MONETISING 5G

Is fixed wireless access the answer to the monetisation prayers of Reliance Jio and Airtel?

- SURAJEET DAS GUPTA

The two dominant telecom service providers in the country, Reliance Jio and Bharti Airtel, have refrained from increasing tariffs for more than 20 months. A tariff increase may have come in the way of adding more subscribers to their networks as well as nudging existing users to upgrade from 4G to 5G.

The non-increase has helped in increasing the number of 5G subscribers to 170 million. However, analysts say the time has come when the two telcos can no longer put off tariff increases. In fact, tariffs can go up any time now, which will shore up the key metric of Arpu, or average revenue per user per month.

Considering the combined investments of more than $30 billion ploughed by Jio and Airtel into 5G networks, the pressure of monetisation would be understandable.

At present, Arpus hover between ₹180 and 208. Telcos say a mere 15 per cent increase in the base tariffs will push up ARPUS by 20 per cent. If this increase comes along with a decision to start charging for 5G data - it is now free - Arpus could go up by 23 per cent.

The key is to find a compelling use-case for 5G data, something users will happily pay for. That will be a welcome push for Arpus, because increasing the base tariffs is usually an unpopular move with consumers and government alike.

That is where 5G-enabled fixed wireless access, or FWA, comes in. It has helped telcos around the world push up their revenues and Arpus.

Last mile benefit

Broadband is delivered to homes in various ways, one of which is fibre to the home (FTTH). FWA does the same thing, but replaces the last mile fibre connectivity with 5G airwaves. That makes it faster and easier to roll out by doing away with the digging and laying of fibre, which is cumbersome, expensive, and requires permission from local governments for "right of way".