5G auctions - paving the way for tele surgery, internet of things | Current Affairs

Why in news?

India’s much-awaited 5G spectrum auctions concluded with the spectrum being acquired by the three incumbent telecom operators and one new entrant.

Why are the recently concluded 5G spectrum auctions significant?

51,236 MHz of the spectrum was acquired during the auction for a total consideration of ₹1.50 lakh crore.
The spectrum auction marks a turning point for India’s telecom market.
5G technology will enable the delivery of critical services such as telesurgery and the Internet of Things over a mobile network with unprecedented efficiency.
Globally, many countries including the US have already launched 5G services.

What did telecom service providers shop for?

Spectrum in three bands, namely, low (constituting of 600, 700, 800, 900, 1800, 2100, and 2500 MHz bands), mid (3300 MHz), and high (26 GHz – 1 GHz equals 1000 MHz) frequency bands were put up for auction.
The low band spectrum is popular for providing wider coverage, however, the speed and latency might just be an incremental upgrade over 4G.
Speed is subject to the proximity to the source.
Additionally, signals from the low-band spectrum can travel through windows and walls which is not the case with the high-band.
The high band spectrum can provide speeds of up to two Gbps but is unable to travel longer distances, at times, less than a mile.
The mid-band spectrum falls somewhere between the low and high band spectrums.
It can carry sizeable data over longer distances and maintain increased speeds.
While making bids for spectrum, telcos take note of their existing financial position and priorities.
Thus, not all spectrum on offer is acquired.

When can consumers in India start using 5G services?

Indian consumers can hope to get 5G services in metro areas to start with by October.
But operators still have a tough road ahead when it comes to execution.
They have an extremely expensive Capex cycle ahead of them for the next few years.
The pricing dynamics in India are usually slow-moving amid resistance to paying premium prices for telecommunication services.
This means that the transition to 5G services could be slow moving and restricted to certain urban centers for the next few years.
The initial launch of 5G is likely to be restricted to one or two major metros.

Will users need new handsets for 5G services?

The user’s mobile handset must be enabled with 5G capabilities.
5G-enabled mobile handsets are usually more expensive.
According to a recent report by CounterPoint Research, only 15 to 20 percent of handsets currently sold in India are 5G ready.

What upgrades are necessary for 5G implementation?

The mass roll-out of 5G is likely to take some time.
It may happen only in the next fiscal since telcos need to first upgrade fiberisation.
They also need to launch commercial services in at least one city of each circle by the end of the first year of acquiring the license, as per roll-out obligations.

Will the service be expensive compared to 4G?

Given the massive Capex demands, 5G telecom plans will also be more expensive.
The first consumers for 5G will be in urban areas and people who can afford expensive smartphones and premium tariff plans.
Given the geopolitical uncertainties as well as the consequent macro and supply chain uncertainties, the road towards a mature and all-pervasive 5G network is a long one.
Consequently, telecom operators also have to take the call regarding whether they should conduct a slower or aggressive rollout of 5G services.
All indicators suggest that the evolution to a mature 5G ecosystem will be a slow one.
Ultimately the Indian consumer should get used to the idea of paying more for telecommunication services.
Since Jio’s 4G revolution, India has enjoyed some of the cheapest tariffs across the globe.
Leading up to the auctions the industry already took a 20 percent hike in tariffs last winter.
Given that telcos were more aggressive in the auctions than expected, analysts predict that the telecom industry is preparing for another bout of tariff hikes.
5G mobile plans and the surrounding ecosystem will also become expensive going ahead.
Operators are likely to charge a premium for 5G services.
However, 5G or no 5G, mobile subscribers will be paying more for the services.

Which operator is better placed to offer 5G services?

Nearly 60 percent of the spectrum sold by value was bought by Reliance Jio for ₹88,100 crores.
Jio is the only operator to acquire spectrum in the all-important 700MHz which was priced so high that no other player could acquire it.
The premium band is known to improve indoor and rural coverage as well as possessing the ability to penetrate through walls and properties more effectively.
This gives Jio a massive advantage over other players because 700 MHz is considered to be best for indoor coverage.
In addition, Jio has amassed the highest amount of 5G spectrum in 3.3GHz and 26GHz.
Its nearest rival, Bharti Airtel bought spectrum worth ₹43,100 which will help it to become the only other pan India 5G operator.
Weighed down by dues, Vodafone Idea was subdued in its auction play and bought 5G spectrum only in certain circles.

What about the new player in the fray, Adani?

Adani bought a limited spectrum of 26MHz- specifically for private network services.
Private networks are another use case that telecom operators are exploring for 5G.
In this domain, they have competition from players that usually do not dabble in telecommunications.
This includes Adani, Tata, and other tech majors.
The company would provide private network solutions with enhanced cyber security in its airports, ports and logistics, power generations, transmission, distribution, and various manufacturing operations.

What is the way forward?

Telecommunications in India is a price-sensitive and competitive market.
The sector is capital-intensive and has to consistently invest in upgrading technologies and improving services.
However, 5G may not mean much for rural India.

Telcos are likely to block the entry of other firms into the private network space.
Voice and data services will however provide the most revenue for 5G in the near term.
It all depends on how telcos utilize the spectrum they have purchased and how soon the government firms up regulations on private networks.

Reference:

5G auctions - paving the way for tele surgery, internet of things