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The Department of Telecommunications (DoT)’s nod to conduct trials for fifth generation (5G) for six months in India is a move towards implementation of 5G in India over the medium term. However, there are still a lot of variables and unknows that need to be addressed for the successful implementation of 5G in India, says a research note.
In a report, India Ratings and Research (Ind-Ra) says, The reserve prices for 5G auctions are too high. Although the 5G auctions are not yet announced, the reserve price could yield a return on capital employed of only 7%.
Secondly, the number of users willing to switch to 5G from 4G or 2G and the incremental average revenue per user (ARPU) that they are willing to pay need to be watched out for. With the current ARPU ranging between Rs121 to Rs166 per user per month, and more than 350 million subscribers still using voice only or 2G services with significantly lower ARPU, the viability of 5G for the telcos remains to be seen. Thir