The roll-out of the next-generation wireless technology, 5G, is expected to usher in the next wave of growth in the telecom industry and create a plethora of new economic opportunities. The technology will have a wide-ranging impact on sectors such as education, health, agriculture, manufacturing, public safety and disaster management. It will also support the proliferation of advanced technologies such as internet of things (IoT), artificial intelligence (AI) and virtual reality.
Globally, there has been significant activity in the 5G space. More than 150 5G trials are under way and the vendor ecosystem for 5G is also maturing. Since India missed the opportunity to launch 3G and 4G services in line with the global launch, the government has expressed its intention to bring in 5G services in the country to match the expected global timeline of 2020.
Government readies policy roadmap for 5G
The high-level panel set up by the government in September 2017 has recently submitted its much-awaited report on the vision for 5G in India and the policy initiatives required to support 5G roll-out in the country. The committee has made several recommendations on matters such as spectrum policy, regulatory policy, education and awareness promotion, application and use case labs, participation in international standards, development of application layer standards, and major 5G trials. The committee has suggested that the government provide financial support to telecom operators for backhaul development, site acquisition, civil works and 5G trials. Additional financial support may be offered to internet service providers, technology companies, local governments and economic verticals to participate in the trials. According to the report, 5G networks will need new business models and will also expose service providers to higher risks. Therefore, the government should offer a comprehensive support package. It has suggested that most guidelines on regulatory matters be promulgated by March 2019 to facilitate early 5G deployment. Further, as per the committee, global original equipment manufacturers should be invited to conduct major 5G trials in India in collaboration with local partners.
The draft National Digital Communications Policy (NDCP), 2018 has also proposed several measures to accelerate the launch of 5G services. The policy proposes to increase the backhaul capacity for supporting 5G by implementing a “fibre-to-the-tower” programme, which will enable fiberisation of at least 60 per cent of this base stations. Moreover, the policy has advocated a review of industry practices with respect to traffic prioritisation to provide 5G-enabled applications and services. It has also suggested creating a fund for research and development in 5G for start-ups and entrepreneurs to develop the technology use cases.
The government has also launched the “Building an End-to-End 5G Test Bed” programme to advance innovation and research in 5G. The three-year programme began in March 2018, with a budgetary support of Rs 2,240 million. Under the programme, several universities such as the Indian Institute of Technology (IIT) Madras, IIT Hyderabad, IIT Delhi, IIT Kanpur, and the Indian Institute of Science, Baengaluru, have collaborated with technology companies to build proof-of-concept 5G prototypes, which are broadly compliant with the global standards. As part of the programme, Ericsson installed the first public access 5G test bed at IIT Delhi in July 2018 for developing broadband and low latency applications.
In a recent development, DoT has partnered with US-based Cisco Systems to showcase India-specific 5G use cases. As part of the partnership, Bharat Sanchar Nigam Limited (BSNL) will set up a dedicated location to demonstrate 5G use cases in the areas of education, healthcare and agriculture using technologies such as IoT, surveillance and AI. Earlier, DoT had asked several other multinational telecom technology vendors such as Samsung, Nokia and Ericsson, and operators such as Bharti Airtel and Reliance Jio Infocomm Limited (RJIL) to conduct 5G trials in the country and develop India-specific 5G use cases.
5G spectrum strategy
The high-powered panel on 5G has identified and recommended specific bands for 5G spectrum allocation. The panel has recommended phase-wise allocation of 5G spectrum including 405 MHz (readily available) and additional 137 MHz of sub-4 GHz radiowaves, and 5.25 GHz along with 8.3 GHz of the sub-45 GHz category. The panel has also suggested to the government to release its spectrum policy and the necessary notifications by December 31, 2018. According to the expert group, it is important to ensure that spectrum is auctioned at a reasonable price. To arrive at a suitable price for the Indian market, it is important to study global trends. Further, free bandwidth should be assigned for trials for a fixed time frame to allow setting up of the network.
The draft NDCP, 2018 also talks about the need to make new spectrum bands available for access and backhaul segments to ensure the timely deployment and growth of 5G networks. Further, the draft policy focuses on making harmonised and contiguous spectrum available for the deployment of 5G and other next-generation access technologies.
In August 2018, the Telecom Regulatory Authority of India (TRAI) recommended the auction of spectrum in the 3300-3600 MHz band for offering 5G services for the first time in the country at a pan-Indian reserve price of about Rs 4.92 billion per MHz. As per the regulator, the 5G airwaves should be put up for auction in the block size of 20 MHz. Further, to avoid the monopolisation of this band, TRAI has suggested fixing a limit of 100 MHz per bidder. The regulator has suggested that there should not be any roll-out obligations for this band, and spectrum trading should be allowed after a lock-in period of five years as opposed to two years to avoid misuse. TRAI, however, has not suggested a timeline for the 5G spectrum sale.
Industry takes early steps but adopts a cautious stance
Indian telecom operators and equipment vendors have started taking initial steps towards 5G. In February 2018, Bharti Airtel and China-based telecom vendor Huawei successfully conducted India’s first 5G network trial under a test set-up. Earlier, in October 2017, Bharti Airtel partnered with equipment vendor Ericsson to develop a strategic 5G roadmap. As per the agreement, Ericsson will help Airtel transform its network to the 5G technology standard. BSNL has also signed an MoU with China-based equipment vendor ZTE to collaborate on developing pre-5G and 5G wireless systems. The MoU seeks to establish virtual network architecture for research and commercialisation of 5G in India. ZTE has initiated 5G-related activities such as pre-5G trials with other operators as well including Vodafone India and RJIL. It has also partnered with Bharti Airtel to provide 5G-ready massive input massive output technology.
The telecom industry, however, is less upbeat about the 5G opportunity as compared to the government and has adopted a cautious approach. The ongoing financial turmoil in the sector is making it difficult for the industry to undertake the infrastructure investment required to upgrade to 5G services by 2020. As per the high-level 5G forum, an investment of $100 billion is required over the next five to seven years to create a nationwide 5G infrastructure. Further, industry reports indicate that the operators will take at least five to six years to derive gains from their investment in 5G spectrum and technology. Industry analysts also expect telecom operators to refrain from bidding for 5G spectrum in the absence of commercial 5G use cases.
Stumbling blocks and the road ahead
The high-powered committee notes that the launch of next-generation 5G wireless services is expected to create a $1 trillion economic opportunity. Further, it is important to decide the timeline for an roll-out of these services in India. As per the panel, if the industry goes in for an early adoption, then it will have to incur a high equipment cost as the technology is still evolving. On the other hand, an early roll-out will help the country reap the dividends of 5G quickly and also potentially become an innovator in 5G.
According to Sanjay Kaul, managing director, global services provider business group, Cisco, India and South Asia, while the road ahead for 5G in India is bright, it is also fraught with regulatory and other challenges. “The slow adoption of a faster fibre-based network over microwave backhaul has been a teething issue. Currently, only 20 per cent of the total telecom towers in India are fiberised. Addressing the lack of supportive infrastructure followed by large-scale deployment of the same will be the key to achieving 5G success,” says Kaul. Moreover, some stakeholders are of the view that the industry is currently undergoing a phase of mergers and acquisitions and it is important to allow the market to settle down before embracing the new technology.
Another concern stems from the fact that the launch of 4G services did not bring any tangible benefits to enterprises and there are not enough India-specific 5G use cases at present. According to T.V. Ramachandran, president, Broadband India Forum, the success of 5G will depend on telecom operators opening up to, and connecting with, a multitude of industry verticals to understand their businesses and help them develop new use cases and business models.
Going forward, the fast fiberisation of existing infrastructure, reasonably priced spectrum and development of relevant use cases will be critical to the deployment of 5G networks.