The 5G logjam

Govt must sort out spectrum quality and fee issues

Verizon in the US and SK Telecom, KT and LG Uplus in South Korea launched their 5G services in the first week of April. While the debate over who among them was the first to launch 5G continues, South Korea, with one of the world’s top smartphone penetration rates, seems to have its nose ahead and is hoping that 5G deployment will spur breakthrough in fields such as smart cities and autonomous cars, and drive its economic growth. India, however, continues to be a long way off from all that, with the Department of Telecom (DoT) expecting the world’s second-largest telecom market to take another three years to begin 5G services. Even this rollout window looks over-ambitious, given the current dynamics of the sector. The National Digital Communications Policy, 2018, describes expansion of telecom services as an “essential connectivity infrastructure at par with others such as roadways, railways, waterways, airlines etc for the development of India”. But efforts on the ground have just not lived up to the promise.

For many of the other “connectivity infrastructure” sectors, the government has lent a helping hand. For example, subsidy has been offered for Udaan to connect low-density airports. For roads, the government acquires land on behalf of contractors. That generosity is, however, not uniformly available to all telecom companies. One of the major problems has been the high spectrum fees. The Telecom Regulatory Authority of India (Trai) has made it clear that the reserve price of the 5G airwaves will follow a steep pricing model. Since the telecom service companies are short of airwaves, the regulator seems to be certain that none of them can afford to miss the opportunity of buying fresh spectrum. But the regulator’s confidence is misplaced, going by the stretched balance sheet of all but one service provider.

The quality of spectrum is another bottleneck. According to “The State of LTE”, published by mobile analytics company OpenSignal, the average 4G speed in India is 6.07 mbps, which is the lowest among the 88 countries surveyed in the report. This means the Indian 4G subscriber gets a 2G speed service. The policy itself has recognised this as a challenge, and has promised to increase it to 50 mbps by 2022. The quarterly data set brought out by Trai on the performance indicators of the telecom service operators shows where the problem lies. It is the lack of investment by these companies to make even the existing ecosystem perform better.

The low capex, in turn, is a factor of the abysmally low average revenue per user, which, at Rs 70.13, in the third quarter of FY19 has dipped by 11.78 per cent year-on-year. That is hardly an ideal condition for more investments by telecom firms. At the receiving end, of course, are the consumers. Introducing 5G is not a choice; it is a necessity for quantum multiplication of communication possibilities. But the question Trai should be asked is why it still wants to squeeze the life out of the telecom services companies at a time when they are already on their knees. The new government would do well to recognise this before it begins the process of auctioning airwaves for rolling out 5G. Indians deserve a 5G service that is a video-grade network, instead of one that works on a 2G speed.