KOLKATA: Top-end subscribers, a jump in network data traffic capacity to offer faster speeds and 5G<\/a>-based enterprise and fixed wireless access (FWA) services will drive the first wave of 5G monetisation in India, analysts said.
This is because there is no mass consumer-centric app right now for the next-generation wireless broadband service.
India’s top telcos will have a greater opportunity to acquire 5G users initially in Delhi, Hyderabad, Mumbai and Bengaluru – which collectively account for 35% of 5G-capable smartphones already in circulation in the country, they added.
Ahead of 5G rollouts, compatible handsets make up 30% of smartphone shipments and analysts estimate 5G-enabled phones to hit 250 million by FY25, from around 50 million currently. 5G will initially offer up to 30 times faster data speeds than 4G.
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Bharti Airtel<\/a> and Reliance Jio<\/a> Infocomm will launch their first wave of 5G services next month. Vodafone Idea<\/a> has not set a firm timeline as it has yet to raise fresh loans and finalise its 5G network<\/a> gear procurement contracts.
“5G in India will not be an instant phenomenon but will be value-accretive for operators as they ramp-up with the proliferation of 5G smartphones<\/a>… customer experience and service differentiation will be key success drivers,” global brokerage CLSA said in a note, which ET has reviewed.
The immediate 5G monetisation triggers for operators would be a pull for top-end subscribers, increase in network capacity to offer faster data speeds, 5G solutions for enterprise clients and 5G FWA services, it said.
The rapidly falling prices of 5G handsets worldwide would also improve the 5G business opportunity in India, it added.
While on-ground 5G network rollouts have yet to happen in India and actual demand for the next-gen services, coupled with the competitive dynamics between operators has yet to crystallize, telco Average Revenue Per User (ARPU) and subscriber retention are expected to improve for India’s top-two telcos Jio and Airtel<\/a> once 5G rollouts accelerate, analyst said.
Vi, the weakest private carrier financially, could suffer more revenue and subscriber market share losses if it is unable to catch up and roll out 5G networks<\/a> quickly, they added.
BofA Securities expects 5G to be an experiential service for the initial set of consumers across certain tariff plans.
It said monetisation would be gradual, led by higher per capita data consumption with the development of new use cases.
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