5G Revenue Insignificant for Late Adopters Including India: Moody's

On Thursday, Moody's Investors Service said in a report that countries in the Asia-Pacific region, including India, that are late in adopting 5G will get insignificant revenue from the services.

Late Adopters Too Late for 5G Revenue Growths

The report also said that governments in these markets will have to play a significant role during the rollout. Countries like China, Hong Kong and Malaysia, who are amongst the early adopters. In these countries, governments played a pivotal role during the rollout. The report said, "the four pioneer markets, which include (South) Korea and China, will maintain their lead in the adoption of 5G services". Further, it added, "among the four early adopter markets, Hong Kong SAR, China was the first to roll out 5G services, and its adoption rate will be the highest".

However, the report said that late adopter markets such as India, Bangladesh and Indonesia will not receive any significant revenues from the next gen network. Indian telcos have repeatedly said that they are ready for deployment. They have said that they are waiting for the government to allocate airwaves at a lower price.

It said the late adopters will continue to focus mainly on increasing capacity for 4G networks. It added that late adopters will invest in 5G infrastructure for spectrum payments and to keep pace with competition. On the other hand, Moody's said telcos in South Korea and China have succeeded in increasing ARPU.

Spectrum Auction Will Play a Key Role

Moody's also said that The agency's report also said late adopter markets could benefit from concrete timelines for 5G spectrum auctions and government support. It added that the primary cause for these late adopter markets to be late is the pandemic. The pandemic has delayed rollout, and has disrupted 4G as well.

The telcos in these regions are prioritizing maintaining connectivity. It added, "however, pending spectrum allocation and operators in India are conducting advanced trials on 5G to improve their readiness to launch".

This pertains to the ongoing 5G trials in India. Under the trials, the government has allocated trial spectrum to Reliance Jio, Bharti Airtel, Vodafone Idea and MTNL. Moody's said that for Bangladesh and India, lower spectrum price will drive 5G rollout.

However, the spectrum is "prohibitively expensive" in these two countries, the report said. The report also expressed a low likelihood of any government subsidies for spectrum, blaming fiscal deficits.