There are investors pulling their money out of the telecom market because of the current environment; then there are investors who are putting their money in the telcos and thinking 5G is going to solve their problem. The thing is, 5G is going to help, but not as fast and not as much as people anticipate it would. There’s one thing absolutely clear; the telcos aren’t going to avoid offering 4G services even once they launch 5G. This is because 5G networks would take a lot of time to be rolled out throughout India. The operators are only expected to do a soft launch of 5G networks in metro cities or towns they are already testing the next generation connectivity networks.
5G Is a Long-Term Play
Look, this is not investment advice. Don’t put money in or pull money out reading this article because there’s no predicting how markets change. But there’s one thing that needs to happen, and that is the government must come out with a relief package for the sector right now. This will help the operators in transitioning from 4G to 5G gracefully.
As of now, Vodafone Idea (Vi) might not be thinking of rolling out 5G networks simply because the telco doesn’t have the money to invest in the networks. Note that Vi is readying itself for the 5G era as it is conducting trials in multiple cities of India.
5G in India is a long-term play for the operators, and it will only help the companies after years of investments. While for the sector, new investors, better cash flow, and government support is required in the near term to help it grow aggressively. India is one unique telecom market as there are several hundred million users consuming 4G data services and yet the operators are struggling financially. A tariff hike is going to help the operators in the short term while government support will go a long way.