CRISIL reports in India 5G user base expected to reach 300 million by fiscal 2025
By MYBRANDBOOK
In India about 300 million subscribers are expected to use 5G services by March 2025, as against an estimated 20-25 million as of March 2023. The balance two-thirds would continue to use 4G.
Subscribers of 5G services will provide a fillip to data consumption because they would uptrade to higher data packs for better speeds, which will drive up overall average revenue per user (ARPU) and return metrics for telecommunication companies (telcos).
Telcos are on a 5G roll-out spree across India, having already launched in 300+ cities since October 2022. However, mass adoption would gather pace when retail use-cases get unlocked. Despite identification of a plethora of 5G-led use cases such as smart classrooms, precision farming and intelligent transport systems, adoption hinges on a significant improvement in network infrastructure, which will happen only gradually over the next few years.
Till then, adoption of 5G services would be largely driven by technology-neutral tariffs being offered by telcos currently. The penetration of 5G device ecosystem among users would also be crucial for uptake of 5G services.
Says Naveen Vaidyanathan, Director, CRISIL Ratings, “Currently, about 30-35% of the 150-170 million smartphones shipped in India annually are 5G enabled. While the share of 5G smartphones shipments will improve gradually, still low initial value proposition and high cost of the gadget versus a 4G phone would restrict overall 5G adoption to 300 million users by fiscal 2025. Put another way, this would mean only a third of the data users in the country will be plugging into 5G services by fiscal 2025.”
In contrast, the adoption of 4G services was swift with 60% data users migrating within two years of launch, helped by better speeds (compared with 3G) at significantly cheaper tariffs.
To recall, intense price competition during the launch of mass 4G had led to ARPU falling to Rs 100 from Rs 190 over fiscals 2017-2019. However, silver lining in the cloud was massive spurt in data consumption, which led to average data consumption per subscriber per month quadrupling to ~20 gigabyte (GB) in the past 5 fiscals.
Says Rounak Agarwal, Team Leader, CRISIL Ratings, “India is already one of the highest data-consuming countries. 5G could accelerate adoption of over-the-top streaming services and online gaming, which would drive data demand further. Consequently, average data usage per subscriber per month is expected to rise to 28-30 GB by fiscal 2025 from 20 GB at present. We see customer uptrading because of higher data demand, rising share of post-paid subscriptions and tariff revisions driving up ARPU to Rs 250 over the medium term.”
The increase in ARPUs could drive up sector’s return on capital employed (RoCE) to 12-14% amid massive investments of Rs 2-2.5 lakh crore planned for 5G networks over the medium term. The RoCE is a modest 6-8% currently because of large adjusted gross revenue dues and sizeable investments made to purchase spectrum in the last two auctions.
Any higher-than-expected investment in 5G networks and spectrum and its impact on return metrics will bear watching.
InterGlobe’s Rahul Bhatia and C.P. Gurnani together announce
In a move that is set to transform the AI landscape, Rahul Bhatia, Group M...
Download masked Aadhaar to improve privacy
Download a masked Aadhaar from UIDAI to improve privacy. Select masking w...
Sterlite Technologies' Rs 145 crore claim against BSNL rejecte
An arbitrator has rejected broadband technology company Sterlite Technolog...
ID-REDACT® ensures full compliance with the DPDP Act for Indi
Data Safeguard India Pvt Ltd, a wholly-owned subsidiary of Data Safeguard ...
LAVA INTERNATIONAL LTD.
FINOLEX INDUSTRIES LTD.
FRESHWORKS TECHNOLOGIES PVT. LTD.
VVDN TECHNOLOGIES
Technology Icons Of India 2023: Aalok Kumar
Aalok continues to lead the India business and further strengthen Indi...
Technology Icons Of India 2023: Hari Om Rai
Hari Om Rai is the Co-founder, Chairman & Managing Director of Lava In...
Technology Icons Of India 2023: Shailender Kumar
Shailender Kumar is senior vice president and regional managing direct...
NPCI leading India towards Digital payments
The National Payments Corporation of India (NPCI) is an initiative tak...
BEL leveraging next generation technologies to keep the country ahead in Defence space
Bharat Electronics Limited (BEL) is a Navratna PSU under the Ministry ...
C-DAC keeps India ahead in IT & Electronics R&D space
Centre for Development of Advanced Computing (C-DAC) is the premier R&...
NETPOLEON SOLUTIONS
Netpoleon Group is a Value-Added Distributor (VAD) of Network Security...
IRIS GLOBAL SERVICES PVT. LTD.
Iris Global services is one of the leading distribution houses that d...
TECHNOBIND SOLUTIONS PVT. LTD.
TechnoBind’s business model is focused on identifying and partnering...