5G in India – does the aam aadmi even need it?

• 5G in India is inching closer to reality, with the Indian government planning to hold the spectrum auctions in the coming weeks.
• There has been a lot of noise around 5G in India, from telcos to big tech, but there has been little effort to address why exactly 5G makes sense to common people like you and I.
• While 5G promises faster speeds and lower latency, is it what the common people need?

For several years now, Indians have been talking about 5G. While it is certainly not new, it has caught the fancy of Indian smartphone users, with 30 million 5G phones being sold in the last year before even telcos acquired 5G spectrum, with services far away.

In the meanwhile, Indians are not short of high-speed internet. 4G coverage has crossed 99% of the country, making it a ubiquitous service and not one that is just used by high paying subscribers. In fact, the cost of 1GB 4G data in India is the cheapest in the world, at just ₹7 per GB (approx.$0.09).

5G promises faster speeds, lower latencies and higher subscriber capacities. But, it might as well be a solution in search of a problem that most people don’t yet face. In this story, we try to address the challenges for 5G in India, and whether it makes sense to common people like you and I.

The case against 5G

Tariffs

Cheap, high-speed data combined with unlimited voice calling and SMS makes 4G a really useful service that will be hard to replace. To make matters worse for 5G, a 20-25% increase in 4G tariffs has resulted in a decline of 7.5 million subscribers as people shut down their second SIMs and telcos hunt for ARPU growth.

There are two possibilities as India goes into the 5G era – either the telcos increase their 4G tariffs to a level where they can provide 5G services without increasing the prices, or announce 5G tariffs at prices a notch higher than 4G.

Either way, consumers might have to pay slightly higher prices when 5G services are launched commercially.

Is there a need for speed?

According to Speedtest’s latest report, the median 4G speeds in India are a little over 14 Mbps, making India the 115th ranked country in the world in this regard. The global average is 2x higher than India’s, at 30 Mbps.

To put this into perspective, popular video streaming services like Netflix, Disney+ Hotstar and Amazon Prime recommend minimum speeds of anywhere between 2 Mbps to 6 Mbps for HD content. For livestreams, Disney+ Hostar recommends speeds of 8 Mbps.

For 4K HDR content, all the services recommend a minimum speed of 25 Mbps.

Popular video conferencing solutions like Zoom, Microsoft Teams and Google Meet work well with anywhere between 1-3 Mbps speeds.

In our testing, we found that WhatsApp works really well on video calls with anywhere between 0.1-0.25 Mbps on an average.

5G promises to offer an increase of anywhere between 10-100 times in terms of speeds when compared to 4G. Given that our 4G speeds are comfortably higher than speeds required by the most demanding use cases, do we really need even a 10x increase in speeds?


5G does promise lower latency when compared to 4G, but even that is a solution to a small subset of users.

5G phones availability

According to a report by IDC, 5G phone shipments in India reached 30 million in 2021, with over 10 million of those in active use. This is barely a blip in terms of the total telecom users in India, which stands at over 1.1 billion, according to TRAI data.

However, an Ericsson report claims that the total 5G subscribers could reach a whopping 500 million by 2027. That number seems even more eye-popping considering that it says there will be 700 million 4G subscribers as well – at 1.2 billion, that is more than India’s total telecom subscriber base.

However, as things stand today, with a little over 10 million active 5G phones, the first few years will be difficult for telcos as far as 5G subscribers are concerned.

Higher cost of 5G phones

According to a report by IDC, the average price of 5G phones hovers around $375 (approx. ₹29,300), and by the end of this year, the research firm estimates that all phones sold above $300 will be 5G compatible.

That is still a terribly higher cost when compared to the average selling price of 4G phones. For instance, the average selling price of Xiaomi’s 5G phones is 2x of its 4G phones.


As 5G phones become more commonplace, the average selling price is likely to come down. But for now, they remain out of reach for millions of people.

What do the telcos think?

Telcos, too, seem to think consumers like you and I won’t contribute much to 5G revenues, at least initially.

Dr. SP Kochhar, the director general of COAI, an association of telcos, told Business Insider India that the telcos expect consumers to contribute only 30-40% to telcos’ 5G revenue. The telecom companies instead expect enterprises to drive their revenues, with a share of 70%.

To sum it up, the lack of adequate use cases for consumers, expected higher prices of 5G services, the lack of 5G smartphones and the overall higher cost of 5G phones mean that 5G for the aam aadmi might not make much sense, for now.

SEE ALSO:

INTERVIEW: The big picture on 5G, Big Tech-telco war with COAI’s Dr SP Kochhar

5G in India – who, what, when, why and how much?

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