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Ericsson’s advice for Airtel, Reliance Jio on how to monetise 5G

Indian telecom companies have invested significantly in spectrum and infrastructure for the rollout of 5G services. However, they are now facing challenges in monetizing the 5G connectivity due to a lack of use cases. Reliance Jio and Bharti Airtel, the top players in the Indian telecom market, have been actively launching 5G services across the country. To address this issue, Ericsson, a Swedish telecom equipment maker, has recommended that operators evolve from being just connectivity providers to taking up the role of service creators.

According to Ng Thiaw Seng, head of strategic network evolution of market area South East Asia, Ocean & India at Ericsson, telecom providers need to drive partnerships and focus on end-to-end device and system integration to monetize 5G effectively. Seng emphasized that fixed wireless access (FWA) is a promising use case in India, considering the low home broadband penetration rate of less than 10%. This presents an opportunity for growth, especially in segments like medical healthcare, beyond enhanced mobile broadband (eMBB) and FWA.

Seng highlighted that in India, only 10% of the population has access to home broadband, leaving a significant untapped market potential of 90%. This includes various segments ranging from high-end to low-end. While global operators are launching FWA in both high-end and low-end segments, the cost of customer premise equipment (CPE) remains a challenge, priced around $150-$180.

In the near term, there is a positive business case for targeting high-end and medium-end segments by subsidizing CPE costs. However, reaching rural areas with lower average revenue per user (ARPU) of $2 or $3 may take more time. The opportunity lies in gradually expanding ARPU for fixed wireless, which can be comparable to fixed broadband, addressing the limited fiber penetration in the market. Over time, the market can reach the massive number of households that require home broadband, presenting a significant opportunity for telecom companies.

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