Indian Users Have Shown Most Interest to Pay Premium for 5G Services: Doug Suttles, CEO of Ookla

India’s government plans to allocate a wide band of 370 MHz of unpaired spectrum in the 3300 MHz – 3670 MHz range (C-Band), which will offer much greater capacity than the existing spectrum used for LTE services. Assuming that operators will receive sufficient spectrum, Ookla can benchmark future 5G performance against other Asia Pacific markets that have recently launched 5G, said Doug Suttles, CEO and Co-Founder, Ookla.

Highlights

  • In India, the majority (70%) of potential 5G early adopters expect higher speeds than 4G, with 60% awaiting pricing innovation from operators such as 5G data sharing between family members or across devices.
  • According to the GSMA, Indian operators' spectrum holdings are lower than those in comparable economies due to a high reserve pricing.
  • Ookla provides operators with the tools to analyze, optimize, and publicize their networks.

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Indian Users

The difference between 4G-LTE and 5G speeds was, on average, between 7-10 times faster. It’s impossible to say exactly how fast 5G will be for the average Indian user, given uncertainty over exact spectrum allocations and rollout plans (including the radio access network, but also improvements to backhaul and transport networks). However, it’s safe to say that 5G will bring a considerable bump to speeds in the country, said Doug Suttles, CEO and Co-Founder of Ookla.

1. Do You Think the Delay in Launching 5G Can Have Any Benefits for India?

There are some benefits related to the delay in India’s 5G launch. Namely, the cost of 5G hardware is decreasing as the technology and vendor ecosystem is maturing. Indian operators’ move to embrace Open RAN will drive network costs even lower. Another key factor is the 5G device ecosystem. 5G smartphone prices have already fallen since the technology launched. This trend will continue, spurred in India by partnerships such as Jio Platforms with Google. According to Counterpoint Research, by the end of 2022, 5G smartphones will account for almost 40% of all smartphones shipped in India. In time these numbers will translate into sales and installed base. Interestingly though, we’re already seeing a growing number of results from tests taken with Speedtest that are running on 5G-capable devices in the market. The Nokia MBiT Index confirms what we’re seeing here at Ookla, saying that there are already over ten million active 5G capable devices. This offers operators a good landing ground and existing customer base that they can target from day one of launch.

There’s also a large amount of work going on behind the scenes to help drive 5G commercialization once the spectrum becomes available. In May 2021, three operators (Jio, Airtel and Vi) were given permission to carry out non-commercial 5G trials utilizing spectrum in the mid-band (3.2 GHz-3.67 GHz), mmWave band (24.25 GHz-28.5 GHz), and the sub-1 GHz band (700 MHz), with a particular focus on developing India specific use cases.

All three operators have reported fast speeds. However, 5G isn’t just about the speeds. The additional time has also given operators the ability to formulate their strategy around 5G use cases and bring in an ecosystem of partners to deliver on that. For instance, Airtel rolled out #5GForBusiness to demonstrate 5G use cases for enterprises such as drone-based smart inventory, anomaly detection, connected ambulances, and surveillance. Airtel has also started to roll out 5G-ready network equipment, and Jio is testing its own 5G Open RAN solutions in several cities.

2. Compared to Other Countries, What Do You Think 5G Speeds in India Would Look Like?

One of the key benefits of 5G is that it can operate over a wider range of spectrum frequencies than LTE. There’s a total of 104,000 MHz spectrum for sale across low, mid and high bands.

India’s government plans to allocate a wide band of 370 MHz of unpaired spectrum in the 3300 MHz – 3670 MHz range (C-Band), which will offer much greater capacity than the existing spectrum used for LTE services. Assuming that operators will receive sufficient spectrum, Ookla can benchmark future 5G performance against other Asia Pacific markets that have recently launched 5G. Thailand and the Philippines both launched 5G in Q1 2020, while Indonesia launched 5G in Q2 2021.

The difference between 4G-LTE and 5G speeds was, on average, between 7-10 times faster. It’s impossible to say exactly how fast 5G will be for the average Indian user, given uncertainty over exact spectrum allocations and rollout plans (including the radio access network, but also improvements to backhaul and transport networks). However, it’s safe to say that 5G will bring a considerable bump to speeds in the country.

Examples from Speedtest Intelligence data: All data is from Q1 2022 (January 1st, 2022 - March 31st, 2022)

Philippines - Q1 2020 - 5G launch

Q1 2022 Data:
• Median 4G download speed of 15.53 Mbps
• Median 5G download speed - 163.51 Mbps
• Median 5G download speeds are 9.5 times than of 4G

Thailand - Q1 2020 5G launch

Q1 2022 Data:
• Median 4G download speed of 24.86 Mbps
• Median 5G download speed - 207.27 Mbps
• Median 5G download speeds are 7.3 times than of 4G

Indonesia - Q2 2021 5G launch

Q1 2022 Data:
• Median 4G download speed of 16.25 Mbps
• Median 5G download speed - 83.37 Mbps
• Median 5G download speeds are 5.1 times than of 4G

3. Will Consumers Be Interested in Buying 5G Plans When They Can Be Satisfied with a Good 4G Network?

For Indian consumers, 5G should represent a step-change in experience over current LTE networks, providing the bandwidth and latency to enjoy uninterrupted access to services such as high-definition video streaming, mobile gaming, and video calling on the go. This will be particularly important in mobile-first markets like India. In fact, Ericsson’s ConsumerLab study finds that 5G-ready smartphone users in India already spend more time on enhanced video and multiplayer mobile gaming, and gamers predict this to increase to 7.5-8 hours/week on XR apps by 2025.

In India, the majority (70%) of potential 5G early adopters expect higher speeds than 4G, with 60% awaiting pricing innovation from operators such as 5G data sharing between family members or across devices.

The study also shows that Indian users have shown the largest increase in their intention to upgrade and pay a premium for 5G services. 67% of users intend to upgrade to 5G once it's available, which is an increase of 14 percentage points over 2019.

On top of that, consumers in India are willing to pay 50% more for 5G plans with bundled digital services, compared to just a 10% premium for 5G connectivity. So, while consumers may be satisfied with a good 4G network, there are many reasons why there’s an interest in buying 5G plans in the market. It all depends on the wants and needs of the customer.

4. How Have the 4G Speeds Improved in the Country since the COVID-19 Pandemic Came?

Our data show a clear difference in 4G network performance between the two waves of Covid in India. During the first wave, operators had to respond to a massive shift in traffic – from urban commercial centers to outskirts and residential areas in cities and from urban to rural areas - as well as a growth in traffic due to the lockdown situation. On top of that, telecom operators had to contend with disrupted supply chains and an inability, in many instances, to physically deploy network components.

During the second wave of COVID-19 (Q1-Q2 2021), operators were better prepared. They were able to manage more of their network estates remotely but also increased their spectrum holdings across a variety of bands. We noticed that median download speeds in India increased from 8.52 Mbps in Q1 2020 (January 1st, 2020 - March 30th, 2020) to 10.44 Mbps in Q2 2021 (April 1st, 2021 - June 30th, 2021), while 4G Service (the % of an operator’s known locations where a device has access to 4G LTE service) hit 96.0% in the same quarter, up from 93.5% at the end of 2020.

5. Do You Think India Is Going in the Correct Direction with the Infrastructure Set up for 5G? There Have Been Concerns Around Less Fiberisation of Towers and Row Issues; What Are Your Views on That?

Indian networks rely heavily on terrestrial wireless backhaul solutions. While fiber penetration in backhaul networks is increasing, according to the DoT, just around 34% of mobile towers are connected with fiber. India’s not alone in facing this challenge. The GSMA estimates that while the global share of wireless backhaul is falling, it will still represent a majority (57.1%) of backhaul connections by 2025.

There are various challenges related to laying fiber, including access to the right of way, complex procedures, and availability of stable power. In October 2021, India's Department of Telecommunications (DoT) revised the Indian Telegraph Act Right of Way (RoW) rules, which makes it easier to install aerial optical fiber cable in the country. To circumvent digging into the streets to lay fiber, the idea of deploying overhead fiber on street furniture such as light poles and traffic lights has been put forward. Pilot projects are underway in a few locations, such as Delhi airport. TRAI has also published a consultation paper on using street furniture for small cell and aerial fiber deployment. The findings from the pilots will help to inform the regulatory and policy framework. This, in turn, will help operators in deploying the required infrastructure for the upcoming 5G rollout.

6. Is Private 5G for Enterprises Something That Ookla Would Stand Behind Because TRAI Certainly Does, What Are Your Views?

Ookla recently published an analysis on the case for private networks in India. Our view is that the recent recommendation from the Telecom Regulatory Authority of India around providing an enabling framework for enterprises to build their own private networks is in line with other 5G markets, where governments are looking to drive the digitization of key industries.

However, Indian operators see this as limiting their return on investment in the 5G spectrum. Looking at the example of private networks across Europe and Germany in particular, we believe that Indian telcos shouldn’t see TRAI’s proposal as a threat. Rather, they should use the buzz around the spectrum for verticals as a way to get enterprises interested in digitalization.

The key to unlocking this opportunity is leveraging existing credentials and forming partnerships to go beyond core competencies to open up new markets for operators. Partners’ ecosystem is key, and to be successful, operators need to partner across the ecosystem. As enterprises’ needs vary, having a broad portfolio of vendors that can address various verticals, technological, and coverage needs will only stimulate the growth of the market.

Indian telcos have already embarked on this journey. Airtel has partnered with Tech Mahindra for a joint 5G innovation lab to develop “Make in India” use cases for the local and global markets, including customized enterprise-grade private networks.

These services will combine Airtel’s integrated connectivity portfolio of 5G ready mobile network, fiber, SDWAN, and IoT along with Tech Mahindra’s SI capabilities. Meanwhile, Vodafone Idea joined forces with A5G Networks to enable industry 4.0 and smart mobile edge computing in India. They have jointly set up a pilot private network in Mumbai using the existing 4G spectrum.

7. Do You Agree With the Reserve Price Recommendations From TRAI?

According to the GSMA, Indian operators' spectrum holdings are lower than those in comparable economies due to a high reserve pricing. Affordable pricing is essential to stimulate network investments and cater to the socio-economic needs of the country. It’s not surprising that the affordability of the 5G spectrum is one of the key discussion points around 5G in India, especially since during the recent auction in March 2021, a large proportion (62%) of available spectrum remained unsold.

Following the consultation on the pricing of the spectrum and the methodology for determining the pricing, the Department of Telecommunications accepted TRAI’s recommendation to decrease the 5G spectrum reserve prices.

TRAI recommended a 36% cut in the reserve price for the prime 5G frequency of 3.3 to 3.67 GHz band for pan-India use. Our analyst team here at Ookla did some research, and the reduced reserve price is INR 3170 million ($41.31 million per MHz), which is still priced at a premium when compared to markets that have already auctioned a similar spectrum - for example, $23m per MHz in Italy, $10m in France, and $1m in Portugal. Mobile operators are requesting a further reduction in pricing to bring the spectrum pricing in line with other markets.

8. How Ookla Can Help Operators and Enterprises in Informed Business Decision Making While Also Improving Customer Experiences?

Ookla’s enterprise solutions support operators at every stage of the network lifecycle, from planning and building to testing and monitoring, to marketing the performance and availability of their networks to consumers. Combining billions of crowdsourced Speedtest measurements with controlled drive and walk testing, we help operators understand the performance, coverage, and quality of their networks — benchmarked against competitors over time.

With our Spatialbuzz platform, operators can improve customer experience by combining data from digital customer engagement with device radio measurements in order to prioritize network improvements where they matter most to consumers. By detecting areas of customer network issues, operators can focus efforts where they will directly improve customer satisfaction.

Ookla’s wildly popular Downdetector websites track consumer-reported issues with operators and other popular service providers in over 45 countries worldwide, including India. Downdetector Enterprise can help operators understand the scale, duration, and locations of a network outage or service issue — as well as provide insight into third-party issues that impact the customer network experience, such as when an OTT messaging app or social media platform goes down.

9. What Are Some of the Solutions That Ookla Has That Can Address Some of the Pressing Issues of Telcos Today?

Ookla provides operators with the tools to analyze, optimize, and publicize their networks. Drawn from billions of measurements from consumer devices, Speedtest Intelligence provides comprehensive insights on virtually every fixed and mobile network worldwide. With information on network performance, coverage, consumer sentiment, video experience, and competitive benchmarking, operators can compare network metrics by historical period, chipset, device, and other key variables.

Using Cell Analytics, operators can prioritize network improvements by analyzing where users are connected but receiving a poor signal. Operators can also benchmark network metrics against their competitors and monitor the status of 5G rollouts.

We’ve put together a report that looks at the use case where RAN engineers are using Cell Analytics data to prioritize engineering efforts and make no-cost or low-cost improvements to the network. In addition to crowdsourced network insights, we also provide operators with solutions for controlled network testing. Crowdsourced insights allow an operator to scan wide areas and then perform surgical testing with Ookla Wind, our handset-based testing solution for monitoring live events, 5G rollouts, and faster site verification.

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