India

The Indian market today

India is among the world’s fastest growing economies. It has a developed software industry with e-commerce, digital payments and educational technology standing out. Industrial enterprises are making unprecedented investments in digital transformation to modernize their processes – increasing demand for reliable network connectivity.

India’s strong growth supports a dynamic mobile services market. Over the past five years, it has seen rapid adoption of smartphones and migration up to 4G. In the region as a whole (including India, Nepal, and Bhutan), the share of 4G has grown from 9 percent of mobile subscriptions in 2016 to 68 percent in 2021.¹ This has had a significant positive impact on India’s consumers, economy and society. With a low penetration of fixed broadband, consumers have mostly relied on mobile broadband for remote working, education, healthcare services, shopping and other services during the COVID-19 pandemic.

Challenges in the Indian market

While India presents significant opportunities for growth, it also holds challenges for service providers. Indian service providers have recently been raising the price of data (the average price of 1GB of mobile data reached USD 0.68 in 2021) and mobile services revenue has continued to grow. Despite this, service provider ARPU remains low. Moreover, India has some of the highest prices for spectrum in the world, constraining service providers’ ability to invest in infrastructure.

In the India region as a whole, mobile data traffic has grown by more than 15 times in the past 5 years (from 0.8EB per month to 13EB per month in 2021) and is expected to more than double in the next 3 years. With the projected traffic increase, service providers would benefit significantly from the efficiency gains provided by 5G.

The state of 5G

The Indian Department of Telecommunications (DoT) plans to auction 5G spectrum in June–July 2022. Even as the government continues to work on the process of auctioning 5G spectrum, India's leading service providers are testing 5G at multiple locations, focusing on use cases for both urban and rural consumers. These include FWA for rural broadband, mobile cloud gaming, cloud-connected robotics, and remote healthcare.

5G outlook

5G is projected to account for almost 40 percent of mobile subscriptions – 500 million – by the end of 2027. By then, smartphone users in the region are forecast to consume 50GB of data per month on average. Even though 5G has not been launched commercially, there is already a good foundation for 5G uptake in India. There is significant consumer interest in adopting 5G – as an Ericsson ConsumerLab study indicated, 40 million smartphone users could take up 5G in its first year of availability.

Additionally, 21 percent of respondents that are smartphone users indicated that they already have a 5G-ready device. Indian consumers also claim to be willing to pay 50 percent more for 5G bundled plans. This presents a unique opportunity to grow revenue within a market that has historically had very low ARPU.²

Looking into the future

According to an Ericsson-Arthur D Little study, 5G will enable Indian mobile service providers to generate USD 17 billion in incremental revenue from enterprises by 2030. Much of this is projected to be driven by the adoption of 5G in the manufacturing, energy and utilities, ICT and retail industries. Indian enterprises consider 5G to be the most important technology for their digital strategies.³

5G will also enable service providers to launch new services for consumers, including home broadband (5G FWA), enhanced video, multiplayer mobile gaming, and AR/VR services. Consumers anticipate that service providers will offer pricing plans with service bundling and data sharing.

5G can play an important role in achieving India’s digital inclusion goals, especially in bringing broadband to rural and remote homes. Trials have proven the potential offered by 5G to bridge the digital divide by enabling access to high-speed broadband through FWA.

Bhutan

The Himalayan country of Bhutan was one of the first in South Asia to launch 5G. While currently only available in three cities, Bhutanese service providers plan to expand 5G coverage throughout the country.

5G deployment is expected to aid the Bhutanese Government’s efforts to bridge the digital divide. Service providers look forward to exploring new services and use cases, including AR, VR, automation and IoT. 5G FWA is seen as key to bringing broadband to people in remote and rural regions where fiber is less practical.

Nepal

Mobile services dominate the telecoms landscape in Nepal. 4G coverage has expanded in the past 5 years, now accounting for around 35 percent of the 41 million mobile subscriptions. Including 3G, mobile broadband connections account for over two-thirds of subscriptions in Nepal.⁴ The government is encouraging service providers to expand 4G coverage and focus on improving network quality and customer experience.

Nepalese service providers are expected to begin 5G trials in 2022.⁵

¹ Ericsson Mobility Visualizer, Mobile subscriptions.

² Ericsson ConsumerLab, 5 ways for a better 5G (May 2021).

³ Ericsson and OMDIA, Survey of Indian Enterprises (March 2022).

⁴ Nepal Telecommunications Authority, MIS Report (2022).

⁵ The Kathmandu Post, "Nepal Telecom to begin first 5G trials from June" (January 27, 2022).