Thursday, December 8, 2022
HomeTechnology5G, capex increase, satellite likely to dominate in India in 2022

5G, capex increase, satellite likely to dominate in India in 2022

The big story in India of 2022 is likely to be about the impact of two major happenings of 2021: telecom reforms and the tariff hike announced by all major telcos.

Added to this, the evolving satellite ecosystem, the 5G spectrum auction and the launch and digitization of the communications network could dominate the year ahead.

5G (again)

We didn’t think we would still be discussing this at the end of 2021. But after umpteen delays, the 5G launch simply never happened.

Even so, some recent events indicate that India will witness the much-anticipated launch of 5G services in 2022.

Why do we think so? To begin with, the Department of Telecommunications (DoT) has started to make efforts to bring down the reserve price of the 5G spectrum.

Look up: Satellite services are likely to be a big story in India in 2022.   (Source: NASA)

Look up: Satellite services are likely to be a big story in India in 2022.
(Source: NASA)

This was a key bottleneck, and all the major telcos had raised concerns about it. Once this is addressed, the 5G movement is likely to gather pace in India. This will also ensure that service providers participate in the upcoming auctions.

Secondly, service providers are in the midst of conducting trials of 5G technology and use cases, and will be better placed to launch services in 2022. This is in line with internal timelines held by the operators.

Bharti Airtel, India’s second-largest service provider, has said on several occasions that it believes that the 5G ecosystem will develop only by 2021-22. All this means that the groundwork is finally laid out for the 5G spectrum auction and the subsequent launch of services in 2022.

Better profitability = capex increase

With telcos increasing the prepaid tariff in 2021, the average revenue per user (ARPU) is set to improve, ensuring better profitability for all service providers.

One of the measures announced by the government was deferred payment on adjusted gross revenue (AGR) and no spectrum charges. This, coupled with improved ARPU, will lead to better margins and profitability for service providers.

Interested in India? Check out our dedicated content channel here on Light Reading.

Rising data consumption coupled with a growing 4G subscriber base, and the upcoming 5G era, mean telcos will need to spend more on network expansion and modernization.

The coming year will see an increase in capex spending for most telcos. This is also because of growing profitability and reduced pressure to make payments to the government for pending dues. Consequently, hiring is also likely to pick up.

Is it going to be a 2G-mukt Bharat (2G-free India) in 2022?

With more than 300 million 2G subscribers, telcos are under pressure to upgrade them to 4G as soon as possible to prevent churn in their subscriber base. While it is unlikely to happen entirely in 2022, the telcos will continue to make an effort to move their 2G subscribers to 4G.

The movement of subscribers from 2G to 4G is also happening organically because the growing digital ecosystem is pushing the subscribers toward 4G, and this is likely to gather pace. The 4G subscriber base in India is expected to cross 800 million by March 2022, according to Crisil.

Satellite gazing

India’s satellite communications scene is buzzing with activity with the presence of Elon Musk’s SpaceX, Amazon’s Project Kuiper and Bharti’s OneWeb.

With Starlink’s SpaceX likely to start offering services in 2022, the sector will likely get an upswing. OneWeb is also aiming to launch services by May 2022 in India. The year 2022 will also see several policy-related decisions in this space.

Related posts:

— Gagandeep Kaur, contributing editor, special to Light Reading



Please enter your comment!
Please enter your name here

Most Popular

Recent Comments