Answer this. You are catching a long-distance flight and just before take-off, you decide to download and watch RRR, the southern blockbuster, which is a three-hour extravaganza, on your iPad. Even if you subscribe to the best broadband service in India, currently it would take close to half an hour to do so. So, you would dump the idea, right? But imagine if you had a network that could allow you to download the full movie in less than a minute. Next, let’s take your favourite sport—cricket, we guess. You think watching it on your high-definition TV on a big-size screen with surround sound is the closest you can get to viewing it live. Well, think again. You can sport a virtual reality (VR) headset and catch the action in real time from any vantage point as though you are in the stadium where the match is being played.
All this may seem too good to be true, given that call drops and connectivity issues are rampant even in our cities, not to talk of far-flung areas. However, the implementation of the fifth-generation telecom network technology or 5G is set to change all that—with at least 10 times faster data transmission than what the current 4G offers. The recently-concluded auctions of 5G spectrum or radio waves to Indian telecom operators could kick off the process of delivering the immense promise that the technology offers. In the fray were the three private service providers—Reliance Jio, Bharti Airtel and Vodafone Idea. The state-owned Bharat Sanchar Nigam Ltd (BSNL), which is still struggling with its 4G rollout, also wants airwaves for 5G so as to not miss out on the opportunity there.
India boasted a total mobile subscriber base of 1,143 million at the end of April 2022, according to data from the Telecom Regulatory Authority of India (TRAI)—many of whom could benefit immensely from the introduction of 5G services. Reliance Jio is the leader with 405 million subscribers, followed by Airtel (361 million) and Vodafone Idea (259 million). At the end of seven days of auctions on August 1, the Centre received bids worth over Rs 1.5 lakh crore from telecom operators. Reliance Jio topped the list with a bid of Rs 88,078 crore, followed by Airtel with Rs 43,084 crore, and Vodafone Idea with Rs 18,799 crore. Up for auction was about 72 gigahertz (GHz) of radio waves that can offer 5G services, worth around Rs 4.3 lakh crore. (Hertz is a frequency unit that indicates the speed at which information is processed over a second, and one GHz is equal to a billion hertz.) The government achieved 71 per cent of the targeted spectrum sales.
Significantly, the government has also allowed technology firms and corporates to set up captive 5G networks to enhance commercial offerings to their clients. The Adani Group is the first to go for it and has put in bids worth Rs 212 crore, indicating that it plans to start its telecom foray in a limited manner. Considering that it will take a few months for the 5G rollout, the services are expected to be implemented in phases. Urban areas with higher telecom tower density and a higher number of 5G handsets are likely to be the first to witness the implementation. “Our target is to start the rollout process sometime in early October and within one to one-and-a-half years, we should see a good presence of 5G in the country,” Ashwini Vaishnaw, the Union minister of communications, electronics, IT and railways, told india today.
FULL INTERVIEW | ‘We aim to roll out 5G by October’: Union minister of communications Ashwini Vaishnav
The 5G revolution
Once this comes to pass, it will not just be in-home entertainment, 5G will bring about a revolution in our lives. Vaishnaw sees two major sectors being immediately impacted: health and education. In health, it could enable point-of-care diagnostics where patients from home can have video consultations with medical professionals and will not have to visit clinics unless necessary. It will also facilitate connected ambulance services (real-time data transfer to the hospital). In education, the minister says, given the vast services that 5G will offer, services will be redesigned around it rather than the other way around. He also points out that drone technology would get a major boost, especially in sectors like agriculture where it could be used for precision spraying of fertilisers and pesticides in addition to drip irrigation.
Amitabh Kant, the former CEO of NITI Aayog, in a recent article, listed other key areas where 5G would effect a transformational change for the common man. In the banking sector, he believes, the use of geospatial information systems (which create, manage, analyse and map all types of data) will allow us to reach the next level of simple, seamless and secure payments such as ‘one-tap payment’ (which eliminates layers of steps, making transactions hassle-free) and ‘cashier-less store’. And that isn’t all. In transportation and mobility, 5G can improve infrastructure for electric vehicles by identifying and communicating with charging stations and integrate initiatives across transit systems such as FASTag for toll and entry tax, potentially reducing traffic congestion. In manufacturing and industry, 5G would elevate automation efficiency to another level, reducing the carbon footprint. In governance and public safety, service delivery and citizen engagement could be improved with faster and safer digital verification.
To understand how 5G works, let’s go back a bit in time. Even though baby steps toward mobile telephony were taken in the mid-20th century, it was not until the 1980s that the first commercial mobile telephony operators started gaining momentum. The year 1979 saw the introduction of 1G or the first generation of telecom services, enabling voice calls over mobile phones, which was followed by 2G in 1991 that offered improved sound quality, encrypted communications and SMS messaging. The launch of 3G in 2001 ushered in facilities such as global roaming, email and video streaming, offered for the first time on mobile phones, while 4G took them further into high-definition (HD) streaming, social media and interactive apps. While 4G uses radio towers to deliver phone services as well as wireless internet to mobile devices, 5G goes a step ahead and incorporates new technology and higher radio frequencies (see below graphic, How Networks Operate).
Benefits to consumers
Shorn of the technical jargon, with 5G, downloads and streaming will happen without any delay. “The speed of data transmission will be at least 10 times faster than what we are experiencing in the 3G and 4G space,” says K.G. Purushothaman, a partner with KPMG India. With the transition from 2G to 3G, the industry was already beginning to transform with better data speeds. “The transition from 3G to 4G was not very difficult. The data speed improved, the use cases (applications) of those improved speeds grew, and remote ways of working became the norm. With 5G, all this is going to increase exponentially,” he adds.
According to Prashant Singhal, TMT (technology, media and telecom) emerging markets leader at EY, the big benefit for the end-customer will be that, effectively, there will be no latency or delay in the transfer of data. “This will mean immediate connectivity and you can interact in an immersive way as if you are talking to each other,” he says. While 4G made it possible for HD videos to be played on mobile screens, 5G will support the era of 4K and 8K televisions that have ultra-high-definition viewing and many applications in the VR domain that require higher speeds, such as gaming.
“Effectively, there will be no latency or delay before transfer of data. This will mean immediate connectivity and you can interact in an immersive way as if you are talking to each other”
– PRASHANT SINGHAL, Technology, Media and Telecom Emerging Markets Leader, EY
How does 5G achieve all this? One of the major characteristics of 5G is its high bandwidth—the volume of information that can be sent over a connection in a specific amount of time. While 4G can manage only 200 megabytes of data per second (MBPS), 5G can handle up to 1 gigabyte or more. One megabyte (a data measurement unit) equals one million bytes whereas one gigabyte is one billion bytes. The other factor is low latency—the delay between sending and receiving information. 4G suffers from a 100 milliseconds (ms) latency, while 5G reaction time can be as low as 1 ms, which makes everything happen virtually instantly.
The other advantage is the dense connections that 5G offers. In a given square kilometre, 5G will be able to connect 10 times as many devices as 4G. For this, 5G uses a new radio technology in a different bandwidth and hooks onto portable miniature base stations that run on minimal power to operate and can be densely placed to prevent signals from dropping. Over time, 5G can help connect self-driven cars, so that they become aware of every other car, bike and pedestrian around them; smart cities based on 5G could make anything electric also connected and aware; it might also, in future, help devices at home connect directly to a wireless internet service provider rather than use a WiFi router.
On the enterprise front, one big emerging opportunity for 5G has to do with technology companies looking to expand their ecosystems. These companies spend a fair amount of money on providing end-use applications to customers, but they have only limited connectivity. There are two types of technology companies. First, ‘hyper-scalers’ like Facebook and Google, whose end-customers trawl large platforms. Here, telecom firms provide connectivity as well as SMS service to the end-customer, so that these tech companies can engage with their customers using services like OTPs (one-time passwords). These tech companies are now eyeing a part of the spectrum, using which they will be able to engage directly with their customers and also reduce their telecom costs over some time.
The second type of technology companies are those that want to provide a very concentrated ecosystem for large enterprises. Large corporates that run factories or underground mines require sophisticated infrastructure. Critical to this is what are called ‘mesh technologies’ or networks that dynamically self-organise and self-configure, reducing installation overheads. These companies pay a huge cost to maintain high-speed infrastructure to transmit the information needed to engage with their customers. Some of them are trying to create a “one-customer ecosystem” with their super app, as the Tata Group is doing with its Tata Neu app. Companies that want to go through a digital transformation have to embed some of these technologies in their existing networks, but connectivity is a huge issue. When private networks come in, these corporates want to have dedicated networks for their use. For instance, Google is running public networks for many enterprises, and so are Microsoft and Amazon. Along with the cloud technologies they offer, these tech companies also provide the connectivity needed by the user companies. With 5G coming in, these tech firms will apply for licences so that they can provide access to cloud solutions at a more affordable cost to small and medium enterprises too. This is already happening in countries such as Germany, the US and Sweden. In fact, 5G is now available across upwards of 70 countries. China, for instance, has reported 233 million 5G customers in the first quarter of 2022.
Meanwhile, global players such as Singtel of Singapore and Verizon of the US have started focusing on tele-connectivity for such B2B platforms. One such platform is healthcare where high-speed precision is required, if remote medical services are to be truly enabled. In the US, even remote surgery is being experimented with now. Work on how precision manufacturing can be done using 5G is under way in these countries. The transportation system and logistics now rely a lot on IoT (internet of things) sensors. 5G enables this because it can handle several times more devices in a given square metre area. In India, many hospital providers want to go virtual, which requires better connectivity. “Enterprises will now have the opportunity to move to the public and private cloud. That shift from on-premises to the cloud will be accelerated,” says an official with a Mumbai-based telecom firm.
The tariffs question
A key question concerning the general public is how expensive 5G would be. Experts say there are two kinds of costs to consider. One is the cost of the actual connection, and the other is what the customer pays for the content. “What normally gets reported is only the telecommunications costs,” says Purushothaman. “India has one of the lowest telecom costs in the world. When the rollout happens, India being a price-sensitive market, service providers will bundle 5G with exclusive content.” Despite the high consumption of data, revenues from mobile telephony in India are among the lowest in the world. Data usage rose at a compounded annual growth rate of 53 per cent between 2017 and 2021, according to a report released by Nokia last year. India’s monthly data consumption touched 17 GB per user in 2021, a year-on-year increase of 26.6 per cent. But average revenue per user (ARPU) per month has been languishing. In March 2022, Airtel reported the highest ARPU of Rs 178, Reliance Jio of Rs 167.6 and Vodafone Idea of Rs 124. In contrast, China had an ARPU of RMB47.5 (Rs 561.51) for the first quarter of 2022. “Data and voice consumption six years ago was in absolute terms averaged at Rs 200 per month. Now, we do 50 times more data compared to then and three times the voice, but the ARPU is Rs 150. After adjusted inflation, it should have been Rs 300-plus,” says a senior official with a service provider.
“The transition from 3g to 4g was not very difficult. The data speed improved… And remote ways of working became the norm. With 5g, all this is going to increase exponentially”
– K.G. PURUSHOTHAMAN, Partner, KPMG India
One of the primary reasons for this is the cut-throat competition in the sector, especially with the entry of Reliance Jio, which led to rock-bottom tariffs. Even after a 20 per cent increase in tariffs in November 2021, the cheapest tariff plan for Jio stood at just Rs 75 a month, while for Airtel and Vodafone Idea, it was Rs 99 each. Service providers tread cautiously on the issue of tariffs since any incremental increase leads to a massive drop in the number of subscribers. With the advent of 5G and a subsequent effect on speed and latency, data consumption is expected to rise. This could mean more revenues for the service providers. It will be critical for players such as Vodafone Idea, which has been struggling under a huge debt burden, prompting the Centre to come up with a relief package last year that included payment of pending spectrum dues in a staggered manner over 20 years.
The biggest entry barrier for the end-customer would be 5G handsets, which at Rs 15,000 and above are out of reach for many. Most Android devices and iPhones are already introducing 5G-enabled phones in the market. Moreover, only 5-7 per cent of the 800 million smartphones used in the country are 5G-enabled. But minister Vaishnaw claims this will change rapidly. “Close to 20 per cent of the handsets being manufactured in India are 5G-enabled,” he says. “As for cost, entry-level 5G handsets have already come in at Rs 15,000. Very soon, it will come down to Rs 10,000, which is a critical point in terms of the cost of handsets. So we expect a big scaling up soon.”
Telecom observers expect two kinds of customers. One is those who will continue to use 2G, especially in the villages. This ecosystem will endure for the next five years, they say. The second set will be customers hungry for data content, those who have already scaled up from social messaging on apps like WhatsApp to more data-heavy use, such as video calling. This set of users will seamlessly move into 5G.
Telecom companies are busy stitching up alliances and sprucing up technology in preparation for the 5G launch. Bharti Airtel has tied up with Tech Mahindra to create and market enterprise-grade digital solutions spanning 5G, private networks and the cloud. It is also roping in equipment providers to negotiate 5G-specific contracts. Reliance Jio is in advanced talks with South Korea’s Samsung as a third-party service provider. It is also collaborating with Google Cloud on 5G. Meanwhile, Vodafone Idea is partnering with US-based Ciena to construct a future-ready network for 5G. It has also tied up with L&T Smart World & Communication for 5G network infrastructure, based on technology expertise from Nokia. Chinese equipment vendors Huawei and ZTE, whose future in India had come under a cloud since border tensions with China in 2020, are reportedly out of the race for the supply of 5G equipment, with telcos preferring to go with other players. Meanwhile, the government-owned Centre for Development of Telematics (C-DoT), in collaboration with private Indian enterprises, is perfecting an indigenous 5G stack (apart from a 4G one), including the core network that BSNL will test before it is offered for commercial sales.
All this requires huge capital investment. Before the auctions, telecom operators had asked for a 90 per cent cut in the reserve price of airwaves from the 2018 levels, arguing that they needed to keep aside a big chunk of funds for setting up infrastructure. But the Centre didn’t accede to this demand and reduced the prices for various spectra by an average of 30 to 40 per cent. “The spectrum reserve price is 3.6 times compared to that of Germany, 3.8 times that of the UK and 4.4 times when compared to South Korea. However, India’s telecom service revenue is 0.6 times of Germany, 0.7 times of the UK and 0.9 times of South Korea,” says Singhal. “That is what creates the imbalance.” Paying higher prices for airwaves can impact investments in infrastructure. It will also make it imperative for companies to recoup their expenditure on the 5G rollout at the earliest. The hope for telecom players is that most of the more than 800 million subscribers of the 4G telecom network are expected to make the shift to 5G over a year or so, which will help them earn more revenues out of the data these subscribers use.
There are other challenges that include adding more telecom towers to meet the traffic and also extensive fiberisation of the network so that towers do not get choked. Most sites need fibre-optic connectivity, and the more the amount of fibre, the better. This becomes all the more necessary as 5G matures and India moves into the second and third years of the rollout. As of February, 560,000 kilometres of fibre-optic cable had been laid under the BharatNet policy, according to government data. However, fiberisation has covered only around 30 per cent of the Indian network at present—that needs to increase to 80 per cent for a meaningful launch of 5G, say experts. “The industry and the government are seized of the issue. The Centre’s Gati Shakti Sanchar project is an intention to bring down the approvals for laying out fibre and erecting telecom towers,” says the industry official.
5G is finally on India’s doorstep. It promises a significant change in the way we experience mobile telephony services, both as consumers and from the point of view of enterprises. What now remains is its steadfast implementation, plugging the loopholes in infrastructure and the availability of affordable devices so that the proliferation across the country can take place at a quick pace.
While 4G uses radio towers to deliver both phone services and wireless internet to mobile devices, 5G incorporates new technology and higher radio frequencies. Both use more base stations to deliver faster speeds in a quicker response time
– A mobile network is divided into cells where each phone is connected to exactly one cell at any given time (hence the name ‘cell phone’)
– Each cell is operated by a cell tower on which a wireless transceiver base station is mounted. The base station maintains a wireless connection to all active phones in its cell
– When a person speaks into her cell phone, radio waves from it travel through the air to a nearby cell tower, from where they are further transmitted
– When the user and the phone move to another cell, the base stations perform an exchange called a ‘handover’
– Though 5G networks mostly rely on 4G and 4G LTE (long-term evolution network, used to transmit wireless data at a faster rate compared to 3G) towers now, telcos are working to develop standalone 5G networks
These networks are based on a few core concepts such as:
5G uses higher frequencies that are new to mobile phone networks, but are commonly used in other applications such as point-to-point radio links and body scanners for security checks. At these higher frequencies, 5G networks will use a greater number of base stations and of connected objects, which has triggered safety concerns. In January, several airlines cancelled their flights to the US as AT&T and Verizon announced their 5G rollout, fearing that the 5G waves could interfere with instruments such as the altimeters that tell pilots how far they are from the ground.
One worry is that, since 5G is new, there has not been enough time to properly test whether it’s safe. According to the World Health Organization (WHO), after conducting much research, no adverse health effect has been linked with exposure to wireless technologies. Health-related conclusions are drawn from studies performed across the entire radio spectrum but, so far, only a few studies have been carried out at the frequencies to be used by 5G, it said. “Tissue heating is the main mechanism of interaction between radio frequency fields and the human body. Radio frequency exposure levels from current technologies result in negligible temperature rise in the human body,” says a WHO report.
In June, a single bench of the Delhi High Court dismissed a suit filed by actor Juhi Chawla highlighting what she felt were the adverse effects of 5G. The court imposed a penalty of Rs 20 lakh on her “for wastage of judicial time” but later, a division bench lowered the penalty to Rs 2 lakh and expunged the adverse observations against her.