The much talked about 5G spectrum auctions are over. The auctions, which unexpectedly spanned 7 days, netted the government a record Rs 1,50,173 crore — this is the biggest sale of radio waves in India. Altogether, of the total 72,098 MHz of spectrum available at auction with a validity period of 20 years, 51,236 MHz were sold to bidders.
The four companies in the fray bid on predictable lines with 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) offering based on their current financial realities. The Adani group, who later and by surprise entered the field, contributed Rs. 212 crore for the auction kitten.
Union Telecommunications Minister Ashwini Vaishnaw announced that spectrum allocation will be completed on August 10 and 5G services will likely be launched from October.
5G: Smartphone brands waiting for a spark
5G will provide higher speed, lower latency and greater capacity than 4G LTE networks. It is one of the fastest and most robust technologies the world has ever seen. 5G means faster downloads, much less 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 businesses and also create jobs. As the country gears up for long-awaited 5G services, the question is whether it can help bring to life what has been a dull smartphone market of late.
For context, according to The latest numbers from Counterpoint Research (opens in new tab), India’s smartphone market saw the fourth consecutive decline in shipments, falling to 37 million units in the June quarter, down 5% from the March quarter. There are many reasons for this drop, from supply chain problems and chip shortages to inflation and macroeconomic issues. The market needs some momentum to get out of this quagmire. And the launch of 5G services could provide the spark that the smartphone market desperately needs.
According to Counterpoint research analyst Shilpi Jain, said, “The share of 5G smartphone shipments reached 29% of overall shipments in Q2 2022, which was an all-time high. The 5G auction and the commercial availability will accelerate the adoption of 5G smartphones among users.”
India is said to have 530 million 4G smartphone users, and around 280 million of them have upgraded their phones in the last two years. Counterpoint said phone makers in India have a chance to reach the nearly 250 million remaining users and spark a demand for 5G phones.
5G: How Much Will Data Charges Be Affected
But a part of Indian consumers seems uncertain about 5G adoption as they are unsure about rising data charges and smartphone prices, especially in rural regions. This is a valid question. But on the bright side, the Union Telecommunications Minister allayed fears by saying that data rates in India are already at around US$2, against the global average of US$25. India will continue to set benchmark rates for as new services are launched, he said.
But market research agency GlobalData has conservatively predicted that only 27% of the country’s mobile subscribers will use 5G services by 2026. But telecoms equipment company Ericsson is much more enthusiastic in its predictions. He claimed that there is significant consumer interest in embracing 5G, and 40 million smartphone users could use 5G in its first year of availability in India.
All things considered, smartphone brands will be pinning their hopes on the launch of 5G for the market to improve, which seems like a logical expectation.