5G to drive India’s mobile data revenue up to 67% by 2026: Report

The highly anticipated 5G spectrum auction in India is all set to begin on July 26, 2022, amid concerns around radiation levels and worries around higher airwave prices. According to a latest report by GlobalData, a data and analytics company, the next generation of mobile broadband will drive mobile data usage in the country by 29% and data revenue by 67% between 2020 and 2026.

As per the report, major telecom players in India—Airtel, Reliance Jio and Vodafone Idea—are keen to participate in the 5G spectrum auction to expand their service offerings and increase revenues. The government hopes to see 5G networks covering at least 20 towns and cities across the country by the end of 2022.

Priya Toppo, analyst in Thematic Intelligence team at GlobalData, says, “Airtel is already testing 5G equipment. However, questions remain over whether it can afford to build 5G meaningfully. Reliance Jio's massive financial resources and existing market position will likely allow it to gain a market-leading position. Vodafone Idea, on the other hand, is likely to struggle due to its weakening customer base and financial position.”

The report notes that as the majority of Indian consumers are still uncertain about the adoption of 5G, considering the imminent increase in data charges and smartphone prices, especially in rural regions, most of the mobile subscribers will still be using 4G services. As a result, GlobalData forecasts only 27% of the country’s mobile subscribers (around 329 million) will be using 5G services by 2026.

“Despite higher data prices, 5G promises superior service quality compared to the existing 4G networks. This should encourage digital businesses including edtech, healthtech, agritech, fintech, and e-commerce to further accelerate 5G adoption in India,” adds Toppo.

Earlier this month, the union cabinet gave approval to the much-awaited 5G spectrum auctions as well as to the development and setting up of private captive networks as part of its plan to roll out next-generation telecom services. The 5G services would be about 10 times faster than 4G. A total of 72,097.85 MHz of spectrum, with a validity period of 20 years, will be put to auction to be held by the end of July 2022. The auction will be held for spectrum in various low (600 MHz, 700 MHz, 800 MHz, 900 MHz, 1800 MHz, 2100 MHz, 2300 MHz), Mid (3300 MHz) and high (26 GHz) frequency bands.

According to domestic research firm ICICI Securities, the upcoming 5G spectrum auction will have a few incremental positives for major bidders -- Reliance Jio, Bharti Airtel, and Vodafone Idea -- such as the duration for spectrum usage, easy payment options, and private captive networks.

The agency says the duration of the right-to-use spectrum has been kept unchanged at 20 years, versus 30 years announced earlier. As per the report, telcos will spend ₹31,700 for 100MHz pan-India on 3300MHz band and ₹3,500 crore for 500 MHz on 26 GHz band. “This is broadly in-line with our estimates for Bharti and Reliance Jio (RJio)," it says.