The much-talked about auctions for 5G spectrum have ended. The auctions, which unexpectedly stretched for 7 days, have netted the government a record Rs 1,50,173 crore — this is the biggest sale of airwaves in India. In all, out of the total 72,098MHz of the spectrum available on auction with a validity period of 20 years, 51,236MHz has been sold to the bidders.
The four companies in the fray bidded on predictable lines with the market leader (in terms of subscriber base) Reliance Jio (Rs 88,078 crore) and others like Bharti Airtel (Rs 43,084 crore) and Vodafone-Idea (Rs 18,799 crore) bidding based on their current financial realities. The Adani group, which was a later and surprise entrant into the field, has chipped in Rs. 212 crore to the auction kitty.
Union Telecom Minister Ashwini Vaishnaw has announced that the spectrum allocation will be completed by August 10 and the 5G services are likely to be rolled out from October.
5G: Smartphone brands hoping for a spark
5G will provide higher speed, lower latency and greater capacity than 4G LTE networks. It is one of the fastest, most robust technologies the world has ever seen. 5G means quicker downloads, much lower lag and a significant impact on how we live, work and play. The upcoming 5G services have the potential to create new age businesses, generate additional revenue for enterprises and provide employment, too. While the country gets ready for the much-expected 5G services, the question is can it help breathe life into what has been otherwise dull smartphone market in recent times.
For context, according to Counterpoint Research’s latest numbers (opens in new tab), India’s smartphone market saw the fourth straight sequential fall in shipments, declining to 37 million units in the June quarter, a 5% drop from the March quarter. There are many reasons for this fall, ranging from supply chain issues and chips shortage to inflation and macro-economic issues. The market needs some impetus to get itself out of this morass. And the rollout of the 5G services can provide the spark that smartphones market desperately needs.
According to Counterpoint’s Research Analyst Shilpi Jain said, “the 5G smartphone shipment share reached 29% of overall shipments in Q2 2022, which was the highest ever. The 5G auction and commercial availability will accelerate 5G smartphone adoption among users.”
It is said that India had 530 million 4G smartphone users, and around 280 million of them have reportedly upgraded their phones over the past two years. Counterpoint said phone makers in India have a chance to target the remaining nearly 250 million users and trigger a demand for 5G phones.
5G: How much will data charges be impacted
But a section of Indian consumers seem uncertain about the adoption of 5G, as they are unsure about the increase in data charges and smartphone prices, especially in rural regions. This is a valid misgiving. But on the positive side, the Union Telecom Minister had assuaged fears saying that already data rates in India are at about $2, against global average of $25. India will continue to set rate benchmarks as new services are rolled out, he had said.
But the market research agency GlobalData has conservatively forecast that only 27% of the country’s mobile subscribers will be using 5G services by 2026. But telecom equipment company Ericsson is much more gung-ho in its predictions. It has claimed that there is significant consumer interest in adopting 5G, and 40 million smartphone users could take up 5G in its first year of availability in India.
All things considered, smartphone brands will be pinning their hopes on 5G rollout for the market to get better, which on the face of it, seems a logical expectation.