5G service in India to attract Rs. 1.5 billion investment in 2023, likely to increase tariffs: Report

From connecting people to 5G service to reducing operating costs, the country’s revitalized telecom sector is seeing a blossoming of reforms and is set to attract more than 1 Rs 5 lakh investment to build the network in the new year.

Once the epitome of India’s growth story, then a debt-ridden segment that decimated many players, and now driving a wave of reforms and massive investments, the telecom sector communication has entered a new chapter in 2022.

When Adani’s group has yet to reveal its official plans for the telecommunications business, Dependent industry President Mukesh Ambani has pledged Rs. Invest 2 lakh crore to launch one 5G nationwide network by December 2023.

“It’s been an exciting year because of the launch of 5G, a technology that has been awaited for 4-5 years. This is a big step forward. We expect 5G to be rolled out strongly next year because of the year. now is just the beginning.

“We’re all working on use cases. We’re talking to state governments, ministries, startups and innovators to come up with innovative use cases in the Indian context. India, this will open up business activities and will also solve some public issues, some challenges,” Telecommunications Minister K Rajaraman told PTI.

He also said the government would continue to take measures to help reduce operating costs for telecom operators, a move that would result in higher profit margins for the sector, already reeling from debt burden for more than a decade.

Jio’s dependency committed Rs 87,946.93 crore for the spectrum it pays for over a 20 year period, leaving a balance of Rs 1.12 lakh. Although the company has partially invested in building its own 5G core, it will invest most of the Rs 1.12 lakh in capital investment for 5G by 2023, according to the sources.

Bharti Airtel It is expected to invest between Rs 27,000-28,000 crore and be state owned BSNL around Rs 16,000 crore by 2023 to deploy the 4G network developed in the country by TCS and a consortium led by C-DoT. After that, the system will be upgraded to 5G.

Together, investments worth more than Rs 1.5 lakh are expected to be made in the telecom sector.

COAI Director General SP Kochhar said structural and procedural reforms in the telecommunications sector were approved by the government last year such as e-KYC, which eliminated the Spectrum Usage Charge (SUC) for spectrum. purchased in a future auction, 100% FDI under an automated route as well as streamlining bank guarantees, Adjusted Gross Revenue (AGR), interest and penalties, and facilitating Favorable Right-of-way (RoW) has positively impacted the sector in 2022.

Digital Infrastructure Vendors Association general manager TR Dua said most state governments have followed the Center-led reforms and introduced infrastructure-friendly policies. telecommunications this year.

Recently, Minister of Telecommunications Devusin Chauhan informed the National Assembly that telecom operators are installing an average of 2,500 base stations per week to provide 5G services in the country and 20,980 mobile base stations have been installed. Booked as of November 26.

Specialized in telecommunications equipment — nokia and ericsson – have ramped up their production in India. The government has also received investment commitments worth Rs 4,115 billion from 42 shortlisted companies under the Manufacturing Linked Incentive (PLI) scheme to manufacture telecommunications equipment.

Nokia says it is seeing the world’s fastest 5G network rollout in India.

“In 2023, we expect to see continued government support in enabling the digital ecosystem to truly harness the benefits of the socioeconomic applications of 5G technology. 2023 is also expected to see businesses and enterprises more widely adopt private networks to improve efficiency and security,” said a Nokia India spokesperson.

Ericsson Managing Director, India & Network Director, Southeast Asia, Oceania & India, Nitin Bansal said that Enhanced Mobile Broadband (eMBB) and Fixed Wireless Access (FWA) are planned. expected to be the first 5G use cases in India. This technology will help bridge the digital divide by addressing concerns about limited fixed broadband penetration and improving the data experience on the go.

Tech Mahindra President, Media, Media and Entertainment Business Division, and CEO, Network Services, Manish Vyas, said 5G will be used to develop revolutionary applications and innovative use cases across industries, such as manufacturing, healthcare, BFSI, and autonomous driving.

“We see 5G for enterprise (5G4E) as our next growth strategy, and we have done many tests around the world,” he said.

Senior Vice President of IDEMIA India Rahul Tandon said that as India opens up 5G connectivity, it will open up new possibilities to enhance the productivity and safety of not only online transactions but also all Machine2Machine (M2M) transactions.

While telecom operators are investing billions of dollars in building 5G networks, a senior Airtel official said there is currently no application that can help companies monetize 5G.

“5G is helping to offload traffic from 4G networks. 5G is a very efficient and better technology but currently applications like videos, games, etc. are working well on 4G. We have not seen it yet. any application that can specifically assist in monetizing 5G,” the official said.

He also said the company expects growth to come from customers upgrading their services from 2G to 4G, prepaid to postpaid and postpaid to home broadband, and price increases.

The annual tax increase of telecom operators – Bharti Airtel, Vodafone idea and Jio — in the 18-42% range that have delivered companies a sustainable Average Revenue Per User (ARPU) in 2022.

Vodafone Idea took the lead in November 2019 to increase mobile service prices by up to 42%. Bharti Airtel and Reliance Jio have followed VIL in raising taxes.

The tax increase in 2019 comes after a gap of about 5 years. Data prices fell 95% to Rs 11.78/GB in 2017 from Rs 269/GB in 2014.

Bharti Airtel is running a test to increase its entry-level mobile plan by 57%. The company has increased the minimum recharge price for a 28-day mobile phone plan by 57% to Rs 155 in Haryana and Odisha.

A company official said it will review the results of the tax increase in six weeks to decide whether to raise taxes across India.

Although VIL has been able to operate until 2022, 2023 is likely to be a successful year for the company as the company is heavily indebted waiting for the government to choose about 33% of the shares under the conversion plan. interest rate. into equity.

A note by JM Financial in October 2021 said VIL would need to have an APRU of at least Rs 190-200 by March 2023 to survive but the company is far from hitting its target and is struggling in Checking the churn rate of subscribers.