India’s digitalisation journey has sped up in the past decade. E-commerce spending has gone up almost three times between 2017 and 2021. This has been enabled by the rapid adoption of smartphones. As of June 2022, smartphones constituted around 83 per cent of e-commerce sales in India. Fintech-powered digital transactions have also increased substantially. Payments powered by Unified Payments Interface, for instance, witnessed a whopping 92 times increase between 2017 and 2021. The increase in e-commerce spending and digital transactions can be credited to the rapid adoption of services during the past five years. Data consumption for an average Indian user has risen from 5.7 GB per month to 17 GB per month, marking a compound annual growth rate (CAGR) of 31 per cent. This makes Indian mobile users the largest consumers of mobile data globally on a per capita basis. Nokia’s MBiT report predicts that, going forward, consumption by an average Indian user will reach 49 GB per month by 2026.
Trends in 5G
With India now entering the 5G era, the digitalisation journey is expected to accelerate further. As per a recent survey conducted in September 2022, nearly 10 per cent of smartphones in India are already 5G-enabled. Further, Nokia’s MBiT report projects that mobile 5G services will generate $9 billion in revenue by 2026, equivalent to 37.7 per cent of the total mobile service revenue.
Digitalisation of enterprises
5G will play a vital role on not only the consumer side but also the enterprise side. 5G will immensely benefit enterprises in efficiency gains, measured in safety, productivity and efficiency (SPE) metrics for each sector. Enterprises have witnessed the adoption of digitalisation in the form of technologies such as artificial intelligence (AI) and machine learning (ML). Digitalisation has enabled various industries to enhance their SPE.
In terms of level of digitalisation, industries fall into three categories:
- Digitally mature: These are industries that adopted digital technologies very early and have maintained ample spending. Industries such as communications, media, and banking, financial services and insurance fall under this category. These industries have seen a four times growth in digital adoption since 2015.
- Physically leading: Manufacturing, healthcare, transportation, education and other such industries can be called physically leading enterprises. These industries have spent moderately on information and communications technology (ICT) but have scope for more investments. The scope for better results keeps them inclined towards digitalisation. They are expected to grow around four times in terms of digitalisation and witness efficiency gains of over 12 times.
- Physically lagging: These are industries that have not seen much investment in the ICT space, although they have seen significant results in some sectors. The barrier to easy digitalisation for these industries is usually geographical. Industries such as agriculture, construction, live arts and hospitality are some that are lagging behind in digitalisation. They are expected to see an increase of over five times in digitalisation by 2030.
Within the next 10 years, ICT investments will come largely from physical industries, constituting almost 65 per cent of the total share. The efficiency gains for these industries will depend upon 5G coverage, the degree of technology adoption and the type of industry vertical.
As 5G penetrates the Indian subcontinent, it is expected that the digital economy will soon reach its $1 trillion target. This will mean three times faster roll-outs, besides 500 million 5G subscribers by 2030. It is also expected that there will be a 10 times increase in machine-to-machine connections per square kilometre by 2030, and private wireless and edge computing will play a vital role. Interestingly, 5G will contribute to 50 per cent of this $1 trillion economy.
5G use cases for consumers
5G promises many interesting use cases for consumers. Fixed wireless access (FWA), for instance, is supported in over one-third of 5G launches in India. Cloud gaming is also said to be the first acknowledged 5G use case and is generating among the highest operator activity. The most common route for cloud gaming is operator partnerships with gaming providers, while also bundling their services with FWA and/or smartphone plans. Apart from these, with 5G becoming accessible, consumers can enjoy immersive events, more efficient airports, and smart cities. All this will lead to many developments in the economy, including skill development and awareness, ease of doing business and collaborations for India-specific use cases.
Based on a presentation by Amit Marwah, Head of Marketing and Corporate Affairs, Nokia India