By Nishant Arora New Delhi, Aug 17 : As the Indian telecom operators are planning to launch 5G services in September-October on a pilot basis in specific circles millions of Indian users with smartphones with 5G capabilities are worried that they need to shell out more money to get super-fast speeds and better connectivity.
Similar to 4G and 3G the telcos will soon unveil specific 5G tariff plans.
according to industry experts, consumers will pay more for 5G services available on their devices.
Reliance Jio, Airtel and Vodafone Idea are currently tight-lipped in their internal discussions about whether to go for an extensive or a moderate price increase for their customers and with discussions of offering lucrative data bundles with manufacturers of smartphones when the 5G rollout takes a better form, as per sources.
However, the pricing plans will decrease as usage rises and more people adopt 5G networks, especially in Metros which is where the first demand is expected to come.
“I believe the 5G tariff battle will be around, but not as in the same way as we witnessed in 2016.
Operators have often mentioned possible price adjustments for data to boost the average revenue per user (ARPU),” Tarun Pathak, Research Director of Counterpoint Research, told IANS.
A war on tariffs immediately with the introduction of 5G is not likely however, 5G “will be competitive because India remains a market that is price-conscious,” he mentioned.
A recent report from Nomura Global Markets Research found the telecom service providers could have two options: either a small incremental rate of 4 percent increase on their total subscribers or a 30- percent increase over 1.5 GB per day 4G plans.
“Historically, Indian telecom companies have not charged an extra fee for plans with 4G (vs 2G/3G plans).With the possibility of a faster speed available and a likely initial interest from customers who are premium (smartphones that exceed 15,000 rupees) There is a possibility for telecom firms to charge a premium price for 5G (vs 4G), in our view,” Nomura said in its report.
“5G tariff plans” will be a crucial to monitor in the near future and 5G’s premium (vs 4G) could be the next phase of ARPU (average revenue per unit) increase for telecom providers,” it added.
Another report from Goldman Sachs Equity Research mentioned that 5G rollouts haven’t led in any “meaningful increase in the cost of capital expenditure for telecom companies across the globe and it predicts the same pattern in India”.
But, Prabhu Ram, Head-Industry Intelligence Group (IIG), CMR, believes that with the imminent launch of 5G-based services in the near future, “telecom operators will potentially try to go after the market in their pricing plans for 5G to ensure early consumer acceptance and thus gain their position as the leader in 5G”.
“As 5G applications develop further, telecom providers will be looking to post additional market share increases in 2023, due to any market churn that could occur,” Ram told IANS.
The transition to 4G from 3G and 2G in the United States was slow and was boosted only after the attractive data offers provided by Reliance Jio, which is also anticipated in the 5G age with the right combination of bundle offers with the smartphone manufacturers.
“We have been working with different telecom operators for more than two years, and have extensively tested all of our products for usability.With a deep knowledge of SA & NSA network bands We have launched devices that work with certain of the most sought-after bands.” Muralikrishnan B, the president of Xiaomi India, told IANS.
“This gives us assurance that we’ll be able to assist, and guide the deployment of 5G technology for millions of our customers,” he added.
The number of installed base of phones with 5G capability has reached 5 million in the country.
“The achievement of 5G is dependent on its higher-priced pricing over 4G.However the reduction of price disparities is crucial to a quicker shift across categories A and B.Expected 4G tariff hike in this fiscal and 5G’s premium service in the coming year will raise ARPU to Rs 185 to Rs 190-190, however it will be less than the ARPU of Rs 203 recorded in the fourth quarter (Q4) of FY21-22 for private players in metro circles alone.” CRISIL Ratings in its report.CRISIL Ratings in its report.
Airtel’s CTO Randeep Sekhon said recently in reports that there’s no global evidence of any major distinction between 4G and 5G tariffs.
“We anticipate 5G plans in India to be similar to 4G plans,” he had said.
(Nishant Arora may be reached via [email protected])
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