Affordable 5G services to be rolled out by Oct 12: Centre

NEW DELHI: The government on Thursday said it expects 5G services to be rolled out in the country by October 12, and the Centre will make sure the prices are affordable for the consumers.

Union IT minister Ashwini Vaishnaw said that installations are being done and telecom operations are busy with the seamless rollout of 5G services. The government will ensure that the 5G plans remain affordable for the public, the minister said.

The government also introduced the “The Indian Telegraph Right of Way (Amendment) Rules, 2022” along with the launch of the 5G right of work (RoW) application Form on the GatiShakti Sanchar Portal.

The Indian Telegraph Right of Way (Amendment) Rules, 2022 will help the industry in faster proliferation of digital infrastructure, deployment of small cells, aerial fibre, and street furniture.

There is a provision for small cells, electric poles, access to street furniture, etc. introduced for the easy and smooth deployment of 5G networks.

The 5G services would be rolled out in a phased manner and during the first phase, 13 cities will get the 5G internet services.

The cities are Ahmedabad, Bengaluru, Chandigarh, Chennai, Delhi, Gandhinagar, Gurugram, Hyderabad, Jamnagar, Kolkata, Lucknow, Mumbai and Pune.

Just like 3G and 4G, telcos will soon announce dedicated 5G tariff plans and according to industry experts, consumers may pay more to access the 5G services on their devices.

Reliance Jio, Airtel and Vodafone Idea are currently tight-lipped, deliberating internally whether to opt for a substantial or a modest price hike for the end users, along with discussions on providing lucrative data bundling offers with smartphone makers when 5G roll out takes a better shape, according to sources.

However, the tariff plans will come down as usage increases, and more people embrace 5G networks especially in Metros where the initial demand will come.

An immediate tariff war with the launch of 5G is unlikely, but it “will be competitive as India continues to be a price-conscious market”. A recent report by Nomura Global Markets Research estimated that telecom service providers would have two options - either a modest 4 per cent incremental tariff hike on their overall subscriber base or a 30 per cent premium over 1.5 GB per day 4G plans.

“Historically, Indian telecom companies have refrained from charging a premium for 4G plans (vs 2G/3G data plans). With potentially higher speed on offer and likely initial uptake from premium customers (smartphones above Rs 15,000), there is a potential for telecom companies to charge a premium for 5G (vs 4G), in our view,” Nomura said in its report.

“5G tariff plans would be a key monitorable in the near term, and 5G premium (vs 4G) may provide the next leg of ARPU (average revenue per unit) uptick for the telecom companies,” it added.

Another report by Goldman Sachs Equity Research mentioned that 5G roll outs have not resulted in any “meaningful uptick in capex for telecom companies globally, and it foresees a similar trend in India”. Airtel CTO Randeep Sekhon said recently in reports that globally, there’s not a major difference between 5G and 4G tariffs.

“We expect 5G plans in India to be similar to 4G tariffs,” he had said.