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India’s Throw of Dice with 5G Proves Risky

According to the data, in absolute terms, the average price of a 5G phone launched in 2022 is twice the price of a 2G device launched in 2007.
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Despite the ‘official launch’ of 5G services in India in selected cities in October last year, the question mark over its general availability continues to loom. The total cost of the rollout in India is estimated to go up to USD 75 billion—the highest among 15 emerging economies, according to a study by Analysys Mason and Ericsson. It would appear that while the announcements have been already made, the regulatory framework meant to support them is lagging behind. 

Regulation around flight interference 

Even as the rollout is in its initial stages, in December, New Delhi directed telecom operators to not set up 5G infrastructure in areas that were close to their airports to avoid any interference with flights. The Department of Telecommunications, or DoT, which is the country’s regulatory body for telecom operations, ordered Reliance Jio, Bharti Airtel and Vodafone Idea to restrict their 5G infrastructure from a distance of 1.3 miles at all airports in the country. 

The orders were laid out after the Indian Directorate General of Civil Aviation (DGCA) flagged worries around interference between the 5G networks operating on the C-Band spectrum with flight altimeters that help pilots stick to a specific altimeter during the flight. 

5G rollout in the US has been mired in similar troubles for the past year. Companies like Verizon and AT&T are now working with their airport authority, the Federal Aviation Administration (FAA) to determine the action that needs to be taken to protect commercial flights from 5G interference. 

Since then, the Indian telecom minister Ashwini Vaishnaw and Telecom Regulatory Authority of India (TRAI) chairman P D Vaghela have come out and said that 5G interference with flights isn’t an issue in India. However, the mix-up with the telecom industry has thrown a spanner in the works. 

Meanwhile, Airtel has deployed 5G infrastructure at nearly four airports in India while Jio has plans to do the same in the near future. What could eventually end up happening is that users around airports would not be able to connect their 5G compatible devices. 

Delay in phone manufacturers

Even barring regulatory confusion, there’s a wide gap in the devices themselves. Since the four months that 5G was launched, users of a number of models from brands such as Xiaomi, Poco, Vivo, Oppo and Google Pixel still aren’t able to avail 5G services, despite having purchased a 5G handset. 

There has reportedly been a delay with the manufacturers providing software updates that make these services available. Complaints have poured in from users forcing the DoT to set up a meeting with these operators. 

Inaccessibility of Devices

The high price points of the phones aren’t expected to help their case either. A recent study undertaken by the telecom market analytics firm, ‘Techarc’ in partnership with ThePrint demonstrated that 5G phones are now more expensive than 4G phones were at the time when the latter technology was gaining popularity. 

According to the data, in absolute terms, the average price of a 5G phone launched in 2022 is twice the price of a 2G device launched in 2007. Likewise, the price of a 5G phone is much higher than 3G and 4G phones launched in 2010 and 2015, respectively. 

Sales of 5G smartphone units globally 2022, Source: Statista

This automatically makes 5G inaccessible to the economically weaker classes in the country. For a nation like India, if a service has to graduate from a marketing buzzword to becoming ubiquitous, this is a hurdle it must overcome. For instance, UPI was able to do this.

Macro issues with telecom industry

The telecom industry itself has also been plagued by serious issues which have threatened the existence of most companies. While Jio has announced plans to go pan-India with 5G by December 2023 and Bharti Airtel has also shared similar goals by March 2024, the cash-strapped Vodafone India hasn’t announced any 5G roll out plans yet. 

Source: Vodafone blog

Plainly put, the company has no funds to continue procuring 5G equipment. Dwelling in a net debt of an estimated INR 2.2 lakh crore and a gross cash balance of INR 190 crore, Vodafone India’s equipment orders are stuck in the pipeline. With this, the company’s newly-appointed chief Akshaya Moondra recently told shareholders that the company could only set up a timeline for a launch if they were able to arrange funds. 

The DoT is keeping a close watch on Vodafone’s 5G plans as non-compliance of their minimum roll out obligations by September–October will result in a penalty. 

Executives from equipment companies have claimed that the expenses for Vodafone may be higher than say, Airtel because the company will first need to upgrade to a 4G layer mainly with Huawei equipment. It looks like a lose-lose situation for Vodafone, which is already riddled with considerable financial pressure. 

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Poulomi Chatterjee
Poulomi is a Technology Journalist with Analytics India Magazine. Her fascination with tech and eagerness to dive into new areas led her to the dynamic world of AI and data analytics.

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