5G launch: Impact on economy could be $1 trillion by 2035

Over the past 10 years cellular communications technologies have transformed the lives of ordinary Indians. Faster internet speeds at dirt cheap rates might be burning a hole in the balance sheets of telecom majors, but for millions of ordinary Indians, it has made their smartphones into entertainment powerhouses.

So, what will 5G bring to the table?

According to a steering committee constituted under the chairmanship of A J Paulraj, Professor, Stanford University, the technology could help India overcome traditional barriers to development, and add no less than $1 trillion to the economy by 2035.

The committee, set up to articulate the vision for 5G in India and recommend policy changes, on Thursday submitted its report titled 'Making India 5G Ready' to the Department of Telecom.

“5G is the next generation of cellular communications technology with evolutionary and revolutionary services that can have a deep impact on India. 5G can unleash new economic opportunities and societal benefits, giving it the potential for being a transformational force for Indian society. The cumulative economic impact of 5G on India can reach $1 trillion by 2035,” the report stated.

The report even suggests that 5G can create a ‘revolutionary class of applications’ across completely new sectors of the economy. “5G will enable both existing and new wireless service providers to develop novel business models to offer innovative applications to individuals and to different economic verticals from industrial, commercial, educational, health care, agricultural, financial and social sectors,” the report added.

All of these benefits though will only accrue to the Indian economy once 5G is deployed by service providers and that still needs a lot more work.

The committee has also suggested several changes to the spectrum policy. One of the key recommendations in this regard is for opening up of additional airwave bands to support 5G. The committee also suggested that free bandwidth be assigned only for trials for a fixed timeframe to allow for better preparation of 5G roll-out. It suggests that the government should come out with a new spectrum policy by December this year along with the necessary notifications. Further, it also suggests that the government should set up a standing committee with a five-year term to advice the government on building of spectrum technology infrastructure.

On the regulatory front, the committee suggested that the government come out with most guidelines on regulatory matters by March 2019, to facilitate early deployment of 5G. The committee recognised that 5G would require massive addition of above and below ground infrastructure. With 5G infrastructure on ground likely to exceed 1,000 base stations per sq km, the committee suggested that the Department of Telecommunications create strict guidelines for the state and local governments in issuing clearances.

The committee expects that over the next 5-7 years, India will need to make investments of over $100 billion for a nationwide 5G infrastructure. Therefore, it suggests that the Department of Telecommunications guidelines on the regulatory policy should address the aspect of infrastructure sharing and provide some sort of financial support.

Interestingly, the committee also recommended the setting up of 5G use case labs within each economic vertical of a ministry and private or public sector industries. Priority should be given to agriculture, health care, banking and railways, followed by other sectors in the next phase.

So, will 5G revolutionise India? Perhaps it will. But don’t hold your breath for it.