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5G rollout cloudy but telcos remain upbeat

Despite many difficulties, the larger telecom ecosystem feels rising demand will keep the 5G discussion going

India’s 5G roll-out remains under a cloud with the covid-19 outbreak compounding the problems faced by the already stressed telecom sector. Bharti Airtel Ltd and Vodafone Idea Ltd have said they will not participate in the 5G auctions at such high prices.

India’s 5G roll-out remains under a cloud with the covid-19 outbreak compounding the problems faced by the already stressed telecom sector. Bharti Airtel Ltd and Vodafone Idea Ltd have said they will not participate in the 5G auctions at such high prices.

Ratings agency Fitch said that telcos do not have the financial capacity to go for it. “A 5G spectrum auction looks increasingly improbable in 2020 in light of incumbent telcos’ limited financial flexibility, a high base price of $7 billion for pan-India 5G spectrum in 3.3GHz-3.6GHz bandwidth and a limited business case for 5G, when 4G penetration is only around 50%."

Ratings agency Fitch said that telcos do not have the financial capacity to go for it. “A 5G spectrum auction looks increasingly improbable in 2020 in light of incumbent telcos’ limited financial flexibility, a high base price of $7 billion for pan-India 5G spectrum in 3.3GHz-3.6GHz bandwidth and a limited business case for 5G, when 4G penetration is only around 50%."

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However, the larger telecom ecosystem remains confident that despite the difficulties, rising demand for internet-based services will keep the 5G discussion going.

“There are several applications that will need 5G in the future, especially in areas of medical devices, which won’t work on 4G. As a denser sensor-driven device environment becomes increasingly relevant, there will be need for 5G," said Rajan S. Mathews, director general of Cellular Operators Association of India (COAI), which represents the connected devices ecosystem.

STL group CEO Anand Agarwal said now the customer focus is on building mid- to long-term capacity due to the increase in network usage. Networks are running at peak globally and coupled with the large number of enterprise applications running non-stop, the high load is not likely to go down again. “As a technology 5G will be extremely relevant for smart enterprise and smart city use cases."

He expects 5G to find faster adoption through industry 4.0 use cases, but telecom spend will continue in capacity building for the time being.

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