India’s 5G network rollout cost will be the highest among 15 emerging nations between 2020 and 2035, says a study by Analysys Mason and Ericsson. On the other hand, India could also realize the highest GDP-related benefit, although that will largely depend on government policies that facilitate the rollouts.
The study [PDF] – which covers Bangladesh, Brazil, Chile, Colombia, Egypt, India, Indonesia, Malaysia, Mexico, Morocco, Nigeria, Pakistan, South Africa, Thailand and Turkey – estimates that while the aggregated cost of 5G rollouts will be between $3-8 billion in most benchmark countries, it will be as high as $75 billion in India.
The report adds that most deployment costs will be incurred by 2028–29, by which point 5G should be fully rolled out across the existing network grid in most countries.
‘Significant GDP benefits’ from 5G
“With regulatory and government support, all 15 countries could benefit from GDP growth between 0.3% and 0.46% through 2035, with an estimated three-to-seven-fold cost-to-benefit ratio,” the report says.
The study also found that extending 5G coverage beyond the baseline can generate significant GDP benefits from industrial adoption, especially from mid-band coverage extension.
Building new low-band macro sites beyond the baseline footprint to achieve coverage alongside all rail, road and agriculture areas, would result in an additional ~3–12% investment needed per market.
“The agriculture sector is the largest contributing sector to GDP across all countries considered, driving the magnitude of the economic benefits achieved,” the study says. “Most countries are expected to generate economic benefits that are three to ten times higher than the incremental cost of extending low-band coverage.”
Potential economic gains for India
For India specifically, at a cost of approximately $900 million to extend low-band coverage, 5G services are expected to deliver economic benefits totalling $15.6 billion between 2020- and 2035 with the ‘smart rural’ segment having the highest share ($9.4 billion), followed by smart industry ($5.4 billion), smart logistics ($0.9 billion), and smart public services ($0.1 billion).
In contrast, extending mid-band 5G coverage in India at a cost of $6.4 billion can help reap economic benefits to the tune of $44.8 billion in the same period. Result: “India will benefit the most from an economic perspective among the comparable emerging nations,” the report says.
The study also claims that the social benefits enabled by 5G will be greatest from 5G-based FWA, smart factories, freight and logistics, agriculture and healthcare use cases. Additionally, it said, adopting 5G can help reduce emissions by supporting digital transformation in agriculture, freight and logistics, smart factories and construction.
In India, Reliance Jio and Bharti Airtel launched their 5G services last month, and aim to achieve pan-Indian coverage by December 2023 and March 2024, respectively. Cash-strapped Vodafone Idea has yet to announce a concrete timeline for 5G.
Jio and Airtel are aggressively ramping up their 5G network rollouts with plans to add 9,000-10,000 5G sites per week in coming months.