Global telecom industry body GSMA expects India to have 920 million unique mobile subscribers by 2025, including 88 million 5G connections. “5G connections in India are forecast to reach 88 million by 2025 … this will leave India trailing regional peers such as China, which is set to see almost 30% of its total connection base on 5G by 2025,” the GSMA Intelligence report released in May said. It said that there were close to 750 million unique subscribers in India at the end of 2018. The report lists opportunities in 5G, key policy recommendations, and the challenges to India’s 5G journey. Here is a summary:

Growth of India’s mobile market

  • India will generate almost a quarter of the world’s new mobile subscribers from 2018 to 2025. In absolute terms, India will remain the second largest mobile market in the world after China.
  • Higher speeds, growing base of smartphones, and increased viewing of video content have fuelled rapid growth in data volumes. TRAI said that the mobile data usage per month in India increased from 39 petabytes in June 2016 to 4,178 petabytes in September 2018. Ericsson estimated that in 2018, India generated more traffic than the whole of Western Europe, with total data volumes set to increase 4X by 2024.
  • Operators are using their own apps and premium content partnerships, with international players such as Amazon and Netflix, and domestic players including Voot, Eros Now, ALTBalaji and Zee5, to defend market share and to help monetise the strong growth in data traffic
  • To play an active role in the emerging use cases and help ensure their relevance to the Indian market, the government has created a 5G High Level Forum, which recommends:
    • The DoT create strict guidelines for state and local governments in issuing clearances. These guidelines should also be promulgated nationwide. Some key improvements in issuing permits are: enabling online applications, reduced fee structures, single window clearance and time-bound decisions.
    • Establishing application and use case labs in India, which could serve a number of purposes, including interoperability testing for new applications, fostering innovation and developing locally tailored solutions.

Policy recommendations by GSMA

To enable network deployment and densification, GSMA calls for increased cooperation between central and local authorities to:

  • Define standardised permit procedures and requirements for notification, health and safety, and visual integration
  • Create a single point of information for granting permits
  • Provide an independent appeals process, which prohibits unfounded bans of mobile network antennas
  • Enforce advance notification of civil works for infrastructure deployment (e.g. road, sanitation, energy, telecoms)
  • Promote initiatives to map infrastructure

Reasonable pricing of 5G spectrum

  • Reserve prices for spectrum in future auctions should be set at reasonable levels so that price determination is through fair market price discovery
  • Govt and regulator must set modest reserve prices and prioritise spectrum allocation to ensure long-term sustainability of the industry

Importance of spectrum to 5G

  • Sufficient, affordable, exclusively licensed, contiguous spectrum across the three key frequency bands should be made available in harmonised 5G bands.
  • Spectrum caps need to be deployed cautiously to avoid unintended consequences and poor outcomes for consumers.
  • Spectrum policy measures that support 5G investment should be adopted.

Harmonised mobile spectrum

GSMA believes that 5G needs a significant amount of new harmonised mobile spectrum in the three key frequency ranges to support coverage and capacity.

  • Regulators should aim to make available 80-100 MHz of contiguous spectrum per operator in prime 5G mid-bands (e.g. 3.5 GHz) and around 1 GHz per operator in millimetre wave bands (above 24 GHz).
  • 5G also requires spectrum within three key frequency ranges to deliver widespread coverage and support all use cases: sub-1 GHz, 1-6 GHz, and above 6 GHz.

Incentivising heavy investments in 5G networks

  • Should include support for long-term, exclusive, technology-neutral spectrum licences with a clear renewal process.
  • The NDCP should be implemented to create a sustainable investment environment and allow operators to make a reasonable return on their investments.

Licensing spectrum bands

The TRAI has recommended that spectrum in the 57-71 GHz band be released as unlicensed spectrum, as well as 71-76 GHz and 81-86 GHz for use in backhaul. These bands could be used in higher-density urban areas as last-mile solutions where fibre links are not available. The 66-71, 71-81 and 81-86 GHz bands are part of the World Radio Conference 2019 Agenda item 1.13 for possible identification for 5G/IMT.

  • GSMA agrees with TRAI’s recommendation to retain the bands 71-76 and 81-86 GHz for backhaul.
  • The 66-71 GHz band could be used for both licensed and unlicensed technologies for last mile solutions and/or for backhaul, depending on the situation in a given area.

Renewed and supportive taxation policy

  • As the industry is a key enabler of socio-economic growth, there is a strong case to lower the GST rate from 18% to 5% as prescribed for other essential services.
  • The complexity of the mobile taxation structure — in terms of, for example, the interpretation of the basis on which licence fees and spectrum usage charges are levied — results in disputes between the sector and the government agencies. To foster an environment that encourages investment in mobile service provision, the mobile taxation framework should be simplified.

Modernising legacy regulatory structures

  • Regulators should promote flexibility to support emerging 5G services (e.g. through a pragmatic interpretation of the Open Internet principle) and should modernise regulatory frameworks.
  • India’s coordinated approach under the banner of Digital India needs to be maintained and developed further as the cross-sectoral use cases require coordinated efforts in managing the 5G ecosystem across the relevant players.
  • On the “level playing field” issue, the GSMA has contributed to TRAI’s consultation on the best way to ensure that digital services are subject to the same rules as equivalent telecoms services.

The challenges for 5G adoption in India

High spectrum pricing

  • Six spectrum auctions have been held in India between 2010 and 2016. The October 2016 auction featured a much greater quantity of spectrum than previous awards, and included seven bands.
  • Only 41% of the available spectrum was sold. The average price was $0.33/MHz/pop (across 850, 1800, 2100, 2300 and 2600 MHz), which was almost 33% higher than the median price in developing countries between 2015 and 2017.
  • ARPU levels in India from 2010 to 2017 were on average almost 35% lower than in developing countries in Asia Pacific overall. This suggests policy decisions by the government and regulator played a role in the high spectrum prices realised in the auction, rather than local mobile market conditions.

Subdued revenue in the telecom sector

Despite fast growth in subscribers over recent years, and the rapid evolution to a more technologically advanced market dominated by higher speed networks and smartphones, the financial performance of the market has remained subdued.

  • On a quarterly basis, revenues have been declining on YoY basis since the end of 2016.
  • Total mobile revenues in India have fallen by more than 20% over the period.
  • ARPU levels have fallen significantly over recent years, despite strong data volume growth, to levels that are likely to prove unsustainable.

High taxation and regulatory levies

  • With a sector-specific tax burden of around 11% of revenues, India is within the top 20 nations with the highest incidence of sector-specific taxes and fees.
  • A previous 2015 report by GSMA recommended reducing the then licence fee from 8% to 6% and the spectrum fee from 3–8% to 1%.

On the road to 5G

A number of operators and vendors have already entered into agreements and set plans for trials, with field trials generally planned for the second half of the year. The report highlighted the following as key achievements:

  • Bharti Airtel and Huawei have successfully conducted India’s first 5G network trial under a test set-up at Airtel’s network experience centre in Manesar, Gurgaon, achieving a user throughput of more than 3 Gbps. Bharti Airtel has signed an MoU with Nokia and Ericsson to support the company in its preparations for 5G roll-out.
  • Vodafone Idea has also proposed 5G trials with multiple vendors including Huawei and Ericsson.
  • Samsung will conduct 5G field trials in New Delhi in 2019, and is working closely with the DoT. Samsung is also likely to be one of Jio’s partners for 5G field trials.
  • BSNL has signed an MoU with Ciena to conduct field trials with the goal of a commercial launch by 2020. Ciena and BSNL intend to jointly evaluate fronthaul, midhaul and backhaul transport-based use cases and scenarios to address resiliency requirements and latency concerns.
  • The GSMA has promoted the development of Mobile IoT labs. 16 Mobile operators and network equipment vendors generally set up Open IoT Labs to help IoT service providers (such as smart energy, smart parking or smart lighting companies) test their device prototypes, fine-tune their IoT services, and provide technical support in preparation for commercial deployments. Massive IoT is one of the principal use cases for 5G. Potential use cases in India target key verticals such as health, agriculture, manufacturing and environmental monitoring.
  • The government launched the programme “Building an End-to-End 5G Test Bed” to advance innovation and research into 5G. The three-year programme began in March 2018, with a budget authorisation of ₹224 crore. Ericsson installed the first public-access 5G test bed at IIT Delhi in July 2018 to develop new applications to allow the industry to work on India-specific applications.