In our last post we talked about the Huawei ban and the impact it has on India and our national security agenda. The Huawei proceedings are a culmination of a series of political oppositions between states which have a profound impact on many countries, including our own. While the Huawei incident has been described as a next generation cold war that stems from political and economic considerations, it is catalysed by the struggle for technological superiority.
5G or the Fifth-Generation mobile network is the successor to the current 4G technology pervasive in present-day information and communication technology (ICT) infrastructure. While the range of use remains the same, with 5G technology also being used to make and receive calls and texts, and to get online, the scope is drastically different. 5G technology is much faster than 4G, allowing for data streaming almost 100 times faster than current 4G rates.
In addition to finally having lag-free Netflix for your commute, this technology is also essential in powering many essential emerging tech such as driverless cars, machine-to-machine communication, etc. The 5G spectrum is wider in nature, which allows for more devices to connect to the super-fast internet, allowing for the IOT (Internet of Things) and other allied technologies such as AI and to finally take off. The lower latency results in a more stable connection.
Current propagation of 5G
While USA won the 4G race being the first country to offer LTE network, it appears that it is lagging behind on the 5G front. 4G technology offered the US many macroeconomic opportunities, however, 5G is expected to provide more. An examination of the spending patterns of countries on research and development of 5G technology shows that many countries have outspent US in their pursuit for 5G, with China spending nearly USD 24 billion more and opening 350,000 new sites for development, as compared to the US’s 30,000. China’s five-year economic plan further indicates a planned USD 400 billion 5G related investment, which gives China a substantial advantage in the 5G race.
Countries have started the 5G roll out in phases across the globe, with South Korea’s SK telecom claiming to have rolled out the first commercial use of 5G in April 2019. China has issued licenses to three of its operators, who could start rolling out public use as early as this year. Currently it’s being tested across the country in various location before a full-scale release. In addition, many countries have started the process to adopt 5G. Despite the ban, Huawei has received commercial contracts from over 30 countries for installing 5G technology.
British telco EE network became the first to offer 5G network in the UK, beating its rival Vodafone by just a few months. 5G network is also live in some cities in the US, however many companies, like Verizon only offer a home-broadband version of it, not a commercial one available to the public at large.
5G in India
In order to implement 5G in India, the first step would be to examine and identify the correct bands which would be auctioned to the telecom providers. The telecom ministry is currently working on identifying these bands, and is expected to finish the process in time for India to roll out 5G along with the rest of the world. The delay in the allocation process can also partly be attributed to the elevation of the 5G issue to the Prime Minister’s Office due to Huawei’s involvement in the 5G trials and the subsequent allegations of security threats levelled against them. While the PMO did not decide to rule out Huawei completely, it has decided to approach a ‘wait and watch’ approach to the situation and see how other countries react to these allegations.
The auction is expected to be the largest so far, and could happen as early as September- October this year. The principal challenge to spectrum allocations is TRAI’s recommendation on 5G spectrum prices. The Indian telecom providers have compared the 5G spectrum valuation in South Korea, to that of India which is almost 7 times higher and have considered these prices to be unsustainable.
The current status of the auction remains uncertain, while the prices are considered to be prohibitively high, it cannot be ignored that this technology would also result in significant gains of market share to companies who are able to implement them in a timely fashion. The expected revenue from 5G is estimated to be about USD 1 trillion dollars, which is instrumental in helping India achieve its goal of becoming a USD 5 trillion dollar economy. Due to the potential economic benefits, 5G has made its way into the limelight for the present government.
Despite opposition from leading telecom players such as Vodafone, who have advocated for delaying auction of 5G to post 2020, citing the adequacy of current 4G technology for present day tech and IOT needs, the potential of India’s 5G market has attracted many big players. Korean telco Samsung visited India to engage in talks with Indian telecom marketers, including Reliance Jio about the supply of 5G network equipment. This visit was in light of the uncertainty caused by the US’ ban on Huawei, the largest telecom provider in the world.
In conclusion, we can see that while telecom operators are somewhat weary of the spectrum allocation, 5G is making its way to your smartphones, with or without Huawei. With the advances in data consumption and internet usage in the country, the 5G spectrum would be a boon for the tech industry allowing better internet for research into AI, machine-to-machine communication, and IoT. But most importantly, it means that we can look forward to lag-free Netflix in our near future.