According to a report by CLSA Limited, Indian telecom players will follow China’s 5G and industrial internet line. The worldwide march to 5G accelerated with China launching standalone (SA) 5G in 2020. The 5G migration lifted the average revenue per user (ARPU) by 10 per cent, driven by higher data usage. SA 5G is also the foundation of China’s industrial internet, led by cloud, internet of things (IoT) and others, which could grow 20-30 per cent year-on-year to contribute 13-27 per cent of the revenues of telecom players in 2022.
The report stated that Reliance Jio and Bharti Airtel will consolidate their market further and deliver compound annual growth rate of 22-23 per cent in earnings before interest, taxes, and amortisation (EBITA) in the fiscal year 2025. Jio targets SA 5G while Airtel’s 5G NSA will reuse its dense 4G network. Further, 5G handsets already comprise 30 per cent of smartphone shipments and should reach 250 million by the fiscal year 2025.
According to the report, early 5G monetisation in India will be driven by top-end subscribers, a jump in network capacity and 5G-based enterprise and fixed wireless access (FWA) services. 5G FWA alone could bring in $5 billion-$9 billion in annual revenue. Further, 5G will coincide with growing ARPU and market share gains for Jio and Airtel.
The report notes that significant smartphone and ARPU expansion should make the Indian mobile market into a $36 billion market by the fiscal year 2025.
