5G networks are going to be the next revolution in the tech and telecommunications industry in India and around the world. Although 5G technology has not yet fully matured and is still in the phase where use cases relevant to India are discovered / developed, there is no doubt that it will change the way people and businesses. machines communicate. But 5G requires a lot more backend support than 4G. The infrastructure needs to be very solid and telecom operators will need to invest much more in installing new towers for even mmWave 5G to be successful. For all of this to happen, the industry needs the support of strong tariffs.
Imminent tariff increase for the industry
While 5G is still nearly a year away in India, tariff hikes are imminent. The price increases will be a massive game-changer for operators. All operators have already started to passively increase tariffs. But it won’t be long before they get aggressive with it.
The country’s telecommunications operators suffer from low average income per user (ARPU). A weak ARPU limits their ability to invest more in research and development (R&D) to develop new technologies and services. Moreover, without a tariff increase, operators cannot even have enough profit in the bank to comfortably pay legal fees and invest in their networks at the same time.
In a market as price sensitive as India, the concept of premium services is just a hoax. Operators can’t really go out of their way to offer premium services for such low prices. If they do, they will be draining their profits at an alarming rate.
The back-up plan has already come from the government. Now, the only thing the industry needs are price increases. The pricing floor is not important, but price increases of even 20% will put operators in a much better position and allow them to improve services while investing in 5G technology.