Effect of a 5Gi Mandate Goes Beyond the Telecom Industry

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Effect of a 5Gi Mandate Goes Beyond the Telecom Industry

Effect of 5Gi Mandate in India

As if the Indian telecom industry was not inundated enough by roadblocks in its development and financial fruitions, the troubles are already on for the coming of 5G as well. Even before the launch of fifth-generation network technology in India, there is a raging debate going on in circles about the kind of standardisation the companies and the government would use for the deployment of 5G network. There is the much popular standard of 5G which has been developed by 3GPP. This standard is widely in use and accepted by many countries like USA, UK and others. However, in India, the Department of Telecommunications (DoT) which represents the government’s interests in the telecom industry, has been rooting for the Indianised 5G standard, also known as 5Gi. This standard has been developed by Telecommunications Standards Development Society, India (TSDSI).

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Telecom Operators Show Concerns on 5Gi

The most vehement opposition of the 5Gi standard has been coming from the telecom operators themselves. Since they are going to be leading the 5G revolution in the country with their deployment and services of the network technology, it is their primary concern as to which standard they would have to use. The deployment of the 5G 3GPP standard allows the telcos to use the technology, software and techniques which are widely available across the world without any extra investment. On the other hand, the deployment of 5Gi would require an altogether different configuration, software and specifications that would shoot up the costs of these telecom companies.

Questions About PLI and 5Gi

However, the debate goes just beyond this. One of the schemes of the present government, which has been in the headlines is the Production Linked Incentive (PLI) programme. Under this scheme, the government is giving interest subvention to the manufacturers to produce goods in India and the telecommunications sector happens to be one of the major sectors in that list. The aid of Rs 1.46 lakh crore would be futile, if the government increases the manufacturer’s costs on one side, and gives them benefit with the other hand. The scale would be balanced from both sides, thus not amounting to an actual benefit transfer to these manufacturers.

The Concerns of Smartphone and Other Manufacturers

Brands that are manufacturing smartphones, like Realme, Xiaomi and others, with a prominent market in India are already worried about their rising costs. The 5G modems are already expensive in the market and the support of more spectrum, such as available in the American handsets will further drive on costs if the telcos decide to rollout 5G in those spectrums. In such a circumstance, the addition of a 5Gi standard in the industry will be an additive burden on the backs of not only the telecom companies, but the other stakeholders. The question is relevant not only for the telecom industry but other manufacturers like chipset producers, handset manufacturers and telecom equipment vendors. With the changing geopolitical situation, India has an opportunity to give a base to manufacturers looking to shift away from China. While the PLI scheme is a big encouragement in this regard, the mandating of a 5Gi standard is going to be push in the opposite direction and not in the interest of the industry.

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