India's 5G Spectrum Auction: Significant impact for enterprises

Today marks the start of India's much awaited 5G spectrum auction, in which the top three private telecom companies in the nation — Reliance Jio, Bharti Airtel, Vodafone Idea, and newcomer Adani Data Networks—will vie for 72GHz airwaves valued at Rs 4.3 lakh crores with a validity for 20 years. The government has already reserved 5G spectrum for incumbent operators BSNL and MTNL.

The 5G enterprise market is expected to grow by USD 71.45 billion from 2021 to 2026 at a CAGR of 31.55%

With the advent of 5G wireless technology, telecom service providers are prioritising the enterprise market over the consumer mobility space because they believe that the enterprise industry would present new revenue prospects for them. Adani Data Networks has already stated that it plans to use the purchased spectrum to build a private network to support its companies, which include data centres, airports, and the power industry. Senior technology executives from Bharti Airtel, Reliance Jio, and Vodafone Idea have all explicitly said in previous conversations with CIO&Leader that 5G represents a greater opportunity for businesses rather than the end user. (See: Enterprise 5G: Fuelling New Possibilities | itnext.in)

According to a report by Technavio, the 5G enterprise market is expected to grow by USD 71.45 billion from 2021 to 2026 at a CAGR of 31.55%. Enterprises can take use of 5G capabilities to address specific use cases that call for more bandwidth or add more capacity to their apps.

Cornerstone of digital transformation

One of the most significant advantages that 5G offers is an extremely low latency rate, the transmission time between sending and receiving information. For mainstream adoption of autonomous cars, remote delivery of critical healthcare, and all-inclusive adoption of the Internet of Things (IoT), the industry needs exceptional quality bandwidth and low latency.

Theoretically 100 times faster than 4G LTE, 5G has the potential to be the cornerstone of enterprise digital transformation with a speed that potentially exceed 10Gbps. This speed can enable seamless live broadcasting, use cases for augmented reality and virtual reality for work, school, shopping and gaming and Industrial 4.0 applications. In the post-pandemic scenario, as businesses continue to acclimatize to the new ways of working, 5G holds immense potential to enable remote workers to improve performance by connecting and collaborating with their stakeholders in real-time.

In addition, by giving businesses the much-needed speed, power, and capacity to transmit trustworthy and real-time information, 5G will propel a new wave of cutting-edge technologies, from augmented reality to artificial intelligence-based data-driven apps. The industrial sector is being touted as the biggest beneficiary of the fifth generation of wireless communications rollouts. Most manufacturing industries are now gearing toward smart factories and automating processes for better production and meeting dynamic demand-supply scenarios. Currently, manufacturers depend upon fixed-line networks to meet such requirements.

Key challenges

One of the major challenges of the wider adoption of 5G technology is the high acquisition cost. According to Technavio, the high installation cost of small cellular networks and limited security for remotely situated outdoor power systems are among the major concerns that are expected to hamper the growth of the global 5G enterprise market.

“Large organizations in the telecommunications industry are compelled to adhere to stringent regulations laid by telecommunication standard organizations. Persistent pressure for competitive pricing by customers has affected the profit margins of telecom companies,” the report states.

The telecom industry association, GSMA, anticipates that by 2025, 5G networks are likely to cover one-third of the world’s population.