“India Is A Strategic Market For Ericsson”
Why does Ericsson believe that India is completely ready for 5G?
From a consumer perspective, there is high interest for 5G in India with consumers willing to pay a premium for the new 5G capabilities. An Ericsson ConsumerLab report titled ‘Five ways to a better 5G’ found that at least 40 million smartphone users in India could adopt the 5G technology in the first year of the launch. Indian users are willing to pay as much as 50 per cent more for 5G plans, provided they are bundled with new services. Further, with average data consumption per smartphone at 14.6 GB per month, India continues to be the second-highest data-consuming country in the world, according to the Ericsson Mobility Report 2021.
With the market witnessing strong mobile broadband penetration, we believe India is ready for 5G and affordable 5G spectrum needs to be made available to the operators. From a technology perspective, Ericsson is ready for 5G. Our radio system hardware has been 5G-ready since 2015 enabling operators to upgrade to 5G with a remote software installation. We continue to work with our Indian service providers to prepare for the introduction of 5G in India.
What kind of investments would Indian telecom companies need to make for 5G?
It is premature to quantify investments required to rollout 5G in India. However, it is worth highlighting that Indian telecom operators are getting ready for 5G by augmenting their 4G networks to enable seamless transition to 5G. According to our ‘Economic study of enhanced mobile broadband’, evolution to 5G will enable 10 times lower cost per gigabyte than current 4G.
What is the quantum of investment made by Ericsson in India? How is Ericsson driving ‘Make in India’ for India and the world? What are Ericsson’s future plans in India?
Ericsson has been in India since 1903 supporting all mobile generations from 2G, 3G, 4G, and now 5G. Ericsson was the first telecom equipment company to start manufacturing in India in 1994. Since then, we are catering to all requirements for supplies in India from our facility in Pune and are exporting both 4G and 5G gear to other countries. Ericsson India has the largest employee workforce anywhere in the world with operations across all functions from design, R&D and manufacturing to sales and service, networks, managed services.
Further, to harness opportunities from the latest technologies such as AI/ ML, we have established an innovation hub focusing on research and development in artificial intelligence (AI) and automation. This Global AI Accelerator (GAIA) leverages cutting-edge AI and automation technologies to create data-driven, intelligent, and robust systems for automation, evolution, and growth in the 5G era.
India is a strategic market for Ericsson, and for us our presence here is important. We are committed to the country and will continue to invest. To this effect, we have participated in the government’s PLI scheme for the telecom sector and the additional investments made under this scheme will help us scale our Pune facility. We stay committed to India and look forward to the opportunity of helping Indian service providers seamlessly evolve their networks from 4G to 5G.
What are your views on the 5G-related tenders? How do you look at your chances especially as a brand with a strong global lineage?
At Ericsson, we have been winning business and customers based on our technology capabilities and leadership. We strive to support our customers and create value for them backed by technologically advanced solutions. We focus on what we can impact, which is, what solutions we bring to the customer. And if we can bring competitive solutions from Ericsson, that solve their needs, then we have a chance to win the business.
The Ericsson Mobility report states that 5G will represent around 26 per cent of mobile subscriptions in India at the end of 2026 (estimated at about 330 million subscriptions). In order for this to happen, what are the steps required? What would be the estimated monthly subscriptions for 5G and how expensive would it be?
5G and digitalisation must be viewed as a critical part of national infrastructure — every bit as vital as trains and roads.5G spectrum prices have to be reasonable. We believe that 5G would require a lot of spectrum. It is, therefore, important that more spectrum is made available at reasonable prices, which will ensure additional capital for subsequent investments in network deployments. It will spur innovation and lead to development of use cases that will definitely benefit the country.
India should identify the entire 5G spectrum band for India and make it available to the telecom sector at the earliest. We hope like in other parts of the world every operator gets at least 80-100 MHz of spectrum in 3.5 GHz, 400 MHz in millimeter wave and sufficient backhaul spectrum in E band.
Based on the 5G experience from markets where it has been introduced, our Ericsson ConsumerLab study outlines that communications service providers (CSPs) can meet consumer expectations both in the immediate and longer term by educating and better marketing the value of 5G to consumers, ensuring consistent quality of indoor and outdoor 5G coverage, offering new 5G services and developing new use cases through ecosystem partnerships
You recently said that India has the potential to become one of the top two markets for Ericsson in the next few years. How will this be achieved and in how many years? Which is the other market?
India has consistently performed well for Ericsson and our business here has been majorly driven by continued investments in LTE. We believe the government’s focus on digitalisation, the ‘Make in India’ programme and fresh investments by operators towards getting ready for 5G will enable us to perform well in terms of the network’s portfolio. Further, our managed services and digital services business will also contribute to our growth.
How much are the Indian consumers willing to pay for 5G?
As I shared earlier, there is a high interest for 5G among consumers globally and they are willing to pay for the new capabilities that 5G brings. As per our ConsumerLab report, while consumers globally are willing to pay 20-30 per cent more on an average for 5G plans bundled with digital services, Indian consumers are willing to pay 50 per cent more for similar subscription plans.
How is Ericsson supporting Indian telecom operators?
Ericsson’s Radio System hardware has been 5G-ready since 2015 enabling operators to upgrade to 5G with a remote software installation. We work closely with all Indian operators and continue to engage with them on their network evolution plans. Currently, we are carrying out 5G trials with our customers.
In January this year, we partnered with Airtel to demonstrate 5G on a live network in Hyderabad city. Leveraging Ericsson’s dynamic spectrum sharing technology, Airtel gave India its first experience of 5G over a commercial network. In June, we partnered with Bharti Airtel once again to demonstrate enhanced speeds of over 1 GBPS at a live 5G network that we set up at Cyber Hub in Gurgaon using Bharti’s 3500 Mhz trial spectrum. Most recently, we enabled Airtel to successfully carry out India’s first cloud gaming session in a 5G environment in Manesar.
What has been the response from other markets where 5G has been deployed? What has been your learning?
Our global 5G deployment experience across 96 live networks will enable us to help Indian operators seamlessly evolve from 4G to 5G. Some of the global use cases that we are deploying across other markets can be adapted and introduced in India apart from the India specific use cases that we are working on with Indian operators.
We are seeing a rapid adoption of 5G in markets where it has been introduced. In 2019 we partnered with SK Telecom, the largest mobile operator in South Korea with nearly 50 per cent of the market share, to switch on its commercial 5G network in the world’s fastest-growing 5G market. South Korea has been able to add 10 million-plus 5G subscribers of the 70 million users in total.
We also partnered with Telstra in the same year, Australia’s largest mobile network provider, to rollout and activate 5G in 10 cities. Early users were able to experience better network coverage even in underground and overpopulated areas while advanced technologies such as AR and VR are being utilised for diverse use cases powered by the speed and low latency of 5G.
Enhanced mobile broadband (eMBB) and fixed wireless access (FWA) are expected to be the early use-cases for 5G in India. These will help address the concern of the limited fixed broadband penetration levels in India and improve the data experience while on the move. Over time, we expect more enterprise related use cases to come up leveraging the benefits of 5G in sectors like manufacturing, healthcare, education etc.
The current ARPU of operators is less than $2 in India. What would be the ARPU for mobile operators after the 5G rollout?
We do expect to see incremental revenues for telecom operators based on the introduction of new digital services by operators with 5G. 4G and 5G will also enable enterprises to digitalise, thereby creating new revenue opportunities for service providers.
