Ratings agency asks whether India’s towers can manage 5G

Ratings agency asks whether India’s towers can manage 5G

Could the rollout of 5G services across India by operators be slowed without heavy investment in tower connectivity? That appears to be the question asked by ratings agency ICRA, which suggests that some three trillion rupees (about US$36.7 billion) will need to be spent over the next four to five years to fiberise towers.

It’s no surprise that 5G will demand network densification and major backhaul infrastructure. However, ICRA (formerly Investment Information and Credit Rating Agency of India) says only 35% of towers are fiberised at the moment. Solving this problem will involve adding to very high operator debt, due to increase after last year’s 5G spectrum sale. That said, ICRA suggests that operating income and ARPU, along with telephony usage, appear to be on an upward trajectory.

And that trend may continue with the free live streaming of the Indian Premier League (IPL) cricket tournament from late March on the JioCinema platform, which will also be available on all mobile networks. This, it has been suggested, could see a 10%-15% sequential jump in data consumption in the June quarter.

Will data use hasten 5G adoption and boost appetite for mobile internet services in parts of India where television penetration is relatively modest, as some observers suggest? Even TV owners are likely to do a lot of mobile viewing in the go during matches; if so, the IPL could indeed cause a spike in data usage.

Still, for 5G to benefit means there needs to be a rise in the number of 5G smartphones in the market (currently estimated at only 100-150 million). And of course, a rise in the number of towers equipped to manage demand.

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