In comparison to its predecessor, 4G, and 5G cellular technology is approximately 20 times faster than its predecessor. 5G’s theoretical maximum speed is 20 Gigabits per second (Gbps). 4G technology has a top speed of 1 Gbps.
New Delhi: This year’s successful auction of the spectrum has brought India one step closer to launching 5G services. There’s a good chance that 5G services will be available to consumers in cities such as Delhi and Mumbai in October.
How will the fifth generation of cellular technology affect India’s telecommunications services and business? In comparison to its predecessor, 4G, and 5G cellular technology is approximately 20 times faster than its predecessor. 5G’s theoretical maximum speed is 20 Gigabits per second (Gbps). 4G technology has a top speed of 1 Gbps.
Digital data transmission media, such as optical fiber, can be measured in gigabits per second (Gbps). It’s a way of expressing a data transfer rate of one billion bits per second. Upload and download speeds will be much faster on 5G networks than they are on 4G networks.
It is true that 5G is faster than 4G, but this is not the only advantage it has over the previous generation. Using the 5G network, business applications and other digital experiences like online gaming, videoconferencing, and self-driving cars will be significantly improved.
As a matter of fact, 5G is not simply an upgrade from 4G. It’s a huge step forward for sure. A large radio tower is used to transmit signals over long distances using lower frequency radio waves in fourth-generation networks.
Small-cell antennas attached to buildings, street lights, and other objects will be added to 5G networks. Using an ultra-high frequency spectrum, these tiny cells will transmit massive amounts of data over short distances.
Those in the industry and analysts believe that customers will have to pay more for the new 5G service offerings. “We expect telcos to charge a premium for 5G services due to the significant investments they have made in acquiring spectrum. Adoption of 5G services will be determined by the amount of a premium over 4G tariffs “senior director at CRISIL Ratings, Manish Gupta.
Despite the two rounds of major tariff hikes in December 2019 and November 2021, telcos may raise tariffs for 4G services in order to ensure the widespread adoption of 5G. “For 4G services, we expect a price increase in the second half of this fiscal year. Though fiberization (a prerequisite for effective 5G deployment) is weak right now and telcos are required to launch commercial services in at least one city of each circle by the end of the first year of acquiring the license, mass 5G rollout may not happen until next fiscal year. For this reason, tariff increases and 5G’s launch will have their full impact in fiscal 2024 “That was the opinion of Gupta.
Minister Ashwini Vaishnaw hopes that 5G services will be
available in October this year. Major cities such as Delhi, Mumbai, Chennai, Bengaluru, and Pune are expected to be the first places to get the new Uber service.
On Monday, the 5G spectrum auction was concluded. After seven days of bidding, Monday’s auction had its final 40 rounds. To date, the government has auctioned off 51,236 MHz (roughly 71% of the total available spectrum), bringing in bids totaling Rs 1,50,173 crore.
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This auction has resulted in the acquisition of spectrum by four companies. Vodafone Idea, Bharti Airtel, and Adani Data Networks are the four companies that make up Reliance Jio Infocomm Limited.
The telecom sector, according to Gupta, has a high capital intensity because it necessitates ongoing investments in technological advancement and spectrum acquisition.
Over the fiscals of 2017-21, telecom companies invested nearly Rs 5 lakh crore to roll out 4G services, resulting in the sector’s enormous debt (including lease liabilities) of Rs 4.73 lakh crore as of March 31, 2022. The sector’s debt could rise to Rs 6.1 lakh crore if more spectrum is purchased in this auction. As a result, he predicted that the sector’s debt/EBITDA ratio would rise to 4.6x this fiscal year, up from 4.2x as of March 31, 2022. As a result of tariff increases and 5G rollouts, as well as customer up trading, Gupta expects a decrease in the leverage ratio in the upcoming fiscal year.
58.65 percent of the Rs 1,50,173 crore the government received from the 5G spectrum auction was contributed by Reliance Jio’s bid of Rs 88,078 crore. This is an effort by Bharti Airtel to acquire 19867.8 MHz of spectrum in five different frequency bands, worth an estimated $43,084 million in India.
At frequencies in 1800, 2100, 2500, 3300, and 26-GHz ranges, Vodafone Idea Limited has placed bids totaling Rs 18,799 crore. Adani Data Networks Limited has bid Rs 212 crore to acquire 400 MHz of spectrum in the 26 GHz frequency band, according to a statement from the company.
The 700 MHz band, according to Nomura, could give Jio an advantage in network quality, particularly indoors. Nomura predicted that the rollout of 5G would begin in metro areas and larger cities, with smaller areas getting it first. The brokerage firm said that “there is a potential for telcos to charge a premium for 5G vs. 4G.” Cash-flow requirements of telcos would be supported by a moratorium of up to four years provided for adjusted gross revenue-related dues and favorable terms of payment for the spectrum purchased in the current auction, despite weak leverage and elevated debt estimates, according to Rakshit Kachhal, Associate Director, CRISIL Ratings.
This time around, telcos have the option to pay in 20 equal annual installments instead of the upfront payment required in the past auctions, which will help with cash flow. This auction’s purchase of spectrum would also provide telcos with an additional (though not immediate) relief, as it would mean potential annual savings of at least Rs. 3,000-5,000 crore over the medium to long term, according to Kachhal.
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