Why Bill for India's 5G Infrastructure is Looking Steep for Telecoms Companies

9 October 2019

The hefty price tag attached to 5G is raising a few eyebrows in India. Analysts question whether debt-laden telecom operators in Asia’s third-biggest economy will be able to foot the bill. Despite the government’s push to shift the nation on to the next generation of communications systems, which would help boost the sluggish Indian economy, financial constraints faced by companies could delay the launch of 5G.

“The telcos with huge debts, declining average revenue per user and an abysmal return on capital are not in a position to make huge investments in [the new] spectrum, license fees, infrastructure and equipment,” says Rajan Mathews, the director general of the Cellular Operators Association of India, a telecom industry body in New Delhi.

Sanjay Bakaya, India and South Asia vice president for US telecom software company Mavenir, describes the spectrum auction as “the main driving factor” for 5G development in India.