Indian telcos will use fifth generation (5G) technology primarily for fixed wireless broadband service in the country, as compared to industrial use case, which is being developed in European countries, said Arun Bansal, senior vice president and head of network products at Ericsson. In an interview with ET’s Danish Khan, Bansal said that Indian telcos will need to continuously make investments in LTE to make networks ready for 5G whenever it is ready. Edited excerpts:
What is the next battle front for telcos in India? Quality or price?
India has gone from frequency spectrum-starvation to spectrum abundance. There is no reason for India not to be in the forefront of mobility, speed and quality of service.
We have seen that operators that are investing in performance earning more revenue than their peers in the market. Such operators have better quality of subscribers and the churn is less. So, the myth that network performance doesn’t pay off has gone out, especially in mobile data. Now quality of service is becoming a big differentiator for operators.
Do you think India is lagging behind in terms of 4G deployment?
There’s a big misconception. Only 40% of the world population have data connection and India is around 15%. It’s not as if India is lagging significantly behind in internet coverage. If you take out the US, Japan, Korea and China, then the average will be less because China distorts the number. There’s significant part of the world that is still to be covered by the LTE.
We and our other competitors are investing to prepare the LTE network for a smoother 5G migration. 5G will not be an overlay network, and it will have to work with 4G.
So, for operators to be relevant in 5G, they would need to invest and have a very good quality 4G. India telcos need to make the LTE networks ready for 5G whenever it comes.
Can you predict initial use cases of 5G in India?
In India, 5G can be used to offer fixed wireless broadband service since people don’t have access to fibre connection. However, even without 5G in India with 1GB/sec and LAA where operators can use licensed and unlicensed combined, fixed wireless use case could be used in areas where there is no fibre.
On the 5G devices front, CPE (customer premises equipment) will appear first, followed by tablets and the terminals.
Do you see deployment of Internet of Things (IoT) picking up in India?
There is a lot of discussion about IoT in the world but I am a bit surprised that there is not much activity on this front in India. Narrow band IoT will gain significant momentum in 2017. That means for operators in India who want to do anything with Internet of Things or Digital India, they will have to launch narrow band IoT in 2017.
What are the new innovations the company is doing within your business unit?
There are three areas of investment. Number one is 5G, followed by 4G capacity coverage solutions and then the microwave. Maybe a little bit too early for India but down the line, there will be a virtualized RAN, of course. Like what happened in the core network – we will have virtualised RAN.
Why is the global telecom gear market seeing a downturn?
If you look at the combination, developed market operators who have done 4G and they are into transition, waiting for 5G. So, 5G will take off in 2020. Then there will be macroeconomics. Many developing markets like Russia, Brazil, Egypt are impacted either by the world prices or the currency challenges. And we believe that these challenges will continue for a period of 12-18 months. Hence we will see -2 to -6% capex from operators in the next 12-18 months.
What about India?
There is still a lot of LTE coverage that has to happen in India. And the rupee is relatively stable. Operator revenues are relatively stable. So, I think India will not follow the global trend. India will be one of the exceptions globally.
Any update on Pune manufacturing unit in India?
We have started production in our Pune factory and the first shipment should be out in the fourth quarter. We will make deliveries to at least two operators out of that factory in the quarter. 4G radio and microwave products are being made out there.
What is the next battle front for telcos in India? Quality or price?
India has gone from frequency spectrum-starvation to spectrum abundance. There is no reason for India not to be in the forefront of mobility, speed and quality of service.
We have seen that operators that are investing in performance earning more revenue than their peers in the market. Such operators have better quality of subscribers and the churn is less. So, the myth that network performance doesn’t pay off has gone out, especially in mobile data. Now quality of service is becoming a big differentiator for operators.
Do you think India is lagging behind in terms of 4G deployment?
There’s a big misconception. Only 40% of the world population have data connection and India is around 15%. It’s not as if India is lagging significantly behind in internet coverage. If you take out the US, Japan, Korea and China, then the average will be less because China distorts the number. There’s significant part of the world that is still to be covered by the LTE.
We and our other competitors are investing to prepare the LTE network for a smoother 5G migration. 5G will not be an overlay network, and it will have to work with 4G.
So, for operators to be relevant in 5G, they would need to invest and have a very good quality 4G. India telcos need to make the LTE networks ready for 5G whenever it comes.
Can you predict initial use cases of 5G in India?
In India, 5G can be used to offer fixed wireless broadband service since people don’t have access to fibre connection. However, even without 5G in India with 1GB/sec and LAA where operators can use licensed and unlicensed combined, fixed wireless use case could be used in areas where there is no fibre.
On the 5G devices front, CPE (customer premises equipment) will appear first, followed by tablets and the terminals.
Do you see deployment of Internet of Things (IoT) picking up in India?
There is a lot of discussion about IoT in the world but I am a bit surprised that there is not much activity on this front in India. Narrow band IoT will gain significant momentum in 2017. That means for operators in India who want to do anything with Internet of Things or Digital India, they will have to launch narrow band IoT in 2017.
What are the new innovations the company is doing within your business unit?
There are three areas of investment. Number one is 5G, followed by 4G capacity coverage solutions and then the microwave. Maybe a little bit too early for India but down the line, there will be a virtualized RAN, of course. Like what happened in the core network – we will have virtualised RAN.
Why is the global telecom gear market seeing a downturn?
If you look at the combination, developed market operators who have done 4G and they are into transition, waiting for 5G. So, 5G will take off in 2020. Then there will be macroeconomics. Many developing markets like Russia, Brazil, Egypt are impacted either by the world prices or the currency challenges. And we believe that these challenges will continue for a period of 12-18 months. Hence we will see -2 to -6% capex from operators in the next 12-18 months.
What about India?
There is still a lot of LTE coverage that has to happen in India. And the rupee is relatively stable. Operator revenues are relatively stable. So, I think India will not follow the global trend. India will be one of the exceptions globally.
Any update on Pune manufacturing unit in India?
We have started production in our Pune factory and the first shipment should be out in the fourth quarter. We will make deliveries to at least two operators out of that factory in the quarter. 4G radio and microwave products are being made out there.
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