Can Budget 2019 mark the birth of 5G?

For a long time, telcos have bought spectrum too dear and offered services too cheap. The budget has to make telecom viable if 5G really needs to take off in India.

Jun 30, 2019 12:06 IST India Infoline News Service

In India, 5G (short for 5th generation telecom networks) has been in the news for all the wrong reasons. Recently, the Telecom Minister (Ravi Shankar Prasad) had raised apprehensions about permitting Chinese telecom major Huawei to conduct 5G testing in India due to security issues. Even as China has remonstrated to this statement by India, remember that it is time for 5G in India.
Will the upcoming Union Budget really provide a boost to 5G, and, if so, how?

What is 5G technology all about?
India currently operates on 4G or 4th generation technology. However, this technology (while superior to 3G) is substantially unsuited to high-end data usage. 5G is not only much faster but also is highly robust and reliable (no call and net drops). In addition, 5G technology also comes with low latency, which means you are as close to live streaming as ever. The 5G service has globally opened scores of other opportunities, and in India, it is estimated to have an economic impact of close to 1/3rd of the current GDP.

What can 5G expect from Union Budget 2019?
It needs to be remembered that 5G is not just a technology but also marks a quantum leap in the way technology and communication are deployed to add economic value.
  • The first requirement is the government decision and a schedule on making the requisite spectrum available for 5G. It is expected that Modi’s Union Budget 2.0 may actually make the announcement of spectrum allocation. Normally, the 3.5 gigahertz spectrum is deployed for 5G. This is the first band that is globally accepted for 5G.
  • An important step to the launch of 5G is the setting up of 5G trials. Huawei has been working on setting this up with Indian telcos. However, there was a statement from Ravi Shankar Prasad that they had concerns over Huawei on national security issues. The government has to be clear on how and with whom they would go ahead with 5G tests as that forms the base to launch. That diplomatic tightrope walk may be one more item on the budget agenda.
  • While the potential for 5G is surely big, the challenge for 5G in India is the requisite infrastructure supporting 5G. For example, the total length of OFCs in India is just ~15 lakh kilometres with limited tower fibre connectivity. The government is expected to make big announcements on the 5G infrastructure front to give a push to 5G.
  • The National Digital Communication Policy (NDCP) announced by the Modi 1.0 government has already created the requisite specs for launch of 5G in India. The NDCB envisages broadband for all by 2022, 4mn additional jobs in the digital communication sector, enhancing contribution of digital to 8% of the GDP and also ensuring digital sovereignty. As data becomes the next oil, this budget can be seen putting a big focus on data integrity. While some of the data localization proposals have not gone down well with the likes of Visa and MasterCard, this budget could be the time for Modi 2.0 to make a clear statement in national interest.
  • The budget is also expected to make concessions and incentives available for attracting up to $100bn in investments in the digital sector. This will also require a huge re-skilling effort on the part of the government. While these are not directly linked to 5G, they create the ecosystem for the successful launch of 5G in India in the next few years.
  • Finally, to make 5G a reality, the woes of the telecom sector have to be addressed on priority in this budget. TRAI chief R. S. Sharma already has a wishlist ready for the Union Budget. Sharma wants a review of license fees, spectrum usage charges, and universal service obligations to make telecom services more viable.
For a long time, telcos have bought spectrum too dear and offered services too cheap. The budget has to make telecom viable if 5G really needs to take off in India.

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