What are 5G Networks?

When 5G mobile networks come to India, they will use a new radio technology and a different network architecture to deliver higher bandwidth and lower latency than 4G (LTE) and 3G networks we have today. 5G promises peak data speeds of up to 10 Gbps – up to 100 times faster than the 100 Mbps of 4G. Latency, a measure of the time it takes data to travel from the phone to the distant server, could be less than a millisecond in 5G networks, or 60-120 times better than 4G

·        *  Digital networks would need expansion to connect half of world’s population

·         * Nearly half of the world still remains un-connected in 2020

·        *  India still needs to connect 55% of its population

·         * Significant investment in digital network quality is required to support new applications

·         * 1.8 bn connections of 5G needed by 2025 for 20% penetration

·         * The digital network will need to reach everyone at scale and quality

·         * 4-5X Internet Mobile traffic more digital kilometres more digital lanes - With high capacity fibre cables, 5G

·         * Millions of new users - more digital kilometres - Connect every home, every enterprise

·         * 3X Mobile Data speeds – superior speeds, response – Using software to manage network traffic (copper + wireless --à Fibre)

All Network Creators Investing Heavily in Digital Infrastructure

·         * May 2020 - China mobile to invest $14 Bn in building digital infrastructure enabling faster 5G Connectivity

·         * May 2020 - BT to invest $12 Bn in building 5G and next generation full fibre broadband across the UK

·         * March 2020 - Verizon to invest $18.5 Bn to accelerate its 5G plans globally

·         * June 2020 - Airtel to double its fixed line penetration in next three years

Cloud Companies

·         * May 2020 - Microsoft to invest $15 Bn to accelerate digital transformation in Italy including its first data center region.

·         * March 2020 - Google to invest $10 Bn in US offices and data centres in 2020 - Sets up a us $10 billion for India

Large Enterprises

·      * Enterprise spectrum sees huge demand in US, UK, Germany.

·     *  Many companies have applied to set up local 5G networks.

Citizen Networks

·         * Indian Govt. aims to provide 5,00,000 FTTH connections by Sept 2020 (part of BharatNet) FCC, US launched rural digital opportunity fund worth $20 bn.

PE Investment

·         * KKR in partnership with Telecom Italia to invest $7-8 Bn in Open Fibre deal.

       * EQT in partnership with OMERS to invest $4 Bn to acquire a fibre optic internet access company in Germany.

5G Network Rollouts Have Accelerated

Telcos continue to be bullish about 5G spend

·         * T-Mobile, US announced plans to spend $ 60 bn. on deploying 5G networks over the next 5 years

·        *  Chinese telecom companies have announced massive tenders for 5G rollouts in this Quarter (~ 10bn USD)

·        *  As of May 2020, there are approx. 300 operators investing in 5G commercial services

5G Rollouts have accelerated

·         * 11 operators have launched 5G in 2020 (till May).

·         * Bell Canada launched 5G in June.

·         * T-Mobile, Poland and Three, Sweden launched 5G in June.

·         * In HongKong, 3 operators have rolled out 5G post April 2020.

Customers are adopting 5G at unprecedented rates

·        *  Deutsche Telekom has reached 16 mn subscribers.

·        * Chinese Telecom Companies added 22mn 5G subscribers in 1 month (June 2020).

·        * South Korea has added more than half a million 5G subs in 1 month (May 2020).

Currenly, 5G is launched in few countries and under testing in many countries. According OpenSignal survey, US and Switzerland top the chart in 5G speed. U.S. users with 1,816 Mbps 5G speed which 2.7 times as fast as 4G users’ fastest speed. Switzerland came to the 2nd place with its early 5G adopters seeing speeds up to 1,145 Mbps which is 2.6 times fast than regular 4G users. Recently many smartphones makers has launched their 5G devices which are quite expensive.

How are Indian operators preparing for 5G

Reliance Jio launched its 4G service in 2016, skipping over the 2G and 3G technologies offered by rivals Airtel, Vodafone Idea and BSNL. Now it’s counting on its modern network infrastructure to make it one of the first to offer 5G service. Jio has the network and backhaul in place, needing only to invest in spectrum and equipment. Jio is also the only operator with an all-IP network, an important requirement for launching 5G services. It will conduct 5G trials with Samsung, the supplier of its 4G network, and has said it will extend its partnerships for 5G trials to include Huawei, Ericsson, and Nokia.

In July 2020, Google said it would invest Rs 33,737 crore  (USD 4.5 billion) in Jio to support the operator’s upgrade. Jio also has support from Qualcomm and Intel for its 5G plan. The latter two are Jio’s hardware enablers: Chipmaker Qualcomm is expected to offer deep technology know-how and insights to drive the 5G vision. Intel has advanced edge computing offering across processors and access to this technology can help Jio pace the 5G rollout. Google and Jio have come to a commercial agreement, where they would work together on an entry-level Android smartphone with 4G and possibly 5G capabilities.

Jio has designed its end-to-end 5G solutions from scratch using homegrown technologies. While it hasn’t given out details of its 5G solution, it expects to position itself to be an exporter of 5G systems as complete managed services in the near future.According to telecom experts, Jio could theoretically have a 15% cost advantage in 5G rollout if it uses self-built software. But there is a high possibility that Jio will extend partnerships with existing Indian providers in the 5G space to offer these solutions.

Airtel has said it will work with Huawei, ZTE, Ericsson, and Nokia on its trials. It has deployed 100 hops of 5G technology transmission equipment supplied by Huawei, improving its backhaul capacity by a factor of four, and has struck deals withCisco and Ericsson to speed up its core network in readiness for 5G service.

Vodafone Idea will conduct its trials with Huawei, ZTE, Ericsson, and Nokia, and is already using 5G AI technology from Huawei to boost the capabilities of its 4G network

Several Indian companies across software and technology solutions have already been rolling out their own global 5G solutions. From Tech Mahindra, Cyient, ITI Ltd to Sterlite Technologies Ltd and Saankhya Labs, these companies have built 5G expertise across core telecom solutions such as virtual radio access networks (VRAN), Open RAN (ORAN), chipsets and hardware, which Jio can possibly tap into for its homegrown solutions.

In fact, Jio’s Japanese peer Rakuten is already in talks with a number of Indian providers for their 5G solutions and experts estimate Jio will also onboard additional solutions from these companies.According to a UBS Evidence Lab survey from December 2019, 59% of telcos were already using network virtualization and 51% were willing to work with non-traditional vendors, suggesting these trends are opening ways for niche players, such as Jio, to get a share of global telco capex spend.

Network virtualization solutions can only work with a strong optical fibre cable (OFC) backbone. One of the leading OFC manufacturers globally, Sterlite Technologies Ltd (STL), has evolved from core manufacturing to digital networks services through acquisitions across software solutions over the past years to include solutions for virtualized access, network software products and system integration services.

Another homegrown company, Saankhya Labs, also owns intellectual property and provides radio units and chipsets for VRAN deployments

Tech Mahindra has a 17% stake in telecom software provider Altiostar, which is already rolling out cloud-based solutions for Japanese telco Rakuten. Globally, the company has been offering solutions across software-defined and cloud native networks, adoption of disaggregated networks and VRAN, among others, across markets in US, Europe and Japan.

Recently, Tech Mahindra announced a partnership with ITI, which has large manufacturing facilities, to enable manufacturing of 4G equipment and work on building capabilities for 5G equipment for the Indian market.

Another Indian company that has been present in this space is Cyient which provides intelligent network solutions for global telcos and is closely involved in 5G rollouts across Australia, South Korea, US and Europe among others apart from multiple telecom carriers globally.