The fifth generation wireless networks, known affectionately as 5G has created enough hype over the past couple of years with users and service providers waxing eloquent about how the technology would disrupt the manner in which we use our mobile phones and other smart devices at home and the workplace. However, the telecom sector’s meltdown has cast doubts on this anticipated shift.
The anticipation wasn’t just about downloading a movie within the blink of an eyelid. It involved much more from an economic point of view as investments would come in the form of enhancing the infrastructure for the fifth generation network that could provide data speeds that are ten times faster than what is currently available.
In fact, Telecom Secretary Aruna Sundararajan had brought up the impact of 5G networks during the Global Tech Summit that was held in Bangalore earlier this month. She told delegates that the true potential of upgraded networks would be felt in the rural economy too by enhancing agriculture, logistics, energy and environment, education and healthcare.
However, then came the dampener as she revealed that India was nowhere close to rolling out 5G network at the moment. She recalled the manner in which the country moved to 3G in 2013 but the same could achieve better utilization only three to four years later. Sundararajan believes the case would be similar for the 5G networks.
The 5G Challenge in India
So, what’s pushing 5G Back? For starters would companies that are tottering on the verge of bankruptcy invest in fresh infrastructure? A report published on ET Telecom quoted COAI director Rajan Mathews to suggest that telecom operations may not participate in the 5G spectrum auctions that are scheduled for the middle of 2020. They simply don’t have the money.
The telecom companies are finding 5G spectrum to be way too expensive as they could cough up as much as five times of what their global peers would be paying for. A report in Gizbot.com says that TRAI has recommended base price of 5G airwaves at Rs.492 crore for 1MHz and each operator is required to buy at least 20 MHz worth of waves, which means a whopping Rs.10,000 crore or more.
The ongoing telecom crisis means that telecom players may just not find it financially viable at this point in time to make such investments. The COAI had sought help from TRAI on this front and sought a reduction in prices, but the government’s nodal body has reportedly declined to intercede.
While the government appears committed to launching the latest telephony in India at the earliest, they seem to be ignoring the factors that could make this into a distant dream. The Gisbot.com report suggests that government believes that increased tariff and a two-year moratorium on spectrum payments that it is proposing could overcome the crisis that operators are facing.
Appears highly optimistic considering that government-owned telecom players themselves are in a bind and it is now hoped that by merging BSNL and MTNL they could come out of the crisis and be a part of this telecom revolution. By the look of things on the ground, the only company that could end up participating in the 5G auctions could be Reliance, which is now occupying the position of God’s favourite child in the current dispensation.
Expensive 5G Smartphones
There is also the small question of smartphones costing more than a lakh or rupees when they become 5G enabled. Globally the cost of such phones are expected to be in the range of $1200 which is quite a lot of money considering that the sweet spot for most smartphone buyers continues to be in the range of $500 to $800, depending upon the screen size and the processor speed.
A recent survey quoted by TechCrunch.com suggests something quite intriguing. The NPD mobile phone tracking study suggests that less than 10 per cent of US consumers are spending more than $1000 on mobile devices. This was proved by the lacklustre numbers that the highly priced iPhone XS gathered and how Apple brought down the prices to sell more iPhone 11 phones a year later.
This could make phone manufacturers wonder whether 5G could really be the next major driver of mobile phones, given that overall sales have been flagging for a while now. With most smartphones scoring the same points on its features and functionalities, the biggest of players in the market have actually gone downscale by offering lower-cost alternatives in recent times.
However, Brian Heater, who wrote the article on TechCrunch.com believes that things aren’t all that hopeless as one of the reasons why sales slowed over the past year or so could be in anticipation of the 5G network’s arrival with premium users likely waiting for better coverage before investing in their next smartphone, at which point $1200 may not seem all that heavy on the purse.
So, it must be said that while government is pushing for 5G and telecom companies would eventually end up purchasing the spectrum, there is still no clear sign whether users would be ready to cough up large sums of money to acquire the 5G enabled phones or would they merely continue with their present ones and invest in other gadgets such as a Smart TV to utilize the true speed of 5G.
