Indian telecom players have made substantial investments in spectrum and infrastructure for the launch of 5G services in the country. Now, the companies have been expressing concerns over ways to monetise the 5G connectivity. The top two players in the Indian telecom market, Reliance Jio and Bharti Airtel have also been aggressively launching 5G services across the country.However, a lack of 5G use cases has become a challenge for the industry. EvenFWA (fixed wireless access) is yet to gain traction as the first use case. Ericsson has a piece of advice for telcos on how to monetise 5G aptly. To do so, Swedish telecom equipment maker has recommended operators evolve into a service creator role from just being a connectivity provider.
In an interview with The Economic Times, Ng Thiaw Seng, head of strategic network evolution of market area South East Asia, Ocean & India at Ericsson has said that telecom providers have to take up the service creator role to drive the partnership and end-to-end device and system integration.
How Indian telcos can monetise 5G
“The potential is there (for 5G monetisation) but somebody has to step up to pull the ecosystem together to make it work end-to-end. FWA is a very good use case in India. India has less than 10% of home broadband penetration. These are the low-hanging fruits, but there are more use cases on top of this other than eMBB and FWA like in the medical healthcare segment,” Seng noted.
Looking at the demographic in India, only home broadband has penetrated only 10% of the country and there is a 90% potential for growth. The remaining 90% base also includes high-end, medium and low-end segments, Seng added. To compare, global operators are launching FWA at both the high-end and the low-end segments. However, the cost of customer premise equipment (CPE) is still high at around $150-$180.
“There is a positive business case with those high-end and medium-end segments, subsidizing the CPE. But when you reach out to the rural areas, where we’re talking about ARPU of $2 or $3, it will take a few more years. The near-term opportunity is that the ARPU for fixed wireless can be more or less the same as fixed broadband, which is currently a shortcoming in the market due to limited fibre penetration. In the next few years, it might gradually grow, but will eventually reach those massive homes that require home broadband, and that’s where the opportunity lies,” Seng continued.
In an interview with The Economic Times, Ng Thiaw Seng, head of strategic network evolution of market area South East Asia, Ocean & India at Ericsson has said that telecom providers have to take up the service creator role to drive the partnership and end-to-end device and system integration.
How Indian telcos can monetise 5G
“The potential is there (for 5G monetisation) but somebody has to step up to pull the ecosystem together to make it work end-to-end. FWA is a very good use case in India. India has less than 10% of home broadband penetration. These are the low-hanging fruits, but there are more use cases on top of this other than eMBB and FWA like in the medical healthcare segment,” Seng noted.
Looking at the demographic in India, only home broadband has penetrated only 10% of the country and there is a 90% potential for growth. The remaining 90% base also includes high-end, medium and low-end segments, Seng added. To compare, global operators are launching FWA at both the high-end and the low-end segments. However, the cost of customer premise equipment (CPE) is still high at around $150-$180.
“There is a positive business case with those high-end and medium-end segments, subsidizing the CPE. But when you reach out to the rural areas, where we’re talking about ARPU of $2 or $3, it will take a few more years. The near-term opportunity is that the ARPU for fixed wireless can be more or less the same as fixed broadband, which is currently a shortcoming in the market due to limited fibre penetration. In the next few years, it might gradually grow, but will eventually reach those massive homes that require home broadband, and that’s where the opportunity lies,” Seng continued.
There were already 100 million global connections by the end of 2022. This number is expected to grow to 300 million connections by 2028 and the majority of these connections are expected to be 5G.
Learning to draw from other countries
Some of the countries like Oman and the Philippines which have slightly lower penetration of home broadband can also be good examples for Indian telecom providers. FWA in the home broadband penetration in these countries has grown by 30% to 50%.
Countries with high broadband penetration like the US and Australia also have an opportunity for growth. Telecom providers in the US (where houses already have excellent home broadband connections) have been able to capture 5% of home broadband conversions through FWA over the past two years.
This segment of 5G connections targets the SME sector and focuses on replacing DSL connections which offer slower speeds. Seng also added that the Indian market has a huge potential for FWA connections.
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