India’s PM Narendra Modi rolls out 5G services in bid to boost digital sector

Telecom companies Reliance Jio, Bharti Airtel and Vodafone Idea are expected to phase in 5G services

The introduction of 5G is part of the push by Prime Minister Narendra Modi’s government to accelerate growth in India’s digital sector. AP

Indian Prime Minister Narendra Modi unveiled high-speed 5G telecom services at the annual India Mobile Congress in New Delhi on Saturday.

Telecom companies including Reliance Jio, Bharti Airtel and Vodafone Idea are expected to make a phased introduction of 5G services in Asia’s third-largest economy over the coming year, AP reported.

“This event will be etched in history,” Mr Modi said at the technology forum. "It is a step towards a new era in the country and the beginning of infinite opportunities.”

5G technology will provide seamless coverage, high data rate, low latency and highly reliable communications. It will increase energy efficiency, spectrum efficiency and network efficiency, according to a statement from the Prime Minister’s Office on Saturday.

The government said that the cumulative economic impact of 5G on India is expected to reach $450 billion by 2035.

Fifth generation technology offers up to 20 times faster internet speed compared with 4G, proponents said.

It can also be used in new-age technology such as artificial intelligence, virtual reality and blockchain, which in turn can boost productivity in industries.

The introduction of 5G is part of the push by Mr Modi’s government to accelerate growth in India’s digital sector. New Delhi, under its Digital India campaign banner, expects the value of the entire sector to reach $1 trillion by 2025.

The global 5G technology market was valued at $5.13bn in 2020 and is expected to hit about $798bn by 2030, growing at a compound annual rate of 65.8 per cent from 2021 to 2030, Allied Market Research said.

China, the world's second-largest economy and most populous country, had the highest 5G penetration at 84 per cent in January.

This came amid a push by local telecoms operators and the readiness of original equipment manufacturers to market competitively priced 5G smartphones to consumers, a Counterpoint Research study showed in March.

“India might have started late, but we will finish first by rolling out 5G services that are of higher quality and more affordable,” said Mukesh Ambani, chairman and managing director of Reliance Industries.

Jio will launch 5G telephony services across India by December 2023, he said.

“India is aspiring to become developed by 2047. 5G is the foundational technology that unlocks the full potential of other 21st-century technology,” Mr Ambani said at the India Mobile Congress event, which was jointly organised by the Department of Telecommunications and the Cellular Operators Association of India.

"The technology can bring affordable, superior education and skill development to ordinary Indians and deliver high-quality healthcare to rural and remote areas," he added.

Reliance Industries will invest 2tn rupees ($25bn) to unveil its 5G services in India’s four largest cities in October.

Reliance Jio Infocomm, the telecoms arm of Reliance Industries, will offer 5G services in Delhi, Mumbai, Chennai and Kolkata within the next two months, Mr Ambani said during the company’s annual general meeting in August.

Reliance Jio Infocomm bought airwaves worth more than $11bn at a local spectrum auction as it sought to cement its edge over smaller rivals in setting up faster 5G networks in India.

Meanwhile, Bharti Airtel said it will roll out its 5G services in eight Indian cities on Saturday and has set March 2024 as the deadline for countrywide coverage for as many as 5,000 towns, AP reported.

Mr Modi gave regulatory certainty to the telecom sector with the launch of 5G, said Ashwini Vaishnaw, India’s Minister of Railways, Communications and Electronics and Information Technology.

“Telecom is the gateway to Digital India,” he said.

The telecom sector has, in recent years, experienced a lot of disruption, especially after Jio launched its services in 2016.

The company's cut-price deals intensified competition in the sector to the extent that it pushed a few rivals out of business and accelerated the pace of consolidation in the industry.

The broader digital sector has grown rapidly and has been a magnet for foreign investors, with Reliance's digital division Jio Platforms attracting investment from Google and Facebook.

With super fast data speed, 5G is among the building blocks of Internet of Things and virtual reality and can lead to dramatic improvements in live streaming and gaming capabilities in India, according to analysts.

However, they said that a large-scale introduction of 5G could end up taking double the time as India is already behind the curve compared with many other countries.

Even in places such as the US, the transition to 5G is proving slow.

“5G will be an expensive roll-out,” said Utkarsh Sinha, managing director of Bexley Advisors, a boutique investment bank based in Mumbai.

“On top of the high bids placed by leading contenders, the equipment and installation costs are also exponentially high.”