5G in Telecom Industry

Executive Summary
India is nearing digital revolution and this is further driven by increasing penetration of internet,
increasing volumes of data consumption. This is likely to give rise to opportunities for growth and
boosting productivity. Along with the noteworthy improvements in network performance provided by
5G over the previous generations, it is also expected to increase the scope of service beyond the
traditional voice and data via enablement of technologies like Internet of Things (IoT), Robotic Process
Automation (RPA), Artificial Intelligence (AI), (AR/ VR) etc thereby generating use cases across various
industries. This report puts forth a view on the key benefits and challenges facing the adoption of 5G,
readiness of India w.r.t. 5G, comparison between 4G deployment model and 4G & 5G deployment
model and recommendations to telecom operators who wish to implement this technology.

5G
Upgrading from 3G to 4G was an upgrade in technology, that is not the case with 5G. 5G focusses
more on enhancing the network incrementally from the existing LTEs (Long Term Evolution). And as
these enhancements are being made, newer opportunities in the service domain are opening up

5G is a blend of five capabilities in terms of technology which give birth to three families of use cases
which are:

1. Extreme mobile broadband and fixed wireless access

Furthermore, 5G also supports capability of network slicing.

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Limitations of 4G and fixed broadband
Fixed broadband

• Does not meet mobility expectations of consumers.

4G

• High latency prevents application in industrial and critical use cases

Benefits
Telcos can get various benefits from the 5G technology.

New Revenue streams

There are various revenue streams that telcos can tap. None of the developments from 2G to 4G
opened up avenues for service beyond the traditional methods of generating revenue. 5g is expected
to bring about a change in this with enhanced network capabilities and 5G-enabling tech such as IoT
or AI. One is through competing in newer markets. For example, going head-on with the fixed-line
competitors and providing faster 5G service as compared to the current wired broadband offerings.
Also, using 5G FWA will save costs by replacing the expensive FTTH and FTTP and choosing an option
which is more viable and has higher spectrum accessibility. Also, with 5G being deployed in many
regions for better speed and enhanced network capacity in cities where there is a requirement of high
rates of data, there is a great potential for transforming consumer experiences

Reduce Costs

With high costs of investments, be it for spectrum or device upgrades which are necessary to build
5G, it is often a sceptical option to pursue. But these costs are offset by the 1000 times more capacity
and speed which is 100 times faster. This will result in an immense drop in unit cost per gigabyte of
data traffic, thereby increasing margins. Furthermore, with an increase in automation in the planning
and operations of network, costs will see a further dip.

Improve the customer experience

The low latency and almost-real time response result in a much superior customer experience using
the 5G networks for various applications like video streaming, video calling, gaming and the likes

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Challenges with 5G
Although benefits are in abundance, there are some fundamental challenges facing 5G
implementation as well. Some of these are:

Right of Way(RoW) and lack of uniform policy framework

The current framework for deployment of network infrastructure is a combative issue in India. With
time taking and complex procedures, no uniform tariffs across states, time-taking approvals, it has
always been an obstacle for telecom operators in setting up towers and optical fibre cables. Despite
the recently introduced RoW rules to standardise procedures, there have been constant barriers to
implementation. With adoption of 5G, there will be a need for widespread development of
infrastructure; but with these roadblocks, it will result in delays and complexities.

Limited giga-backhauling

A robust backhaul network will be required to withstand the low latency and high throughout
expectations of 5G. So, India needs to speed up its digital transformation and do so by building
capabilities in broadband networks together with cloud, big data etc.

Industry under margin pressure

Implementation of 5G is associated with high levels of capital expensiture, and with rising debts of
telecom operators, there is a constrain on telcos in terms of capex.

Complexity of network modernisation and densification

Implementing 5G use cases over 4G network can be a bit of a challenge as for higher throughput, it is
required that the cells are denser and smaller which has not yet been fully implemented for 4G.

Security and Privacy issues

With the rise of a new technology, there is an increase in the security and privacy being compromised
as it will lead to greater number of connected devices. With growing internet penetration and
connectivity, there has been a significant rise in cyber-attacks as well.

Managing mobile data traffic growth

Consumption of mobile data is growing at a faster pace than ever and is expected to grow by 8 times
up to 2023. Also, expectations of consumers for delivery of satisfying user experience is rising, example
– video is said to evolve form HD to 2K and 4K. Keeping up with these rapidly growing expectations
may pose a challenge to companies.

Consumer awareness

Unlike 4G, consumer awareness is low and devices/handsets supporting 5G are not yet introduced on
a large scale. Also, telecom operators may be charging a premium for the service which consumers
may be reluctant to shell out of their pockets.

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Comparing deployment models, 4g with 4g+5G
• Saving costs – As data traffic increases, there is a need to upgrade the network capabilities
and this can be done by adding small cells and densification of the same, but this is an
expensive measure and this is where 5G acts as an alternative
• Furthermore, there are some market advantages as well which telecom operators can
leverage. These are lower churn, higher market share, higher ARPU and Increased network
cost efficiency.

Readiness of India
There has been a rapid growth in the usage of mobile data in India. With a growth of mobile
subscribers to 750 million in 2018, India is the second largest mobile market. There has been a
noticeable migration to broadband, especially 4G devices which indicates adoption of smartphones,
which can be attributed to the relatively lower cost smartphones.

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The graph shows increasing consumption of data volumes which is due to increase use of smartphones
and high-speed networks. We can also clearly see the 4G adoption in India in 2018, which was greater
than the global average. This is a cue that India is switching to 4G and will soon be ready for 5G.

Recommendations
• Understanding the willingness of the consumers and the demand for 5G, understanding the
kind of services of experiences that consumers expect and then defining strategies to
monetize this technology.
• Telcos must partner up with players from industries across the value chain and discover new
opportunities for future needs of consumers for services.
• Expand the 4G network so that it becomes to expand to 5G and enable a smooth transition
from 4G to 5G. This can be done by densifying the 4G network via technologies such as small
cells, DAS, IBS, etc.

Conclusion
It can be said that India may be ready to embrace the use cases and advantages of a technology like
5G and will do so in a timely manner unlike the 3G or 4G adoption. In order to do so, telecom operators
have started expanding their network capacities by investing in LTE so as to have a smooth migration
from 4G to 5G. Furthermore, due to the low latency and high-speed features, it can be used for
applications beyond traditional data and voice services. 5G will enable deployment of technologies
such as IoT, AI, VR etc. on a more frequent basis thereby ensuring adoption of these technologies
across various industries such as healthcare, automotive, manufacturing, agriculture etc.

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