Rating agency Crisil in its latest report has said that with the closure of the fifth generation (5G) telecom auctions, India has joined a select list of 70 countries with 5G technology offerings. However, it said 5G rollout faces a host of challenges-among others, a lack of use cases, costly handsets, and potential rollout at a premium that will limit 5G revenue to single digit share of total revenue by fiscal 2026.
According to the report, the government garnered Rs1.5 lakh crore from the sale of spectrum, with four players bidding actively. At least Rs13,000 crore of the cash flow is likely this fiscal. From the players' perspective, subscriber upgrade to 5G and aggressive market share gains will be key to success. Additionally, the low level of fiberisation at present will necessitate network capex of Rs1.5-2.5 lakh crore in the next 2-3 years, with a potential 5-9% increase due to rupee depreciation this fiscal alone.
However, the report said zero spectrum usage charge (SUC) and relaxation of upfront payment provide some relief. As things stand, enterprise readiness is on a sticky wicket at present, though manufacturing appears to be the most suitable and ready for 5G adoption.
