Motilal Oswal Financial Services on Thursday said that the 5G deployment in India for commercial use is “still more than a couple of years away.” The firm in a report said that the extended timeframe for 5G is due to multiple factors such as “spectrum availability” and that the “ecosystem development would take much longer.” The report is on the heels of Bharti Airtel announcing that it has become the “first” operator in India to “successfully demonstrate” and “orchestrate live 5G service over a commercial network in Hyderabad.” Airtel said that its 5G demonstration on Thursday was on its “existing liberalised spectrum in the 1800 MHz band” through the non standalone (NSA) network technology.
Motilal Oswal Says True Power of 5G Would be Possible on 3.5 GHz Spectrum Band
Motilal Oswal said that the demonstration by Airtel is to “showcase its capabilities in 5G and push the 5G ecosystem” such as applications, content and services.
“There is no incremental capex as it would over time offset 4G capex and part of the investment would be fungible,” Motilal Oswal said in a report on Thursday.
However, the Indian diversified firm engaged in the financial services said that Airtel needs a “larger chunk of spectrum” currently available in the 3.5 GHz spectrum band to “deploy” on a NSA network.
“Bharti (Airtel) can start 5G operations without 3.5 GHz spectrum,” Motilal Oswal said in a report on Thursday. “But the latter would play an important part as the true power of 5G would be achieved only with [a] good quantity of 3.5 GHz spectrum.”
The firm also highlighted that the second largest wireless operator in India has a “large chunk of spectrum between 1800 MHz and 2100 MHz” bands along with sub-Giga band spectrum in most circles. Motilal Oswal said that the spectrum held by Airtel can be “over time reframed for 5G” across India.
“NSA deployment can be better as it would complement its existing 4G network” Motilal Oswal said in a report on Thursday. “Standalone (SA) network rollout would require a new core. So, initial deployment would be on NSA and then for certain pockets it would be deployed on a SA network.”
Motilal Oswal Says ARPU Very Low in India
Motilal Oswal said that the launch of 5G services in India would only happen “when a true 5G experience can be delivered” by the operators.
“This would be dependent on availability of reasonable quantities of spectrum in the 3.5 GHz band,” Motilal Oswal said in a report on Thursday. “It can also be implemented by re-framing lower spectrum bands, but it would be premature to do so at this point of time given the readiness of 4G vs 5G at present.”
It has to be noted that Airtel on Thursday said that 5G experience will be “available” to its users “when adequate spectrum is available” and when it receives approvals from the government.
Motilal Oswal also said that the 5G ecosystem in India should be a “common global system” as it would ensure the “device prices are lower and interoperable.” The firm said that “there is a need for an ecosystem of devices, content and applications” and that Airtel is “working with partners to make India-specific solutions.”
It was also highlighted that Airtel has one million “5G ready” users on its network with a handset cost of Rs 20,000. The firm said that the 5G device prices should be between Rs 10,000 to Rs 15,000 for the “masses to adopt this technology.” Motilal Oswal highlighted that Airtel is partnering with “multiple handset OEMs for devices” with 5G capabilities while Ericsson is partnering with Airtel for 5G implementation.
Crucially, Motilal Oswal said that the average revenue per user (ARPU) in India is “very low” and that it “needs to rise” to Rs 200 and then to Rs 300.