5G in India Finally Arrives after US$19 Billion Spectrum Auction Completed

On August 1, 2022, India completed spectrum auctions for 5G with a result of Rs 1.5 lakh crore (US$19 billion). In total, about 51.2 Gigahertz (GHz) of the spectrum was sold from 700 Megahertz (MHz) to 26 GHz, with the most interest in the mid-band. Owners of those spectrums are Jio (700 MHz, 800 MHz, 1800 MHz, 3300 MHz, and 26 GHz), Bharti Airtel (900 MHz, 1800 MHz, 2100 MHz, 3300 MHz, and 26 GHz), Vodafone Idea (1800 MHz, 2100 MHz, 2500 MHz, 3300 MHz, and 26 GHz), and the new entrant, Adani Group, which only acquired the Millimeter Wave (mmWave) band of 26 GHz.

After the completion of the spectrum auction, Jio and Airtel are competing to be the first launcher in August. Airtel has signed deals with Nokia, Ericsson, and Samsung for its initial 5G launch. Adani Group, as a non-telecoms company, participated in the spectrum auction thanks to a new decision from the regulator—the enterprise was allowed to acquire spectrum directly from the regulator to build a private network for Industry 4.0 applications. Adani Group stated earlier that it has no intention to enter the mobile consumer market, but will focus on building a private network for its own businesses, e.g., airport, ports, logistics, power generation, and data center.

Spectrum auctions in India have been postponed several times since early 2020. The main reason is the conflict of interests for the spectrum reservation. For example, the Broadband India Forum (BIF), representing members of technology giants like Amazon, Cisco, Facebook, Google, and Intel, was working on spectrum allocation for private captive 5G networks, i.e., a network set up by a private entity for use by just one organization, which Mobile Network Operators (MNOs) argued against. Additionally, MNOs expressed concerns about revenue from the 5G consumer market, so they were bargaining with the regulator for more affordable base prices. Some blame was placed on 5Gi, an indigenous 5G standard promoted by the regulator to address the 5G coverage cost issues and to enhance India’s technology leadership. Introducing a new standard would bring extra costs to MNOs due to the need for devices and equipment to be compatible with 5Gi. As a result, the settlement of the 5G auction marked a true milestone.

A long wait makes the market well prepared for the commercial launch. The market has a sufficient portfolio of 5G smartphones at a wide price range, and operators have done several trials to evaluate their best deployment models. Jio aimed to launch 5G on August 15 to celebrate its anniversary. And Bharti Airtel intended to make the launch in the same month. The commercial launch of public 5G starts from Non-Standalone (NSA) 5G networks in metropolitan cities. A wide rollout to cover key urban and rural areas will take 1 or 2 years. At the same time, mobile operators (i.e., Airtel, Vi, and Jio) are in talks with enterprises and trialing with partners to deploy private 5G networks for Industry 4.0 use cases, which are expected to be the major revenue driver.

ABI Research estimates that, in 2027, 28.5% of the total subscribers in India will upgrade to 5G, which will make India the third largest market with more than 300 million 5G subscribers by then (after China and the United States). (See ABI Research’s Network Technology and Market Tracker (MD-NWMT-106).) Along with investment in 5G, the market will keep expanding 4G coverage to rural areas, funded by the government, and there has been significant investment in fiber assets. According to a local survey, most Indian mobile users suffer from a poor network and low speed, which can’t support mobile applications like digital payments on the existing 3G/4G networks. ABI Research expects significant improvements in the coming years, with increasing investment in network infrastructure.

In the consumer market, mobile operators need to provide flexible and affordable data bundles with handset options for customers, which will help them maximize 5G customer acquisitions. Meanwhile, operators should partner with third-party content/platform providers and increase data consumption channels, e.g., online small businesses, entertainment apps, and online training/education platforms.

The enterprise market is more important to mobile operators. The Indian market is expected to approach a digital revolution, which means large-scale revenue sources from the industry. Mobile operators should continue to invest in Industry 4.0 use cases with 5G networks to drive progress in industrial automation. On one hand, it will help operators directly generate revenue streams from their 5G network infrastructure. On the other hand, it will improve the overall economy of the country and eventually increase affordability for the consumer market.