Indians Ready to Pay More than 50% Premium for 5G Services: Ericsson

Most enterprises down the road will need to have broader coverage than only at their own facility. So, a link between an enterprise network and a macro network will be necessary. Also, given that spectrum is a scarce resource - the more it is fragmented, the less likely it is to achieve national coverage, said, Nitin Bansal, Managing Director, India Head-Networks, Market Area South East Asia, Oceania and India at Ericsson, told TelecomTalk.

Highlights

  • Ericsson has worked on use cases in numerous industries in Asia, Europe, Northern America and have been supporting operators across the world to roll out 5G.
  • From a consumer perspective, enhanced mobile broadband (eMBB) and fixed wireless access (FWA) will be the early 5G use cases in the country.
  • Ericsson has been working closely with all Indian operators, and with 5G spectrum auctions expected to happen soon, we continue to engage with them on their network evolution plans.

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Ericsson has worked on use cases in numerous industries in Asia, Europe, Northern America and has been supporting operators across the world to roll out 5G. In India, we have been working with the telecom companies as well as the academic community to develop and test various 5G use cases which are relevant to the country; Nitin Bansal, Managing Director, India Head-Networks, Market Area South East Asia, Oceania and India at Ericsson, told TelecomTalk.

What kind of opportunities does 5G hold for Indian consumers? What kind of services are consumers most excited for?

From a consumer perspective, enhanced mobile broadband (eMBB) and fixed wireless access (FWA) will be the early 5G use cases in the country. These will help address the concern of limited fixed broadband penetration levels in India and improve the data experience for consumers while on the move. In its initial stages, 5G will help communications service providers to address the growing data needs of consumers more efficiently, overall providing an improved consumer experience. According to Ericsson’s study, evolution to 5G will enable ten times lower cost per gigabyte than current 4G.

With its ultra-low latency, increased capacity, and enhanced security, 5G will open new possibilities for consumers. They will be able to watch 4K video on a smartphone, use AR/VR as well as mobile gaming applications and many more immersive experiences. Some use cases that consumers are excited about are:

  • Cloud Gaming: Globally, 5G ready users are already spending more time on multiplayer mobile gaming and video content, spending 1.5 hours more per week on enhanced video and 1 hour more per week on multiplayer online games as compared to what the 4G users are doing. From an India perspective, 60 per cent of the smartphone users plan to use XR applications over the 5G network on a regular basis in 5 years’ time and will spend 7.5-8 hours per week.
  • Live Sports: 5G enabled sports is amongst the top predicted revenue growing factors. A user or a spectator will be able to get an even better immersive experience with 5G-powered stadiums, 5G enabled cameras, 5G network slicing, and virtual transmission centres.
  • Enhanced Video: In this era of binge-watching, video content is the most significant traffic type generated by smartphone users. The rapid increase in data traffic for video is a result of increasing video formats/content and high viewing time. The need for low latency will be even more crucial with AR/VR entering the market for consumers to have a captivating experience. 5G will be able to address this easily.

How soon are Indian consumers willing to shift to 5G with its arrival? Are we ready to pay a premium for 5G services?

Ericsson sees high interest for 5G in the country, with consumers willing to pay a premium for new 5G capabilities. As per our ConsumerLab study – at least 40 million smartphone users in India might take up 5G in the initial year of the technology being made available. Consumers are even ready to pay 50 per cent more for the 5G plans which come with bundled digital services, compared to just a 10 per cent premium for 5G connectivity.

7 in 10 potential early adopters of 5G in India expect higher speeds than 4G, while 6 in 10 expect pricing innovation from operators like 5G data sharing between family members or across devices. Furthermore, Indian users have shown the biggest rise in their intention to upgrade, with over 67% of people wanting to take up 5G once it is available, an increase of 14 percentage points over 2019.

The Ericsson Mobility Report (Nov 2021) reveals that 5G will represent around 39% of mobile subscriptions in India at the end of 2027, which is estimated to be around 500 million subscriptions.

How is Ericsson enabling telecom operators to win in the eyes of the consumers?

Ericsson has been collaborating with leading service providers worldwide, more than 40 universities and technology institutes and 30 industry partners. We have worked on use cases in numerous industries in Asia, Europe, Northern America and have been supporting operators across the world to roll out 5G. In India, we have been working with the telecom companies as well as the academic community to develop and test various 5G use cases which are relevant to the country.

We are collaborating with our customer partners for 5G trials in the country. The various trials conducted successfully have set the stage for the rollout of 5G services in the country. To that effect, in 2021, Ericsson and Bharti Airtel displayed India’s first 5G live network in Hyderabad, along with trials in Manesar and Gurugram. This was followed by a display of India’s first 5G rural trial in Bhaipur Bramanan village on the outskirts of Delhi/NCR. Note that Ericsson also partnered with Vodafone Idea to showcase the power of 5G to reach healthcare to remote parts of the country. The telco demonstrated blazing speeds of 4 Gbps in November last year as part of the trial.

Ericsson has also launched advanced products for customers, such as an intelligent automation platform, time-critical communication for real-time 5G experiences, 5G RAN slicing solution to support end-to-end network slicing. Most recently, Ericsson launched one radio, 4490- a dual-band radio that delivers 25 per cent lower power consumption and lesser weight compared to the current product.

Ericsson has been working closely with all Indian operators, and with 5G spectrum auctions expected to happen soon, we continue to engage with them on their network evolution plans. Our hardware has been 5G ready since 2015, and Indian telecom operators can switch to 5G with just a remote software installation.

What has been Ericsson’s global experience in deploying 5G across the world? What has been the consumers’ response?

Having deployed 121 live 5G networks globally, Ericsson is well-positioned to help the Indian operators seamlessly evolve from 4G to 5G. Some of the global use cases that Ericsson is deploying across other markets can be adapted and introduced in India.

We are seeing rapid adoption of 5G in markets where it is live. In 2019, Ericsson partnered with SK Telecom, the largest mobile operator in South Korea with nearly 50 per cent of the market share, to switch on its commercial 5G network in the world’s fastest-growing 5G market. South Korea has been able to add ten million+ 5G subscribers of the 70 million users in total.

We also partnered with Telstra, Australia’s largest mobile network provider, in the same year to roll out and activate 5G in over ten cities. Early users were able to experience better network coverage even in over-populated and underground areas, while advanced technologies such as VR and AT are being utilised for diverse use cases powered by the speed and low latency of 5G.

What are your views on the recent TRAI recommendations for the spectrum?

We welcome the reduction of the spectrum prices by 35-40%. Since 5G would require a lot of spectrum, it is critical that a large contiguous spectrum across all bands, including backhaul spectrum like the E band, is made available to operators at affordable prices to ensure smooth deployment of 5G.

Do you think allowing private enterprise networks is a business loss for the telcos?

Most enterprises down the road will need to have broader coverage than only at their own facility. So, a link between an enterprise network and a macro network will be necessary. Also, given that spectrum is a scarce resource – the more it is fragmented, the less likely it is to achieve national coverage.

So, it is a trade-off here between getting national coverage and enterprise applications. Overall, if company networks are excluded from the macro network, it will lower the investment ambition of the macro network operator. We have seen that in some countries where the spectrum has been allocated to enterprises, the uptake has been relatively modest. Instead, the macro-operator can give a network slice to an enterprise.

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