Contours of 5G roll-out become clear, consumer must brace for impact

Only two telcos of serious consequence remain standing—Reliance Jio and Bharti Airtel. On their part, both are done with creating all the infrastructure for 5G

There’s an interesting piece of data in the most recent budget that went largely unnoticed but which technology wonks and public policy experts latched on to. This is the news on import duties on telecom infrastructure being upped. On the face of it, not a good decision because it increases the cost of doing business. When this column made its debut on these pages over two years ago by looking at the 5G ecosystem, the point was that Indian telcos earn the lowest and have the lowest ARPUs (average revenue per user) in the world. If it has to grow, enterprise applications such as the Internet of Things (IoT), telemedicine, and connected cars must kick in. Two years ago, things did not look good.

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But much water has passed under the bridge since then. Only two telcos of serious consequence remain standing—Reliance Jio and Bharti Airtel. On their part, both are done with creating all the infrastructure for 5G. “Increasing customs duties doesn’t matter now,” says Gaurav Dua, Head of Research at ShareKhan. “In any case, most people don’t need 5G because 4G already provides sufficient speed and reliability for everyday tasks such as streaming movies, browsing the internet, and using social media.”

BSNL continues to be on life support. The budget provisions that BSNL manufactures equipment and gets paid for it. Which way Vi (earlier Vodafone) goes is anybody’s guess. There is every indicator though that the Aditya Birla group will not let it tank easily.

So, this takes us back two years ago to the telecom bidding wars for the 5G spectrum. What was that all about then? Jio and Airtel paid obscene amounts of money to get it. Even Adani wants a piece of the action and has gotten into the game. A spokesperson for the group did not respond to queries, but first-hand accounts by analysts tuned into the telecom landscape say they will play at the business-to-business (B2B) spectrum of the game. Very simply put, providing services to businesses as opposed to retail consumers. And how does this matter? Let’s look at the larger picture.

Take health care for instance, 5G’s high speed can enable remote diagnostics and telemedicine. This can bridge the gap between urban and rural healthcare services. Such advancements could democratize access to quality healthcare in a country with healthcare disparities. The ripple effect includes a reduction in the urban-rural health divide, fostering more balanced regional development.

The entertainment sector is set to benefit immensely from 5G, with enhanced mobile broadband enabling high-definition streaming and augmented reality (AR) experiences. As platforms like Reliance Jio prepare for widespread 5G services, content creators and distributors must adapt to meet the rising demand for immersive and interactive content. This shift could catalyse the growth of new entertainment ecosystems, driving innovation in content creation and distribution.

For that matter, take banking. Varnika Goel at TwimBit, a technology advisory firm, says that most Indian banks have been at work to integrate their offerings as 5G rollouts into the country. This is one reason why they’ve been at work to convince consumers to download their apps. While customers see this as a convenience, there’s a deeper narrative there. It allows banks to penetrate Tier II cities that would otherwise have cost more by way of infrastructure, such as physical branches. As far as customers are concerned, all their banking needs get done without visiting the branch. The banking narrative, Dua says, can be extrapolated to pretty much every industry that has a customer-facing business to deal with.

Catering to segments such as these is where Adani sees gold as much as Jio and Airtel do. But does this sort out the low ARPUs telcos must deal with from retail consumers? Not really. This is why Dua points out the fact that very recently, both Jio and Airtel hiked tariffs. This, he believes, was a trial balloon to see how far users can be pushed to pay. Now that they have and no one is complaining, it’s a matter of time before they increase some more. There are no free lunch.