Indian Economy News

5G can reduce data cost for telcos substantially: Huawei

New Delhi: With preparations on for the commercial roll-out in the telecom sector of fifth-generation technology (5G) by 2020, data prices are likely to drop quite substantially.

Beside people-to-people communication, it will expand applications to connect things (the internet of things) and address vertical businesses. Chinese network gear maker Huawei Technologies says the early stage of 5G roll-out will see a boost in internet connectivity, at a much more affordable price.

“We believe that 5G, once commercially rolled out, can help operators reduce the cost of data production to a tenth of the current cost, depending upon fulfillment of conditions like carrier bandwidth and use of cutting-edge technologies like Massive MIMO,” Emmanuel Coelho Alves, wireless marketing director at Huawei, told Business Standard.

Data prices in India are already among the lowest in the world, thanks to Reliance Jio, which disrupted the market last year with its roll-out of 4G services. Jio offered data at extremely cheap prices and incumbent operators had to follow. However, in doing so, the latter suffered revenue losses. With 5G, the cost of data production will reduce for operators, hopefully also allowing them to be profitable while giving data at cheaper rates.

Alves said preparation for 5G network infrastructure had already begun in the 4G era. “What we predict is that, depending upon the business plan of operators, on whether they go for standalone or non-standalone networks, they can continue with their current level of investment to enhance the existing network infrastructure and be future-ready.”

Mobile operators are investing a combined Rs 50,000-60,000 crore annually on hard infrastructure, primarily in building their 4G network.

The 5G technology, says Huawei, will be cost-effective owing to factors like economies of scale; it should also reduce the total cost of ownership for stakeholders. “5G will also simultaneously contribute towards delivering enhanced service experience for consumers, at a lower cost.”

The government wishes India to be a frontrunner in 5G. It is working to create a Rs 500-crore fund for development of the technology and also created a high-level committee to work on a road map for roll-out of 5G by 2020. It is looking at 5G technology as a major opportunity in terms of offering services tailored for rural India, such as tele-health, tele-education and bandwidth-heavy applications that can drive development. And, to allow domestic businesses to reach out to global markets and consumers to gain with the economics of scale.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.