How 5G Will Boost The Indian Economy

India’s 5G journey has begun with a rollout in 13 cities. These include Bengaluru, Gurugram, Hyderabad, New Delhi, Pune, and Chandigarh amongst others.

A tad bit late to the 5G party, India will be able to draw significant economic benefits from the ushering of the services.

Put simply, 5G enables much higher speeds than 4G and low latency which are important in an age where artificial intelligence, the internet of things (IoT), metaverse, and other smart platforms are becoming common for individuals and enterprises.

The Indian market, even after the Jio revolution in 2017, is still in its adolescence.

Though smartphone connections, as a percentage of the total mobile connections, have increased from 40-odd per cent in 2017 to a little less than 90 per cent in 2022, the average revenue per subscriber (ARPU) is still under Rs. 200, almost one-fourth of what it is China, and lower than that in Russia, Brazil, Philippines, and Indonesia.

Even the EBITDA margins in India, between 2015 and 2019, were lower for India compared to the Asia Pacific. However, the numbers present an opportunity for service providers in India.

As per forecasts by GSMA, 5G penetration will increase from 2 to 4 per cent in 2023 to around 18 per cent in 2028, and from 60 per cent in 2033 to 90 per cent in 2040.

The 5G penetration will also be about making India a 2G-mukt economy, as Reliance Chairman Mukesh Ambani stated in the company’s AGM of 2021.

While 5G adoption steadily increases, driven by penetration and pricing factors, the real shift will happen as people shift from 2G and 3G to 4G. There are over 300 million users on 2G in India, even today.

For Jio, for instance, the obvious goal would be to stretch its subscriber base to 800 million 4G and 5G subscribers in the next five years. This would align with their goals for JioMart and other services including Jio Cinema, Jio Music, Jio TV, Jio HealthHub, Jio News, Reliance Digital, Jio Engage, Jio Cloud and Jio Switch, and eventually, the super-app Jio is working.

Even for other telecom operators, like Airtel, similar opportunities can emerge in the future.

In discarding the 2G and 3G era, the Indian economy will be in a position to house more unicorns who would be engaged in digital services. This also gives a significant boost to the hardware ecosystem (design, manufacturing, testing, sales, retail, etc) in India.

From a 5G perspective alone, other commercial options open up. The Prime Minister, addressing a gathering earlier this year, stated how $450 billion would be added to India’s economy in fifteen years.

The economic boost will be felt in manufacturing, information and communication, healthcare, retail, and agriculture among other sectors. The industrial applications include remote-controlled systems, industrial automation, remote monitoring and quality control, and automation in logistics within the warehouse.

In healthcare, 5G will play an important role in telemedicine, remote surgery, and even VR surgical tools and operations. It is expected that augmented reality tools will allow patients to share real-time health metrics with their doctors and hospitals, further enhancing the quality of treatment.

Similar features are already deployed in the developed markets with Apple Watch, for instance, where doctors can track blood pressure, oxygen levels, and other key metrics.

In rural areas, robotic surgery can be a game-changer. Eventually, the industries will also equip themselves with the prospects that open up with 5G.

However, for now, the government must look into the data protection bill, for in the next 10-15 years, unimaginable scales of data economy can be ushered.

A separate non-personal data protection bill becomes even more important now, for many enterprises, especially in the healthcare sector, can deploy data-backed solutions.

Furthermore, 5G only strengthens the case for data localisation.

5G, as both an enabler and a standalone offering, opens up India’s digital economy to a new avenue of opportunities.

The economic impact will be in billions, but the socio-economic impact will be worth trillions, and this is before operators in India begin looking at 6G trials a few years from now.