Manna for broadband, 5G’s promise of less than 1 ms latency and up to 10 Gbps speed, will
transform everyday living. However, a 5G reality will require fibre deployment in the country
to increase 2-3 times from the current 16-18 million fibre per km per year
The race for 5G’s global market debut has begun, with South Korea’s KT Telecom setting the stage for the first-ever official demonstration of 5G technology during the 2018 Pyeong Chang Olympics, Apple obtaining the Federal Communications Commission (FCC) approval to test 5G communications, and Verizon testing 5G networks across 11 cities in the U.S. In India, Nokia has recently signed anMoU with BSNL and Airtel to work on 5G technology
solutions, and Reliance Jio has tied up with Samsung to explore various
technologies and equipment for 5G. In the wake of growing awareness
around Internet of Things (IoT) and the use cases it presents to Indian
businesses and consumers, 5G will open a new era of opportunities for
telecom operators and ecosystem partners in the country. Though
it’s difficult to get an accurate estimate of the market size right
now,IoT is expected to provide
a $15 billion market opportunity for Indian businesses by 2020,
according to officials at Department of Telecom (DoT). Combine this
with the unprecedented growth in the number of smartphone users in
India, which is expected to overtake the U.S. in terms of smartphone
shipment by 2019. Analysts are optimistic that India will hold around
15% of the world’s smartphone market share by that period - Indian
consumers are ready for 5G.
Source: Ericsson Business Review: 74% of world’s top 100 operators interviewed by Ericsson were interested
in 5G and had plans in place for deployment
Roadblocks for Indian Operators
Indian operators, however, need
to address the issues surrounding
5G infrastructure and deployment.
Challenges involving regulatory
policies, investments and
infrastructure readiness need to be
addressed on priority.
Challenges ahead for telecom
operators in India are multi-fold
compared to their peers in the rest
of the world. Diverse geography,
disparate population and disparity
in economic distribution among
the rich and the poor pose serious
challenges to operators, preventing
uniform investments across different
telecom circles. Also, issues such
as Right of Way (RoW) have created
uncertainty in fibre investments
across different states. These apart,
the rising cost of air waves and the
challenges involved in migrating to
new technologies bring additional
challenges.
Moreover, the industry’s performance
on key indicators such as network
speed, coverage and customer
service is not satisfactory. For
example, average Internet speed in
India stands at 3.5 Mbps compared
to 29 Mbps in South Korea, 15 Mbps
in the U.S., and 4.3 in China (graph
below).
In this context, it is worth analysing
where telecom investments should be
directed to make commercial 5G a
reality in India by 2020.
Fibre to Drive 5G Rollouts
With a promise of 10 Gbps speed,
less than 1 ms latency and 90%
reduction in network energy
utilisation, 5G will spur the next round
of telecom infrastructure investments
across the globe, say experts. The
growth of 5G will be fuelled by the
sharp hike in consumer data and
the proliferation of IoT devices.
ITU estimates the market for IoT
devices will result in over USD 1.7
trillion in value added to the global
economy by 2019. In view of these
developments, ITU expects that
investments on fibre infrastructure
will surpass $ 144.2 billion during
2014 – 2019. The fact that 5G
network will have to support bursty
data from emerging applications
like Video on Demand (VoD), IoT,
Smart Cities, and the like also makes
backhaul a critical concern. In several
markets, operators are turning to
fibre backhaul as an alternative to
costly microwave technologies. Since
fibre is essential for both wireline and
wireless networks, investors show
greater levels of confidence in fibre
investment.
Fibre Investment: Where does
India stand?
A comparison of optical fibre
cable (OFC) rollout among the top
performing telecom markets shows
that the fibre kilometre (fkm) per
capita is much less in India compared
to several other key markets. For
example, fkm per capita for China
with 1.3 billion people is 0.87 whereas
that of India with 1.2 billion people
is just 0.09 (i.e. one-tenth of China
consumption). In developed markets
such as the US and Japan, the score
is 1.3 and higher (See graph below).
Preparing 5G Networks in
India
The latest Cisco VNI report estimates
that global IP traffic will grow at
a compound annual growth rate
(CAGR) of 23% from 2014 to 2019,
and reach 2 zettabyte per year
by 2019. Given this, operators
across the world are upgrading
their backhaul networks with fibre
technology. The fact that fibre-based
networks are capable of delivering
unlimited bandwidth makes them
a winning formula for telecom
investments.
Leading operators are now
mulling ways to reduce the capex
associated with fibre deployments.
Infrastructure sharing and leasing
are gaining popularity among
mobile and cable operators in
developing markets. In India, the
DoT’s amendment of unified license
scheme for active infrastructure
sharing and the revised public
private partnership (PPP) model
for BharatNet project adopted last
year are two timely steps to boost
the infrastructure sharing efforts by
operators. Combined with this, a
consensus on RoW is also expected
soon across all Indian states. A
unified RoW policy will pave way
for smooth fibre rollout, resulting in
faster service rendering.
To rise to the global standards and
solidify their stand in the country,
Indian operators need to pump
in more funds in optical fibre and
related technologies. With fibre
playing a pivotal role in improving
broadband connectivity and building
robust 4G/5G backhaul capabilities,
operators will find the investment
worth of a grab. As penetration
improves, they will be in a position
to lower tariffs and identify new
monetisation opportunities. ARPU
will improve, and the market will
stabilise gradually.
As the second largest telecom
market in the world, India promises
great potential for investors.
Industry watchdogs believe India
and China combined are capable
of transforming world’s telecom
landscape in the next decade.
Recent developments reveal that
Chinese operators and technology
vendors have come a long way in
5G tests and trials. Now, it’s the turn
of Indian operators to prove their
readiness to 5G.
This is an exciting time for India,
and the impact of 5G and its
associated enablement of M2M,
IoT, Autonomous driving and AR/VR
can be anticipated. Given the 5G
requirement for latency reduction
(from 50ms to 1 ms) and speed
from 100 Mbps to 10Gbps, the fibre
deployment in the country will need
to increase from current market
of 16-18 million fkm per year to at
least 2-3x per year. 5G will also
require a multi-fold increase in small
cells deployment, with each small
cell having backhaul on fibre. The
percentage of tower backhaul on
fibre for the operators will need to
increase significantly from 20% to
70-80% levels.
The current main drivers for the
increase in deployment lie in the
increased 4G deployments in Tier 1
and Tier 2 cities, increased Fibre-to-
the-Home (FTTH) deployments by
telecom operators, ISP’s and MSO
providers. For example, ACT has
recently launched 1Gbps broadband
service in Hyderabad, which 20x
faster than the market average of 50
Mbps. The other drivers for increase
in fibre demand include the rural
broadband project - BharatNet
and large connectivity projects by
the Defence. Lastly, optical fibre is
a critical component to make the
Smart Cities project a success.
Enabling early adoption of 5G,
Sterlite Tech is working closely
with key stakeholders - DOT, TRAI,
telecom operators, equipment
vendors and start-ups to enable 5G
deployments in the country. Sterlite
Tech is actively involved in 5G
readiness solutions, and, is a key
member of the Telecom Infra Project
(TIP) led by Facebook, to completely
transform telecom networks using
SDN/NFV and make them 5G ready.
Ankit Agarwal,
Head - Global Sales, Telecom Products,
Sterlite Technologies
 and the use cases it presents to Indian businesses and consumers, 5G will open a new era of opportunities for telecom operators and ecosystem partners in the country.', 'https://www.stl.tech/sterlite-live/blog_banners/59/medium/sterlite-opinion_(1)1668.jpg?1501219707', 'fibre-investments-key-to-success-of-5g-in-india.html')){kind=link}
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