New Delhi, Jan 30 (SocialNews.XYZ) India currently has around 35 per cent of its towers fiberised for 5G and the backhaul infrastructure will cost a whopping Rs 3 lakh crore over the next 4-5 years, rating agency ICRA said on Monday.
The full-scale 5G deployment across the country will entail densification of the network and, thereby, sizable investments in fiberisation.
However, the debt levels for the industry continue to remain high and the same further increased post the conclusion of the last round of auctions.
The industry is expected to close the year with a debt of around Rs 6.3 lakh crore (as on March 31, 2023).
"While the rollouts have started and customers are being upgraded to the 5G network, the same is being done at no additional costs as 5G-specific plans have not been launched yet. Moreover, 5G deployment will entail densification of network and close placement of radio antennas, with possible collocation on street furniture," said Ankit Jain, VP and Sector Head, Corporate Ratings, ICRA.
While small cells are likely to be the first option to start with, these need to be connected with fibre for efficient network coverage and delivery.
"As several use cases are under development, it will take some time for 5G to reach an adequate level of penetration. To begin with, it will be more focused towards enterprise-based use cases. Thus, unlike 4G, ICRA expects the 5G rollout to be more phased out and pockets specific," Jain elaborated.
The telecom industry has continued to report healthy improvement in its operating metrics as reflected by improvement in ARPU (average revenue per user) levels and consistent growth in telephony usage.
ARPU has already crossed Rs 170 mark in H1 and is likely to touch Rs 180 by the end of the fiscal, followed by improvement to close to Rs 200 by FY2024.
This has translated into healthy growth in industry AGR over the last few quarters.
"The telecom operators implemented a round of tariff hikes in Q3 of FY2022, which coupled with consistent upgradation of subscribers to 4G from 2G and increase in usage of telephony services have resulted in improvement in industry ARPU (excluding BSNL)," said Jain.
Amid all this improvement, the industry's debt levels are likely to remain unwieldy, exerting pressure on the debt coverage metrics, said the rating agency.
Currently, telcos like Reliance Jio and Airtel are fast rolling out 5G services across the country.
Source: IANS
About Gopi
Gopi Adusumilli is a Programmer. He is the editor of SocialNews.XYZ and President of AGK Fire Inc.
He enjoys designing websites, developing mobile applications and publishing news articles on current events from various authenticated news sources.
When it comes to writing he likes to write about current world politics and Indian Movies. His future plans include developing SocialNews.XYZ into a News website that has no bias or judgment towards any.
He can be reached at gopi@socialnews.xyz