Three Things Ericsson’s Magnus Ewerbring Says Are Key To 5G Rollout In India
The rollout of the fifth-generation wireless network in India hinges on government policies, investments and device ecosystem, according to Ericsson, as carriers get ready to offer better user experience in streaming, gaming and entertainment in the world’s second-largest telecom market.
The high-speed technology was first commercially launched in South Korea in April 2019. Since then, it has been rolled out in more than 26 countries and added close to 190 million subscribers, a bulk of them coming from China, which launched 5G in October 2019.
“South Korea was very early to deploy 5G and has already achieved just below 90% population coverage. It added over 10 million 5G subscribers, of the 70 million users in total,” Magnus Ewerbring, chief technology officer (Asia Pacific) at Ericsson, told BloombergQuint in an interview. China, he said, has had an impressive rollout. This year they have added many base stations and improved infrastructure.
The appeal of 5G technology comes down to its ability to transmit data fast enough to download feature-length movies in seconds. While India is yet to auction the 5G spectrum, the technology, Bloomberg reported citing a Deloitte report, could be the catalyst for the nation’s digital economy that has the potential to reach $1 trillion by 2025. Reliance Jio Infocomm Ltd. has claimed to have developed a complete 5G solution from scratch, entering the league of Ericsson, Nokia, Samsung and Huawei.
Ericsson has so far signed 118 commercial agreements, and went live with 74 operators globally.
The Indian government, according to Ewerbring, needs to bring clarity on the licensing of the radio spectrum. It needs to clarify which spectrum bands can be used and whether the current bands can be used for 5G rollout.
“My recommendation is that the existing bands can also be used for 5G. That will draw down the cost of deployment and the speed of coverage,” said Ewerbring adding that clarity on usage of the current spectrum will allow mobile operators to build coverage.
Use of Existing Spectrum
Reliance Jio has 115 megahertz of spectrum, which it received from Reliance Communications Ltd. through spectrum sharing in 19 circles and it’s up for renewal. While Vodafone Idea Ltd. has 37.8 MHz of spectrum in the 1,800 MHz and 900 MHz bands coming up for renewal in the next six to 12 months, Bharti Airtel Ltd. has 57 MHz of spectrum in the 1,800 MHz band.
If companies can get to buy back the spectrum during the auction, it would be cost-effective for them to roll out 5G, according to Ewerbring.
What he means is that the existing spectrum bands can be used provided the government offers them in bundles of 100 MHz of continuous spectrum to each operator to meet 5G efficiency. This will reduce capex cost.
“It’s not a rip and replace (replacement of equipment). It will be if you are deploying a new frequency band, you will need to deploy the radio equipment for that,” he said. But using the existing bands, according to Ewerbring, would allow reuse of equipment, helping the operators to launch the services earlier. Aggregating the spectrum bands, he said, is important as the cost per GB would go down.
Investment in 5G technology, Ewerbring said, depends on spectrum cost, site upgrades and fibre connectivity for lower-mid bands across the country.
The Indian government, according to the telecom department, has offered 700 MHz and 3,300-3,600 MHz spectrum band for 5G, pegging the cost at Rs 32,800 crore for 5MHz of the 700 MHz band, and Rs 2,450 crore for 5 MHz of the 3,300-3,600 MHz band.
Motilal Oswal estimates the cost of investment, including site and fibre infrastructure costs, to range between Rs 1.3 lakh crore and Rs 2.3 lakh crore for pan-India, and Rs 78,800 crore to Rs 1.3 lakh crore for metros and A-cities.
So far, South Korea’s 5G launch has seen limited use for consumers. “We have the traditional consumer segment having a great interest in using immersive content, more augmented reality or virtual reality-related content, and of course more appealing services and higher desire to pay more,” said Ewerbring.
The other is the possibility to support enterprise with digital infrastructure and 5G technology. “So, 5G will become the digital backbone for society. Industries will use it for running their operations,” he said.
One of the biggest issues facing the 5G use is the return on investments for telecom companies.
“Business logic requires you do an investment, and you need to get a return on it,” said Ewerbring. “It’s still early days in South Korea and 12-13% of subscribers are in 5G. Before the launch of 5G, there was a decline in ARPUs (average revenue per user) but after the launch, the decline has stopped and ARPU is going up.”
The other challenge is the device ecosystem for 5G network.
“We have seen more kinds of devices from several vendors. We have seen prices drop over 50% for the devices. There are very good mid-range devices in $300 and it’s constantly dropping,” said Ewerbring.
Still, that’s quite expensive for India.
According to the Ericsson Mobility Report, there will be 3.5 billion 5G subscribers alone by 2026, which is 40% of all users globally. And 45% will be 4G subscribers. While the rate of growth is much higher for 5G, there will be more 4G subscribers globally by 2026.
In India, there will be 350 million 5G subscribers by 2026, which is 27% of its total subscribers. And 4G users will be at 800 million, 59% of the total base, the report said.
“This goes hand-in-hand with device cost going down and coverage improving. We have seen for every new generation the rate of growth will be very fast but 4G will be there for a very long time. If you can share the same radio frequency for both 4G and 5G, it’s less dramatic for both users and operators. It will be a fantastically large ecosystem, which through its scale will push the cost down,” said Ewerbring.
Watch the full interview here: