Explained: What Is 5G And Why It Is Important For India's Economy

All you need to know about 5G or fifth generation of cellular networks and how Rel Jio, Airtel and Vodafone Idea are placed to take advantage of the new technology

While many countries have deployed 5G technology, India is still far away from building the network with the bidding for telecom spectrum delayed indefinitely. However, last week's announcement by Reliance Jio that it has developed and designed a complete indigenous solution for 5G and that it is ready for field deployments in 2021 has put India's 5G dreams back on track.

Reportedly, India wasn't confident of rolling out 5G auctions, given the financial woes faced by the two incumbent players -- Bharti Airtel and Vodafone Idea, and lack of clarity on two Chinese vendors Huawei and ZTE. More importantly, when the country's prime focus has been on fighting a deadly virus, 5G is not a priority for now.

The telecom companies are already facing a major payment crisis with the recent ruling by the Supreme Court of India in a longstanding case over their delayed payment of past spectrum fees.

The fact is that all three operators have said the base price set for 5G by the telecom regulator, Rs 492 crore ($65 mn) per megahertz (MHz), was too high. All, but Reliance Jio, had asked the government to postpone the auctions too.

Bharti Airtel chief executive officer Gopal Vittal said 5G requires large blocks of spectrum and it would cost Rs 49,000-50,000 crore ($6.6 bn) for 100 MHz of spectrum, adding that his company may not bid for it.

According to CLSA, a brokerage and investment group, the base price per MHz for spectrum in the 3400-3800 MHz band is high ($65 mn, in today's exchange rate) as compared to $26 mn in Italy, $18 mn in South Korea and $10 mn in the UK.

In 2019, Germany and Italy raised $7.4 bn and $7.6 bn respectively from 5G spectrum auctions.

India hopes to garner $70 bn from the sale, which is an important tool to raise finance for exchequer that is currently facing an acute deficit. India's plan was to auction a total of 8300 MHz of spectrum beginning January 2020 for 22 telecom circles across the country for a reserved price of Rs 5.23 trillion ($69.7 bn).

Another important issue is that both Airtel and Vodafone Idea were looking to tie up with Huawei and ZTE, which now faces uncertainty after the bilateral relationship between India and China took a beating. The two players may be forced to go with a relatively expensive option of Ericsson and Nokia, and compete with Reliance Jio who will have a huge advantage with its own technology in its backyard.

Why you need 5G?

5G, or the fifth generation of cellular networks, is set to be the future of wireless networking. It heralds a new era in communications. It will increase the bandwidth and download speeds exponentially while significantly reducing the latency (time delay between an action and response). In a 5G network, latency could be less than a millisecond, 100 times better than 4G.

Self- driving cars and Internet of Things (IoT) -- network of connected devices that allows collection and exchange of data, for example, smart homes -- are closer to being a reality thanks to the development of 5G.

What makes 5G different?

4G Long Term Evolution (4G LTE), the existing standard for cellular networks, brilliant in its own right, had limitations far too great to overcome. Since LTE cells are small, significantly more towers had to be installed to cope with the increasing traffic and devices. Such an undertaking is rendered simply impossible for any mobile network operator to handle without charging exorbitant rates from their customers. So an alternative had to be found before they ran out of existing spectrum or the traffic became too large to handle. Thankfully, the development of 5G was a huge sigh of relief for all the telecommunication giants.

5G primarily exists in three spectrums: low-band (<1 giga hertz or GHz), mid-band (1 GHz – 6 GHz) and high-band (24 GHz – 28 GHz). Low-band are in effectively the same area of spectrum as the existing LTE and can offer slightly higher speeds than LTE and cover a reasonable amount of area as well. The mid-band spectrum is literally the middle of the road in almost all aspects. While it offers significantly greater speeds than LTE, the coverage area is more limited. But the term 5G is actually meant to refer to the high-band millimetre waves which offer extremely fast speeds, though it has poor coverage.

The millimetre waves (mmWave) unfortunately have poor penetrating power, meaning they can't travel well through walls and other objects, and tend to get absorbed by plants and rain. This particular problem can be solved using small cells, massive MIMO and beamforming. Small cells serve as low-power base stations and as a relay point for 5G networks to significantly improve the coverage area. This is useful in cities with higher density as phones can switch between base stations as they encounter obstacles. Massive MIMO (multiple input multiple output) is implemented to improve network capacities without requiring more spectrum. Massive MIMO base stations can have more than a hundred antennas and significantly increase data rates and link reliability. But having groups of antenna listening and broadcasting to the same frequency bands will cause interference, and this is why 5G is also looking to use beamforming.

Beamforming will allow the antenna to aim at a specific device and send a focused stream of data instead of broadcasting the signal in all directions. This is coupled with the face that higher frequency waves can carry more data means that 5G is reaching speeds of around 2 Gbps.

The wide use of 5G

5G has the potential to one day compete with existing ISPs (Internet Service Providers) such as cable internet to be used for laptops and desktops, and not only serve cell phones. 5G will offer higher download speeds and lower latency. This will be huge for time critical technologies like self-driving cars that require rapid communication between vehicles in the network. As they say, the sky is the limit for 5G, given the possibility of conducting remote surgeries and implementing smart cities.

In essence, 5G will alter our daily lives dramatically, from how we travel, work, seek services, shop, communicate and get entertained. It can easily connect machines, objects and devices, and we can make them do mission-critical services sitting far away in remote locations.

Take for instance, remote diagnosis and treatment of critical illness and use of medical devices that require extreme precision, especially in the COVID-19 era. 5G can also remotely control the critical infrastructure and machinery, and manage home entertainment such as streaming a live virtual reality soccer game.

Most of these are not possible with the latency of the 4G LTE.

Concerns galore

The primary concern is of course the tariff. Since implementing 5G is an expensive endeavour, it might take a while for the rates to normalise. For instance, telecom players in Germany and Italy who participated in the spectrum auction said their rollout was delayed considerably because of the high cost.

There also remains the problem of implementing the high band spectrum, given its coverage constraints. The millimetre waves were meant to be the only "true 5G" solution but the deployment of 5G in the US has conclusively demonstrated that these small cells are not going to be deployed as widely as was initially hoped. mmWave could very well be confined to huge public gatherings, stadiums, concerts or dense urban environments that consistently see huge numbers. An even more relevant issue is upgrading your cell phone to support 5G, but that shouldn't be an immediate concern as the 5G spectrum sale is delayed. Some of the new cellphones in the market are 5G-compliant.

Also Read: Does 5G Radiation Cause COVID-19 And Other Diseases? A Fact Check

Impact on economic growth

When 5G's full economic benefit is realised across the globe, a broad range of industries - from retail to education, transportation to entertainment, and everything in between - could produce trillions worth of goods and services enabled by 5G mobile technology.

As per a study by IHS Markit, 5G technology will have an impact on global GDP (between 2020 and 2035) that is roughly equivalent to adding an economy the size of India to the present global economy. The value chain associated with 5G technology will amount to $3.5 trillion (in today's dollars) of output and it will create 22 million new jobs. It further said the technology would help flourish several economic sectors by simply providing 5G-enabled services.

More importantly, the 5G-enabled services could also create huge employment opportunities in India and other countries.

Updated On: 2020-07-28T12:45:25+05:30
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