New Delhi: Imagine a world where a truck carrying your e-commerce package is in touch with the warehouse real-time, the pattern of vehicular flows and traffic bottlenecks gets centralized at a data centre in the heart of the city, and your doctor can monitor a medical device in your body sitting miles away. This is a real picture of how drastically the world, as we know it, may change once 5G arrives.

Earlier this week, US telecom behemoth Verizon Communications Inc. created a milestone by rolling out what it claims to be the world’s first commercial 5G network in parts of Houston, Indianapolis, Los Angeles, and Sacramento. The promise is to deliver average data download speeds of 300Mbps (roughly 50 times faster than Indian 4G). Verizon’s network, however, is temporary given that global 5G standards have not been finalized by the industry body and the equipment would later have to be made compatible with whatever turns out to be the standard.

“We’re not just waiting for the future, we’re building it," Ronan Dunne, executive vice-president and group president of Verizon Wireless, told Fortune after the launch, explaining why the firm went ahead with non-standard gear, despite the fact that the first 5G-compatible smartphone won’t hit the market until early next year.

2G gave consumers voice calling and text messaging. 3G paved the way for using the internet on the mobile phone, enabling picture-sharing and Bluetooth. The most recent 4G technology revolutionized the app and content ecosystem, since broadband speeds on a mobile phone gave a fillip to not just social media and video streaming, but also made ordering food or a taxi through a few clicks on an app that much easier. These past revolutions were all, however, restricted to mobile phone users. 5G, the much-awaited next-generation communications technology, will bring even faster download speeds to a mobile phone, but this is just the tip of the iceberg.

“Simply put, 5G means that the network will be ready for millions of devices and not just the smartphone in your hand," said Bhaskar Ramamurthi, who helms the Centre of Excellence in Wireless Technology at IIT Madras. “Today, through their smartphone, consumers can decide which restaurant is nice and where they want to eat, but 5G will usher in internet of things (IoT), which will enable much more intelligence in the system along with higher data speeds," he added.

5G will connect people to everything. And thus, become the next frontier in machine-to-machine communication. It will make possible secure connectivity between devices other than smartphones, such as sensors, vehicles, robots, and drones. That potentially opens the possibility of industry-altering changes in sectors ranging from agriculture and healthcare to manufacturing and warehousing.

How will that happen? Fundamentally, 5G has distinctive properties which score over previous technologies—low latency and high throughput. What does that mean? Latency is the time it takes for data to move from one point to another over a network. 5G can offer a minimum of 1 millisecond of latency, ushering in ultra-reliable communication, compared to 4G where latency is 50 milliseconds. This decrease in latency will make possible use-cases such as autonomous cars and remote surgeries. High throughput would enable infinitely large amounts of data flowing on the network.

When 3G and 4G initially arrived on the scene, India was largely a telecom backwater and missed the bus by a mile. The question is: will things be any different this time? With the pile-up of debts and narrowing profit margins since the launch of Reliance Jio, the Indian telecom dream has soured at least for some players. It is at this juncture that the International Telecommunication Union is expected to firm up the appropriate spectrum bands and standards, in consultation with industry-body 3GPP (3rd Generation Partnership Project), for the rollout of 5G, latest by October 2019. Many eyes will be on how India moves forward. The rest of the world isn’t waiting, however.

Global progress

There is a global race on to take the lead in 5G. China’s ministry of industry and information technology has issued a frequency plan for the 3300–3400MHz, 3400–3600MHz, and 4800–5000MHz bands. Japan has declared that the official 5G bands are 3700MHz, 4500MHz, and 28GHz.

In Europe, considerable 5G preparatory work has focused on the 3400–3800MHz spectrum range. Australian Communications and Media Authority will auction the 3600MHz band for 5G use in October 2018. The US has also marched ahead. Ireland, Czech Republic, the UK and most recently South Korea have already completed auctions for 5G bands. In fact, South Korea demonstrated its intention to lead the world in 5G during the recent Winter Olympics at Pyeongchang, where spectators used test phones in the arena to enjoy ‘immersive broadcasting’ using 5G-powered gadgets like cameras, communication equipment, and sensors, which were attached to sportspersons and their gear.

Simply put, 5G means that the network will be ready for millions of devices and not just the smartphone in your hand- Bhaskar Ramamurthi , head Centre of Excellence in Wireless Technology at IIT Madras

5G is also expected to usher in huge business for original equipment makers such as Nokia, which sees a strong initial appetite for 5G in the US, China, South Korea, and Japan, with an acceleration of trials in the fag-end of 2018. “The company has 50-plus trials already ongoing globally," said Amit Marwah, head of marketing and corporate affairs, Nokia India.

“In fact, Nokia has announced a $3.5 billion multi-year 5G network agreement with T-Mobile. It is also working with China Mobile to set up a joint AI-5G lab for further research using artificial intelligence (AI) and machine learning (ML) in 5G networks."

Huawei expects 5G to go commercial in some countries by 2019. “Globally, we are working with partners across the spectrum from the transport industry—carmakers, drone makers—to medical care, power, infrastructure and many more," a spokesperson for Huawei India said.

Ericsson, too, which is working with 39 telecom operators globally, has signed a $3.5 billion multi-year deal to support T-Mobile US’ 5G network deployment. The Swedish telecom gear maker has also signed a memorandum of understanding (MoU) with IIT Delhi in 2017 to launch a ‘5G for India’ programme by setting up a Center of Excellence and Innovation Lab, wherein Ericsson expects young minds from IITs and other educational institutes to show some interest in developing India-specific 5G applications for sectors such as healthcare and sports to start with.

“The company (Ericsson) has recently set up a new 5G speed world record," said Nitin Bansal, head of network solutions for South-East Asia, Oceania and India. “In partnership with SK (South Korea) Telecom and BMW Korea, Ericsson used advanced 5G technology to track a connected car travelling at 170km/hour to demonstrate data transmission speeds on a 5G network," he said.

India’s way ahead

As other countries move ahead, the Indian government too has repeatedly stated its intention to ‘not miss the 5G bus’ and ensure rollout by 2020, after having missed the ‘2G, 3G and 4G buses’. A closer look, however, is required with regard to the preparedness of the industry, especially given the financial health of the telecom sector, the hesitancy among domestic banks to lend to operators, and the current pressure on tariffs.

Indian spectrum is also rather expensive. The Indian telecom regulator has recommended auctioning 20MHz blocks in the 3,300-3,600MHz band for 5G services at a price of ₹ 492 crore per MHz. In South Korea, the same band was priced at roughly ₹ 131 crore per MHz in auctions held in June.

We think the (spectrum) auction should be held as close to 2020 as possible as there will be more clarity on 5G standards- Rajan Mathews, director general of Cellular Operations Association of India

In order to set a roadmap for the rollout of 5G, the government had in September last year set up a high-level forum, which in its report suggested early allocation of 5G spectrum, increasing the quantum of spectrum available, and lower spectrum pricing.

The panel has also suggested three initiatives—attract global 5G conference events to India, set up national 5G events, and the creation of a comprehensive programme to develop India-specific 5G applications.

As far as budgetary provisions are concerned, 5G applications and software will require some form of initial funding by the government. The committee has recommended a broad planning estimate of ₹ 300 crore in the first year, ₹ 400 crore in the second, ₹ 500 crore in the third and ₹ 400 crore in the fourth year.

By acting early on adoption, India can accelerate the 5G dividend and also become an innovator in applications, but it would also mean that the initial investment on equipment will be more expensive when trying to be ahead of the curve. The government has already started the process to invite global telecom gear makers to conduct trials in India.

Challenges

The Cellular Operators Association of India, on its part, believes that India should not rush to sell spectrum for 5G. “We think the auction should be held as close to 2020 as possible as there will be more clarity on the standards for 5G," Rajan Mathews, director general of COAI, said. There is also uncertainty about the financial health of the industry, which ultimately has to bid for the spectrum on which 5G data will flow, since revenues of all the operators has declined after the entry of Reliance Jio in September 2016. After all, huge investments would be required to update the telecom backbone and airwaves to 5G.

“Timing is a crucial criterion (for 5G auction)," a senior Department of Telecom (DoT) official said requesting anonymity. “Where is the money? Where is the ecosystem for the 3300-3600MHz band? There is nothing to show that a spectrum auction is going to be successful. The operators won’t pay a single paisa over reserve price (suggested by the Telecom Regulatory Authority of India)," the official added.

Spectrum auction is a major source of revenue for the exchequer. There was no auction in 2017-18, while in 2016-17 the government had raised ₹ 65,789 crore through spectrum sale, a mere fraction of the ₹ 5.63 trillion worth of spectrum it had put up for sale.

“Moreover, operators have invested huge amounts of money in 4G very recently. Banks are not willing to lend. Also, are we ready to use 5G? What percentage of India’s population requires 5G?" the official cited above said.

Indian telecom operators don’t seem to be in a hurry to move to 5G when 4G deployments are still at a nascent stage. “If there were any spectrum auctions over the next two years, we believe participation will be restricted to Bharti (Airtel) and Jio only," HSBC Global Research said in a note dated 31 August. “Vodafone India and Idea, in the next two years, are likely to focus more on working out spectrum synergies and unlikely to add more spectrum," the note said.

The government, as of now, is looking at auctions probably in the second half of 2019, telecom secretary Aruna Sundararajan had told PTI on 23 September. However, before the auction, DoT wants to provide a one-year window for trials to happen with experimental spectrum. 5G will also require a massive level of transformation and Indian telecom operators need to develop that capability in the form of skills, competence and operating models beyond the investments which are required.

“Telecom operators need cloud infrastructure, distributed network architecture, and an agile operating model to successfully operate a 5G network. As such, what is the rush for 5G when we lack the business case to justify the investment and there is also a competing need to stabilize and enhance our 4G networks," said Amresh Nandan, research vice-president, Gartner.

While the industry may not be ready to brace for 5G, India’s dependence on this technology is huge, given the set of promises made by the current government. “The government perspective is that 5G is going to be absolutely critical in India... For instance, if we look at the JAM (Jan Dhan-Aadhaar-Mobile) programme, the formalization of large parts of the economy, transforming agriculture, getting healthcare—all these are priorities of the government," another senior DoT official said requesting anonymity. “If we are not able to get 5G out, we may not be able to deliver on a lot of these things (services) especially to the rural population," the official added.

The good news, however, is that the latest entrant, Reliance Jio, already has an IP-ready network. 5G will be relatively easy to roll out for Jio because the company has next-generation architecture already in place. Consequently, to stay in the game, rivals Vodafone Idea and Airtel will also need to invest significantly.

The bigger issue is whether the related ancillary industries are ready.

Apart from the spectrum, a 5G-ready country needs a slew of players to provide a service platform, delivery model, logistics support, and several other niche services. From that standpoint, the conversation on 5G in India has not even begun.

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