected its petition to recompute dues related to adjusted gross revenue (AGR).

Challenges and Opportunities

While India has witnessed rapid 5G deployment in record time, challenges exist. For instance, Indian customers are extremely price-conscious and often prioritize price over quality. Which is why when the 3 major telcos increased their tariffs in July, they saw a sharp decline in subscriber count. In contrast, the government-run BSNL gained 2.93 million customers despite not offering 5G services and providing limited 4G coverage.

Network operators are truly in a fix: they have to choose between increasing rates to improve ARPU or maintain low prices and harm their bottom line.

In addition, low fiber connectivity is hampering India’s 5G success story. While the pace of tower fiberization has improved with 5G, it still stands at a mere 38.44% far below the government’s vision of 70% fiberization by 2024.

FWA is proving to be a game-changer in areas previously unserved by #fibercables. It is not only bridging the digitaldivide but also reducing network congestion in dense urban areas. FWA is helping telcos monetize their investment, basically creating a win-win situation for everyone. As a result, FWA connections in India are set to rise from 308,000 in 2023 to 36.6 million by 2028.

Both Reliance and Airtel are aggressively expanding their FWA business. At its AGM, Mukesh Ambani, the chairman of Reliance, said that Jio is challenging itself to add a million homes to its FWA-based broadband every 30 days, after the successful capture of over a million plus AirFiber customers since its launch. Similarly, Airtel has now started offering FWA on 5G SA networks.?Nevertheless, FWA still has a long way to go, given that one in three households in India is unaware of the benefits of FWA.

Final Thoughts

With over 1.3 billion telecom subscribers India can serve as an excellent case study for other nations looking to follow a similar path. After all, few countries have embraced digitalization the way India has. Despite this, a significant digital divide exists where a major section of the population is deprived of participating in the digital economy and availing of key services. To bridge this divide, all stakeholders involved must make concerted efforts. That includes coming up with favorable policies, developing innovative products, and offering pocket-friendly plans.?