As 5G reached 1 billion connections by the end of 2022, GSMA Intelligence began discussing the second wave, the phase of growth which would see the technology reach 2 billion connections and then 5 billion by 2030.

The first wave was led by a small number of countries, but the second wave will be driven by an array of emerging economies with significant growth potential. Among the list of countries that will drive the second wave of 5G, India has a major role.

Accounting for one-in-eight global mobile connections and with 65 per cent of its population under 35 years old, India will drive a significant portion of this growth, with 5G adoption going from around 1 per cent at end-2022 to around 40 per cent by end-2030 (see chart, below, click to enlarge).

While this growth might seem difficult to believe, it shouldn’t be.

India has solid digital infrastructure in place and has exhibited rapid digital transformation in recent years, boasting a digitally-active population. Around 75 per cent of India’s mobile connections are already on 4G networks and the country’s commitment to adopting new technology is demonstrated by the recent unveiling of the Bharat 6G vision document, a starting point for policymakers and industry to design, develop and deploy 6G network technologies.

It is therefore imperative to understand what factors will lay the successful foundation for India’s 5G growth story.

Building on our existing market data, discussions with industry players and insights gained at the ET Telecom 5G congress in New Delhi last month, the story is fairly clear.

In October 2022, India became the 88th country to introduce 5G services. While it was four years after the worlds-first commercial 5G services went live, India is rapidly catching up in terms of network deployment and improving network speeds to catch-up with the 87 preceding countries.

Fast paced rollouts
Operators already claim to have surpassed their three-year 5G rollout targets in just six months.

In less than six months after the country’s first 5G launch in October 2022, Airtel has covered 500 cities with its 5G plus service and Reliance Jio more than 400 cities.

The rapid rollout is also evident from Airtel’s announcement it now expects to cover all urban areas in India with 5G by September 2023, ahead of the original target of March 2024.

Network investments reflected in high speeds
The latest data from Ookla shows average 5G speeds have improved over time and are encouraging across circles. The data indicates Reliance Jio achieved the highest median 5G speed in Kolkata at 506Mb/s, while Airtel achieved 268.89Mb/s in Delhi. To be fair, these numbers will be inflated by relatively low usage at this early stage. Regardless, the numbers are still encouraging.

Subscriber numbers
Reportedly, India now has 20 million 5G connections across Airtel and Reliance Jio and is well on the path to 40 million connections by the end of the year.

Given the first 5G services launched six months ago, the figures are impressive. These, however, still account for less than 2 per cent of total mobile connections and therefore still have a long way to go to reach full potential.

What can make/break India’s 5G growth?

There is no doubt India’s stellar 4G growth (with nearly 75 per cent of mobile connections on LTE), combined with solid network builds bodes well for 5G uptake. However, for that uptake to happen, the necessary foundations and enablers must be in place. Based on the ecosystem’s input, progress in the areas listed below can strengthen those foundations and enable not only growth but also 5G monetisation opportunities.

  • Right distribution of licensed and unlicensed spectrum. Operators in the country are united in their disappointment over treatment of IoT services on unlicensed versus licensed spectrum, arguing that added requirements on cellular IoT creates an uneven playing field and compromises their growth opportunities. The global norm, of course, allows for unlicensed spectrum to be used for Wi-Fi services but the dynamics in India are different. (1) In India, mobile networks carry more than 80 per cent of data traffic, with a monthly average consumption of 20GB per mobile user in 2022, higher than the global average of 15GB. (2) The average spectrum cost paid as a percentage of revenue is higher than the global average, making India’s latest C-Band auction in 2022 the second-most expensive. The speed and quality of these mobile networks are directly related to the availability of sufficient, harmonised and contiguous spectrum. It is only logical, then, for Indian operators to seek access to more spectrum in licenced vs unlicensed bands.
  • Pursuing the fair share argument. The fair share argument, led primarily by ETNO in Europe, is drawing attention from the Indian telecom industry too. Whereas one of the leading tech companies recently argued that operators claim higher EBITDA margins than tech companies, the operators argue that their net margins are lower than tech companies due to high fixed capital outlays on spectrum, networks and D&A of fixed assets incurred in the P&L after EBITDA calculations. Mr Vittal recently stated in his keynote address at the ET 5G Congress that the return on capital in the telecom industry is lower than the return on money kept in hassle-free bank deposits.
  • Availability (or lack thereof) of 5G-capable handsets in the affordable segments. One obvious concern raised was the scarcity of 5G-capable handsets at lower price points. India is a price-sensitive market, with an average ARPU of $2 compared with a global average of $8. It’s not surprising, then, that a large percentage of the mobile population prefers low-cost handsets. The success of 4G was defined by a combination of coverage and availability of affordable handsets. Delays in the launch or availability of affordable 5G-capable handsets will inhibit the progress on 5G uptake in India.
  • Standalone and mmWave. On the one hand, operators cite still maturing mmWave and standalone ecosystems as a reason for slow progress in these areas. Device manufacturers and vendors, on the other hand, cite lack of demand and use-cases from operators as the reason for limited device availability. This phenomenon is global and is not restricted to India but is more important for India due to the massive private network opportunity in India estimated at $250 million by 2027. The capabilities of mmWave spectrum and standalone networks have been highlighted on numerous occasions as one of the enablers of private networks in the 5G era unlocking new monetisation opportunities. Whatever the cause of the delay, the industry must step forward and collaborate more effectively to keep progress on these fronts moving.

All said and done, the Indian telecom market has shown some promising early signs of 5G rollout and adoption, with the potential to become one of the leading markets in future if the challenges discussed above are addressed in a timely manner and right foundations are laid.

– Radhika Gupta – head of data acquisition, GSMA Intelligence

The editorial views expressed in this article are solely those of the author and will not necessarily reflect the views of the GSMA, its Members or Associate Members.