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Rating agency ICRA in its latest report has said that 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. It said the full-scale 5G deployment across the country will entail densification of the network and, thereby, sizable investments in fiberisation. However, it said the debt levels for the industry continue to remain high and the same further increased post the conclusion of the last round of auctions.

According to the report, the industry is expected to close the year with a debt of around Rs 6.3 lakh crore (as on March 31, 2023). It said 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, it said 5G deployment will entail densification of network and close placement of radio antennas, with possible collocation on street furniture. 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.

The report further stated that 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, it expects the 5G rollout to be more phased out and pockets specific. 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.