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5G Adoption Faces a Considerable Conversion Challenge

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5G services were launched in the country amid much fanfare earlier this month and have generated a fair degree of curiosity. Conversations with experts have confirmed that the 5G roll has been announced, a reasonable ‘teething time’ will be needed for the services to be optimized and stabilized in India. This article elaborates on the spectrum of challenges associated with roll out and adoption of 5G services.

Inadequate Infrastructure
Network infrastructure constraints present massive challenges in the wider roll out of 5G services. Only 30% of India’s telecom towers have fibre connectivity as opposed to 70%+ requirement for an efficient 5G launch. This wide gap would require substantial capex investment from the telcos burdened by high debt, sluggish ARPU growth, and high spectrum fees. The 5G service coverage is likely to remained confined to the large cities until significant improvement in fibre connectivity across the country.
According to Sandip Das, Senior Advisor at Analysys Mason and member of the advisory board of Sterlite Technologies, one of the leading voices from the telecom industry in the country, “Whenever a new generation of mobile technology like 5G is rolled out several things need to evolve in the ecosystem, for example: Global standards have to settle for interoperability and development / stabilization of equipment, infrastructure has to be tendered by the operators, vendors selected and then networks must be rolled out. However, while the services have been declared to be launched quickly, it will take considerable time before its usage is more widespread as network coverage expansion will take its time.”

Dominant chunk of smartphone universe not 5G ready
Multiple reports published across leading business newspapers suggest that less than 10% of smartphones are estimated to be 5G compatible and it would take another 3-4 years for 50% of current smartphone users to have 5G ready handsets. Only 30% of current smartphone shipments are 5G compatible.

Low consumer interest
The outlook for consumer adoption of 5G services appears to be grim in wake of recent survey conducted by Local Circles. The survey findings released in leading news publications indicated only 5% of consumers were willing to switch to 5G and perceived it as a fix to the issues experienced with current mobile networks. In addition, only 4% of the consumers were intending to acquire 5G compatible handsets in the next 3 months.

Slow pace of 5G roll out across the country could delay the delivery of high-quality live streaming being demanded by consumers
The future growth of digital video content consumption will rely on the roll out of 5G services. The infrastructure limitations and challenges surrounding the 5G roll out is likely to make the consumers wait for seamless viewing of HD and 4K video without disruptions.

The potential delay in roll out of 5G services will also reduce the pace of growth of connected TVs which was expecting the 5G launch to provide acceleration in growth. The low consumer interest indicated by Local Circles research and Ericsson mobility report in terms of intent to upgrade to 5G in its first year of availability would lead to miniscule impact on digital content consumption.

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