The government’s push on fiberisation and technology will spur connectivity, while the design-led scheme announced in the Budget for the 5G ecosystem will bolster India’s position as a manufacturing hub, the telecom industry said on Tuesday.
Budget announcements including those around 5G spectrum auction and 100 per cent fiberisation with PPP model would provide the required impetus to accelerate ubiquitous and reliable internet connectivity, Nitin Bansal, managing director, India and Head-Networks – Southeast Asia, Oceania and India at Ericsson, said. HFCL Ltd managing director Mahendra Nahata said the expected spectrum rollout for 5G in 2022, combined with the scheme for design-led manufacturing for 5G equipment under the PLI scheme will not only lead to sectoral advancements but also spur job opportunities.
“We are delighted to hear that contracts for laying optical fibre in villages will be awarded under BharatNet project under PPP model in 2022-23. This will help the telecom industry in providing affordable broadband and mobile communication in rural and remote areas,” Nahata observed. Prashant Singhal, emerging markets leader (technology, media, telecom) of EY, said allocating five per cent of the annual USOF (Universal Service Obligation Fund) collection will significantly bolster rural connectivity.
“Strengthening of the BharatNet infrastructure through PPP (public-private partnership) model will enhance the connectivity backbone of an increasingly digital nation. Globally, 200 telcos in 78 countries have already launched commercial 5G services,” he said. According to Singhal, a clear focus on 5G spectrum auctions and roll-out will help India to catch up with the rest of the world. The Budget announcement has given a much-needed push for 5G, Singhal said adding that the government’s move to launch a design-led manufacturing scheme will help to position India as a hub for 5G equipment manufacturing and exports.
Sterlite Technologies Ltd (STL) Managing Director Ankit Agarwal said the Budget will accelerate India’s digital ambitions. “It sets the foundation for India’s 5G readiness through spectrum auctions, R&D impetus, USOF allocation along with a boost for domestic manufacturing through a timely ‘design-led manufacturing’ scheme,” Agarwal said. Deloitte India Partner and Leader (Telecom Sector) Peeyush Vaish the production-linked incentives (PLI) scheme extension to 5G rollout and the commitment on fibre in all villages by 2025 will give an additional thrust to investment in new technologies in the telecom sector.
Telecom Sector Skill Council CEO Arvind Bali said the announcement of spectrum auction in 2022 for 5G rollout and the scheme for design-led manufacturing is likely to “uplift” human resource requirements significantly as also the need to train the existing and new workforce. “Rural OFC (optical fibre cable) in villages through BharatNet is also a great opportunity for skilling the rural youth,” Bali pointed out.
K G Purushothaman, partner and telecom sector leader at KPMG in India, said that while some of the industry demands on reducing levies remain to be addressed, the government’s commitment towards the launch of 5G by FY23, new PLI schemes to promote manufacturing of 5G equipment and strengthening of digital infrastructure will boost momentum in the sector. CRISIL Ratings Director Nitesh Jain said the inclusion of data centres under the infrastructure category and the PLI scheme for 5G equipment will further support investments in digital infrastructure.
The agency added that it expects telcos to shell out about Rs 1 lakh crore in the upcoming 5G spectrum auction, assuming each of the top two telcos bid for the entire 100 MHz spectrum in each circle in the ‘metro’ and ‘category A’ circles at the reserve price recommended by the telecom regulator for the 3,300-3,600 MHz band, identified for 5G. Given the 25 per cent upfront payment mandate for 5G spectrum purchase as seen in the previous auctions, upfront payment would be about Rs 25,000 crore next fiscal, it said.
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